Contributing Member of the Accounting & Financial Analysis Councils

All News Analyses by this Author

Necessity, who is the mother of invention - Plato's promulgations on effective Internal Audit

May 19, 2009

Analysis of:Internal Auditors: Mission Unaccomplished? | www.cfo.com

As economic conditions change, organizational priorities also require adjusting.  By virtue of the Sarbanes Oxley Act (2002) (SOX), organizational resources, including internal auditors, have been heavily directed to what is essentially a legal compliance role, which is normally just one of the areas of internal audit focus.  During the past 7 years organizations that needed to comply with SOX financial reporting requirements directed any competent internal audit and controls specialists to meet reporting deadlines to ensure a clean bill of health from external auditors, in order to avoid the opobrium resulting from any reported infractions.  Some entities established dedicated internal controls functions to take care of the compliance efforts, while others simply directed the existing internal audit departments to take responsibility.  In my opinion, this heavy emphasis on legal compliance resulted in a risky focus away from other key areas, contributing to the current economic crisis

Treasurers at the Helm - From Backroom to the Boardroom

May 7, 2009

Analysis of:Crisis multiplies strains on company treasurers | www.ft.com

Treasurers used to rely on the accounting and finance department  to provide the numbers to forecast cashflow requirements and generally accept these as given to determine their cashflow forecasts, liquidity requirements and risk.  Today's Treasurer needs to be a Corporate Finance expert to ensure the figures provided are in fact reasonable and to ensure cashflow forecasts are accurate and complete.  In fact, as the crisis bites deeper, they also need to assist their senior management team in identifying near-liquid assets that may be converted, as well as support the organization in identifying out of the box opportunities to tap into further lines of credit, and present the company to creditors and would be creditors in a professional and successful manner. Finally, as financial markets continue their roller coaster ride, and even respectable financial institutions are at risk of default, existing financial risk management responsibilities have become essential to corporate survival.

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