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Inside Internal Controls

News and discussion on implementing risk management

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Financial Compliance / Planning / Management

New COSO ERM Guidance for ESG

It is essential to provide leaders with actionable information. Simply rating a risk as high or valuing it at $250,000 is meaningless. Leaders need to be able to make decisions between addressing one risk vs another, and going forward with a project given all the uncertainties related to its success. For that they need clear, detailed information, not a simple risk rating.

 

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Department of Finance Canada issues consultation paper on review of the Canadian Payments Act

A recent Consultation Paper sought comments on whether the 2015 Amendments had been successful in better enabling Payments Canada to meet its mandate to promote the efficiency, safety, and soundness of its systems while taking into account the interests of users.

 

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Online advisors: Stand-alone investment managers or tools for portfolio managers?

While the use of technology can lower the cost of investment advisory services, the introduction of algorithmic technology or other forms of artificial intelligence into the investment advice process introduces new risks to investors which raises questions.

 

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European commission releases proposal to regulate crowdfunding

Crowdfunding Service Providers (CSPs) can provide businesses and individuals with a digital platform to reach out to potential investors for funding. Presently, some EU countries have their own national legislation on crowdfunding while others require CSPs to be licensed and operate under EU frameworks.

 

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Are you managing risk or are you managing the organization?

Stop managing risk – manage the business. Stop talking about accepting or managing risk and start talking about taking the right risks through informed and intelligent decisions.

 

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How significant is the risk of fraud?

fraud

The best resource for understanding the level of fraud risk is the Association of Fraud Examiners’ (ACFE) annual Report to the Nations, their global study of occupational fraud and abuse. Their 2018 Report is now available and, as always, shares some useful and important insights. The ACFE analyzed 2,690 cases from January 2016 to October 2017 from around the world (48% from the USA, the rest evenly split among other regions).

 

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Conference update: Virtual currency exchanges, beneficial ownership and other developments in Canadian anti-money laundering regulations

anti-money laundering

On February 7, 2018, the Canadian federal government had released a consultation paper for comments that has potentially far-reaching implications for compliance with Canadian anti-money laundering (AML) requirements. At the recently concluded 17th Annual Forum on Anti-Money Laundering & Financial Crime in Toronto, some interesting observations were made by various speakers (including representatives from certain Canadian regulators). A number of these observations touched on topics covered by the above-mentioned consultation paper. This article sets out some key highlights.

 

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Jim Comey and the practitioner’s dilemma

It is often difficult to make the right decision when facing challenges in an organization. Maintaining integrity, standing your ground and doing what you believe to be right and part of your responsibilities can be difficult and can make you question the decisions you make.

 

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Improve internal controls over fixed assets (Part 2)

A failure to satisfy proper cut-off, completeness, existence, accuracy and ownership are common problems arising from weak or non-existent fixed asset policies. The overarching approach to satisfying these issues is to design and implement internal controls in proper policies and procedures.

 

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Canadian Securities Administrators provide update on projects aimed at reducing regulatory burden on issuers in the areas of prospectus filings and continuous disclosure

The Staff Notice 51-353 – Update on CSA Consultation Paper 51-404 Considerations for Reducing Regulatory Burden for Non-Investment Fund Reporting Issuers reports on a consultation paper that the CSA issued last year and summarizes comments received in response to the consultation paper, The Staff Notice identifies six options for initial policy projects to be undertaken by the CSA in the near term.

 

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Online advisors: Stand-alone investment managers or tools for portfolio managers?

Online advisors are digital wealth managers. They use information that an investor provides, usually through an online questionnaire, in order to create an investment recommendation.

 

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Drafting interest rate calculation provisions in corporate finance transactions

If a loan document does not comply with the provision for calculating a “nominal” annual rate of interest in order to comply with section 4 of the Interest Act, then the interest rate is capped at 5% per annum. Commercial practice and appellate jurisprudence had confirmed that such provisions complied with section 4. Section 4 states:

 

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Don’t forget to audit controls!

It’s best to have management detect issues and for audit to assess whether those detective controls are adequate.

 

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An idea to help drive effective risk management

We want all decision-makers to consider all the potential consequences of their decision (in fact, all the potential consequences for each option on the table) before making an informed and intelligent judgment. What if the quality of decision-making was a significant factor in assessing performance? Thus affecting compensation and career progression. This idea could help drive effective risk management.

 

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Ontario budget 2018: Financial services updates

The 2018 Ontario Budget includes a number of financial services related developments, with a strong focus on innovation.

 

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