Blog 3 - Regulation for Forensic Accountants

To me, it seems like being a forensic accountant is a career that is always changing. Why? Because the world is changing. Technology, the internet, the amount of data on this earth is breeding at a rapid pace, and what worked for the forensic accountant 10 years, ago just won’t work in this day and age.

With a digitalized world, the tightening of regulation enables professionals to meet greater demands, as indicated by the Honourable Michael Kirby AC CMG (2011). I think its natural to assume that if technology continues to develop, the role of a forensic accountant is going to have to adapt and mould into something new every few years. When clients rely on you for advice, it’s absolutely imperative to keep up with the development of not only Accounting standards, but the regulatory environment (BDO, 2014).

Speaking to a family friend recently who is an Accountant, she was explaining to me how she frequently gets notifications about any changes in the law. On top of this, she is also travels frequently with colleagues to attend conferences that discuss regulatory change in her particular sector. I think this proves that regulatory changes and changes in the law are taken very seriously by the everyday Accountant. 

References

BDO. (2014). Singapore's 100 Leading Graduate Employers 2013/14. Retrieved from http://www.bdo.com.sg/GTIMediacollated.pdf 

Kirby, M. (2011, March). Forensic Accounting - New Rules and Opportunities . Presented at the Business Valuation and Forensic Accounting Special Interest Groups Conference. Retrieved from http://www.michaelkirby.com.au/images/stories/speeches/2000s/2011/2525-FORENSIC-ACCOUNTING-CONF-MARCH-2011.pdf

Blog 2 - Risk

Because risk is a huge part of IT governance, COBIT 5 for Risk should be a common reference for business owners. It focuses specifically on providing guidance for risk professionals, and provides a comprehensive set of risk scenarios (ISACA, 2013). 

If we look at how businesses manage risk in a real world context, we can look at an example structure within an organization that minimizes risk. 

Where I work, the associate working on the floor will count the till first, and then the supervisor/manager must count it for a second time to make sure everything adds up correctly with what the figure says on the system. This is one example of implementing an organizational structure outlining separation of duties (Harmer & Geoff, 2014) which is a key enabler used in order to mitigate risk.

Using enablers allows a holistic approach. This is needed in order to meet stakeholder requirements, as well as integrating operations and security (Van Akkeren, 2015).

Below are 5 precautions that I think organizations should take in order to avoid risk:

Ensure there is a positive workplace culture, by creating a tone at the top which promotes ethical and reliable practices within.

Outline and explain comprehensive fraud related policies to all workers.

Maintain adequate internal controls (is separation of duties) which are monitored and revised consistently.

Conduct an internal audit.

Conduct background checks on new employees.

References

ISACA.(2013). Cobit 5 Framework. Retrieved from http://www.isaca.org/COBIT/Pages/COBIT-5-Framework-product-page.aspx

Harmer, Geoff (2014). Governance of Enterprise IT based on COBIT 5 : A Management Guide. Retrieved from http://www.eblib.com

Van Akkeren, J. (2015). AYB115 Governance, Fraud & Investigation. Week 3: [Slides]. Retrieved from https://blackboard.qut.edu.au/webapps/blackboard/content/listContent.jsp?course_id=_116816_1&content_id=_5376704_1&mode=reset 

Blog 1 - Tone From the Top

The key focus of IT governance revolves around the concept of managing risk and security to safeguard IT information and systems (ISACA, 2015). Senior executives/managers have the power to create a tone from the top that will ultimately minimize IT related risk in their business (LoParrino & Jaros, 2014).

Good workplace culture, ethics, and behaviour is the answer. Outlined in COBIT 5, this enabler focuses on creating, encouraging, and maintaining desired behaviour. This includes senior management setting an example of what to do, and what not to do.

I work for Australia’s biggest retail company, and managers have always been straight with us about the consequences of stealing, which happens to be immediate termination of employment. After seeing people that I’ve worked with for years just make one mistake and go, I’d say it works as a deterrent to try anything similar. 

"Foil Fraudsters with Strong Internal Controls"

We only have to look as far as Enron (The Economist, 2002), or Worldcom (Atlas, 2015), to know that unethical practices within businesses aren't uncommon, even in large corporations. As we’ve seen a significant rise in the use of technology and social media in the past decade, it would be silly to avoid the topic of IT governance, and the vital role it plays in our society.

References

Atlas, S. (2015). WORLDCOM'S COLLAPSE: THE OVERVIEW; WORLDCOM FILES FOR BANKRUPTCY; LARGEST U.S. CASE. [online] Nytimes.com. Available at: http://www.nytimes.com/2002/07/22/us/worldcom-s-collapse-the-overview-worldcom-files-for-bankruptcy-largest-us-case.html [Accessed 12 Mar. 2015].

Jaros, N. LoParrino, M. (2014). Tone From the Top. Ernst & Young. Available at: http://www.ey.com/Publication/vwLUAssets/EY_-_The_value_of_an_active_board_of_directors/$FILE/EY-tone-from-the-top.pdf [Accessed 12 Mar. 2015].

The Economist, (2002). The real scandal. [online] Available at: http://www.economist.com/node/940091 [Accessed 12 Mar. 2015].

Carrriggs. (2011, March 18). Foil Fraudsters with Strong Internal Controls [Video File]. Retrieved from https://www.youtube.com/watch?v=0BBXWkxwo_0

ISACA.(2015). Cobit 5 Framework. Retrieved from http://www.isaca.org/COBIT/Pages/COBIT-5-Framework-product-page.aspx