What should an IS auditor recommend when finance and marketing departments report differing product profitability results?

Establishing organizational data governance practices is a crucial recommendation in situations where different departments, such as finance and marketing, report varying product profitability results. Data governance involves the management of data availability, usability, integrity, and security in an organization. By implementing robust data governance practices, the organization can ensure that all departments are using consistent and accurate data sources, definitions, and metrics for their reports.

With effective data governance, discrepancies in profitability reporting can be minimized as it promotes standardization of data across departments. This helps in aligning the understanding of key performance indicators and financial metrics, ensuring that all parties are on the same page regarding the criteria used for profitability assessments. Furthermore, data governance encourages accountability and proper oversight of data management processes, leading to more reliable and comparable reporting outcomes between departments.

While user acceptance testing for reports and obtaining management sign-off on report requirements are important practices, they do not address the fundamental issue of data consistency and integrity that arises from differing departmental methodologies. Similarly, using standard software tools for report development might improve process efficiency but does not inherently resolve the discrepancies in the underlying data or reporting frameworks between departments. Thus, establishing a solid foundation of data governance is essential for achieving unified and accurate profitability reporting.