As part of the power and gas purchase agreement our client had with an international energy trading investment bank, they were required to provide independent assurance of the robustness of their business. The challenge was to review all industry related aspects of the business, identify risks and issues that could materially impact gross margin or gross margin reporting – and make recommendations for addressing these.
We are experts in customer billing, settlements, balancing, transportation and the multitude of green and social obligations costs. We are also experts in the associated industry processes, registration, forecasting, pricing and management reporting. In addition, in our Information Services practice, we have the capability to load, process and undertake rigorous analysis of large volumes of data in very short timescales.
We undertook a full operational review of the key electricity and gas business processes, methods and controls that could impact materially on gross margin and gross margin reporting – and assessed the reasonableness of these. We also assessed the method for determining the gross margin, compared historical and outturn forecasts and derived our own independent forecast. This involved loading significant volumes of data into large databases and undertaking independent modelling. We reported our findings and conclusions along with a catalogue of prioritised risks and issues, and our recommendations for addressing each of these.
Our report provided the energy trading investment bank with the assurance that, subject to a number of findings, our client had a robust business in place, underpinned by appropriate processes, methods and controls. Our client was able to progress the recommendations we made, addressing the areas of weakness we found, improving their business still further.