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Inside Internal Controls

News and discussion on implementing risk management

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Accounting Systems and Controls

Do record keeping time limits mean anything anymore?

One of the most common questions asked by the lay taxpayer is for how long they need to keep their tax records. And while there is a legislated answer for this, one wonders whether it is ever safe to destroy records.

 

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Why is internal audit not seen positively?

One of the findings in a new report by Deloitte, their 2018 Global Chief Audit Executive research survey, is that only 33% of CAEs believe their function is seen positively.

 

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Standing Committee on Finance releases recommendations on Canada’s anti-money laundering and anti-terrorist financing regime

anti-money laundering

Recently, the House of Common’s Standing Committee on Finance released its report titled, “Confronting Money Laundering and Terrorist Financing: Moving Canada Forward” (the “Report”). The Report was released pursuant to the Standing Committee’s mandate under Standing Order 108(2), which directed the Committee to study the Proceeds of Crime (Money Laundering) and Terrorist Financing Act1 (“PCMLTFA”) and was […]

 

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Internal audit is your third line of defense

In a perfect world, internal controls would be 100% effective once implemented. In reality, organizations needs multiple lines of defense or barriers to guard against the risk that they will not achieve their objectives. The internal audit function is the last of three lines of defense recommended by the Institute of Internal Auditors (IIA) in […]

 

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Top 10 most-read Inside Internal Controls posts for 2018

This year on the Inside Internal Controls blog we’ve been covering some of the hot topics in internal controls, governance, information technology, not-for-profit, and business management.

 

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Costco reports a material weakness in internal control. But is it really?

In an Oct. 4th news release, Costco Wholesale announced its operating results for the 4th quarter and full year expecting to report a material weakness in internal control.

 

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It’s almost year end; avoid cut-off errors

Cut-off errors are common and it is important that you avoid them, particularly at year end when one fiscal year will be closed and finalized for the external audit or as a precursor to starting the new fiscal year.

 

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Talking about risk and opportunity

Some talk about opportunity as “the other side of the coin” from risk. COSO views the two words, risk and opportunity, as one is good and the other is bad. ISO seems them differently, defining risk as the effect on objectives. That effect could be positive or harmful.

 

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SEC investigates cyber-related frauds

On October 16th, the US Securities and Exchange Commission published Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934 Regarding Certain Cyber-Related Frauds Perpetrated Against Public Companies and Related Internal Accounting Controls Requirements.

 

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Bitcoin and cryptocurrency litigation

Bitcoin and other cryptocurrencies are gaining more attention as days pass. Aside from the advantages that cryptocurrencies have like anonymity and easy international transactions, people are enticed by the fact that it can become a good investment.

 

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Use payroll reports to improve internal controls

Payroll reports, if properly designed, prepared, distributed and reviewed, assist with more than just cost control—they can help to significantly improve several internal controls. Very simply put, internal controls include the activities, processes, policies and procedures which an organization implements to ensure that it meets its objectives.

 

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What constitutes a MAC in an M&A deal?

On October 1, 2018, the Delaware Court of Chancery released its decision in Akorn, Inc. v. Fresenius Kabi AG, finding for the first time that a buyer had properly terminated a public company merger agreement based on the occurrence of a “material adverse effect” (sometimes also referred to as a “material adverse change,” “MAC” or “MAE”).

 

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Uniting risk management with strategic planning

Who can argue that the consideration of what might happen (what some refer to as risk) should be part of the strategic planning process? Objectives and strategies should be set only after thinking carefully about where you are, what is happening around you, and what may happen in the future.

 

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Why are SOX compliance costs increasing so much?

From a recent survey by Protiviti, the information on how many organizations had to issue a cyber-security disclosure is interesting. Apparently, this generally resulted in an increase on SOX compliance hours – although the reason for a significant increase is not clear.

 

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Draft amending regulations issued under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, including in respect of virtual currencies and prepaid cards

New regulations issued June 9, 2018, follow the recent 2016 Financial Action Task Force (FATF) Mutual Evaluation Report for Canada (the “FATF Report”) which concluded that Canada largely has a strong legal framework and competent authorities dealing with money laundering and terrorist financing risks, but noted certain deficiencies that needed to be addressed.

 

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