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All News Analyses by this Author

Internal Auditors: Generalists Asked to Perform Specialist Functions

May 18, 2009

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

Many companies are asking more of their internal auditors, particularly in with risk assessment and process improvement, and internal audit departments often lack expertise in those areas.  Unfortunately, the article fails to address three key issues:1.  Even when internal auditors possess process improvement, risk assessment or fraud detection skills, they often lack the industry or sub-industry expertise necessary to allow them to identify red flags or know best practices.2.  Many firms have no internal audit function whatsoever, nor do they engage any external providers to assist with such reviews.  This is particularly true in the hedge fund business, one of the leading industries to hit the headlines this year.3.  Staff turnover with internal and external auditors increases the chances that risk points are missed.

Short Selling Rules - Why Do Mutual Fund Companies Care?

January 8, 2009

Analysis of:Fund managers fight tougher disclosure rules | www.ft.com

Perhaps most important is that the IFSA, the ICI and and IMA have issued a joint statement. It is possible these organizations would support a concept similar to 13F reporting in the US. Emphasis by regulators and market participants on short selling - versus any other kind of transactional activity - speaks to a lack of thought about what moves markets. Many hedge funds would be sorely taxed from an infrastructure standpoint to provide transparency.  This, coupled with increased emphasis on operational risk, is likely to squeeze small hedge funds out of the market and provide significant barriers to entry for new participants.

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