METALS ACCOUNTING RISK
accuracies for metal recoveries as determined by statistical reconciliation of the raw data. If these reports display a variance which the company considers material to its results, the information must be reported to shareholders.
5. Provisional Data Reporting deadlines often require the use of
provisional data before reconciliation and error detection has been completed. Clear procedures and levels of authorisation for the replacement of provisional data by reconciled measurements in subsequent versions of the metal accounting report must be clearly indicated and traceable. In order to effectively manage this process, organisations need to rely on a system that outputs provisional
ensuring any changes to in-process inventories are both transparent and auditable.
7. Timeliness One of the most time-consuming and tedious
tasks dedicated to metallurgical engineers is the computation of production numbers. This process must be timely to ensure there are no gaps in financial records, to meet operational reporting needs (including the provision of information for other management information systems), and to facilitate
corrective where needed. action or investigation In order to meet these needs,
organisations must have an automatic system of reporting which delivers timely production information for financial reporting cycles.
8. Auditability The need for metal accounting to be conducted to the level of “financial accounting” standards with respect to auditability and transparency has been recognised for some time by the mining industry. Any accounts that do not have a record of exactly how numbers were achieved, who provided them, and how particular adjustments were arrived at will not satisfy auditors and lead to serious questions over corporate governance. Effective metal accounting solutions are those that not only transform process data into coherent accounting figures, but that do so in a fully auditable way.
production numbers in a consistent and auditable way, showing how and when these numbers become finalised.
6. In-Process Inventory In-process inventories can represent a significant amount of money. The calculation of
9. Transparency Improvements in metallurgical accounting
the dry
mass and content of in-process inventory held in stockpiles, bins, tanks, or other process vessels is subject to a high degree of uncertainty, mainly due to the difficulty in obtaining a representative bulk density and sample. It can also be difficult to make estimates of the volume of material that comply with the standard of accuracy needed for metallurgical accounting. Because of these challenges, external financial auditors place a great deal of emphasis on verifying inventories on a regular basis with physical stock-takes. Clear procedures for stock adjustments and ultimately unaccounted losses or gains are critical. A solution is needed that can reconcile differences in measurement results,
40 March 2013
are often motivated by the drive to improve transparency – defined as when the method of measurement, analysis and calculation of a quantity is fully documented. When transparency is lacking, plant managers are confronted with widely varying numbers derived by different calculation methods that lead to debate and confusion on the part of metallurgists, managers, and investors. Best practice in this area requires a centralised metal accounting solution that provides full transparency throughout the metallurgical accounting process and enables drilling down into each accounting figure to see exactly where the data came from, how calculations were made, and how conclusions were reached.
10. Documentation In order to ensure compliance with internal and external regulations, metal accounting systems
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