ICFR in Practice - Adapting Controls to Industry Risks
Why Tailoring ICFR to Industry Matters
While the COSO framework is industry-agnostic, financial reporting risks are not. Each sector has unique risks tied to the nature of its business, accounting standards, and regulatory exposure.
Effective ICFR means designing controls that are not just compliant, but also relevant to what matters most in your sector.
Sector-Wise ICFR Risk and Control Examples
Banking and Financial Services
|
Risk Area |
Common Risks |
ICFR Controls |
|
IFRS 9 Provisions |
Incorrect ECL model or overrides |
System-based ECL calculation + independent model validation |
|
Revenue Recognition |
Interest income manipulation |
GL tie-outs with core banking system and manual adjustment logs |
|
Capital Reporting |
Regulatory capital errors |
Regulatory returns review + automated validation rules |
UAE Note: Banks must align with CBUAE control expectations under Basel III and reporting circulars.
Real Estate & Construction
|
Risk Area |
Common Risks |
ICFR Controls |
|
Revenue Recognition |
Premature revenue booking on incomplete projects |
Milestone-based revenue recognition tied to certified progress |
|
Valuation |
Overstated fair value of investment properties |
Third-party valuations + CFO review & approval |
|
Retention & Advances |
Misclassification of liabilities |
Periodic reconciliations with contracts and site progress |
UAE Note: Developers must comply with IFRS 15 and maintain defensible controls for auditors and investors.
Retail and Consumer Goods
|
Risk Area |
Common Risks |
ICFR Controls |
|
Inventory Shrinkage |
Losses due to theft or process gaps |
System alerts + surprise stock counts + CCTV monitoring |
|
POS Revenue |
Misreported cash sales |
POS-to-GL reconciliation + sales cutoff controls |
|
Discounts & Returns |
Misuse of return policy |
Approval logs + ERP return tracking workflow |
UAE Note: Robust ICFR supports digital tax record requirements and audit preparation under Corporate Tax Law.
Manufacturing & Industrial
|
Risk Area |
Common Risks |
ICFR Controls |
|
Inventory Valuation |
WIP not properly accounted for |
Monthly WIP analysis + costing accuracy validation |
|
Fixed Assets |
Misclassification or ghost assets |
Physical verification + capitalization policy enforcement |
|
Procurement Fraud |
Fictitious vendor payments |
ERP DoA + three-way match with approved vendor list |
Tech & Software Companies
|
Risk Area |
Common Risks |
ICFR Controls |
|
Revenue Recognition |
SaaS/subscription recognition errors |
Automated revenue schedules tied to contract start/end |
|
Cost Capitalization |
Misclassification of R&D expenses |
Time-tracking and cost allocation review by Finance |
|
Access & Change Management |
Unauthorized system changes |
ITGC enforcement + audit log reviews |
UAE Considerations Across Sectors
- ICFR reporting for PJSCs must reflect sector-specific risks and controls
- Insurance and banks must align ICFR with CBUAE’s sectoral guidance
- Corporate tax compliance requires ICFR support for documentation, transfer pricing, and digital record-keeping
How Crowe Brings Industry-Specific ICFR Expertise
We tailor ICFR solutions to your sector by:
- Conducting industry-focused risk assessments
- Designing fit-for-purpose controls aligned with IFRS, SCA, and CBUAE
- Training teams on control walkthroughs and documentation standards
- Supporting year-end audits and ICFR opinion readiness
Thank You for Following Our 8-Week ICFR Series
From understanding ICFR foundations to designing, testing, and reporting controls, we hope this series helped demystify the journey toward robust financial reporting.
At Crowe, we are committed to helping UAE-based organizations build ICFR frameworks that align with global standards and local expectations, across industries, entity types, and regulatory environments.
Need support in designing, assessing, or certifying your ICFR program? Let’s connect.
Stay tuned for more on digital governance, forensic risk management, governance transformation, Business Process Mapping and end-to-end business process improvement.
Contact Us
