The ICI "Certification Series" has been completely updated and is available online to everyone around the world! Course content prepares individuals to design and/or assess internal control and to assist management in installing internal control processes. In addition, the series prepares candidates for the Certified Internal Control Specialist (CICS) Examination.
Online course pricing has been reduced by over 70%, so get started today!
****Limited Time Only****
Test your Knowledge of Internal Control
*** Take the Internal Control Knowledge Mini-Assessment ***
The Internal Control Institute has developed a CICS Common Body of Knowledge Mini-Assessment that helps an individual determine their knowledge as it relates to governance and control practices. Results point out areas of knowledge that may require additional training and experience. The assessment also provides a measurement to the individual's readiness for CICS certification. The assessment measures core knowledge in eight critical areas including: Internal Control - Principles, Terms and Concepts, Internal Control Environment, Risk Management, Assessing Application Controls, Business System Control Assessment, Risk Assessment, Internal Control Measurement and Reporting, and Governance Practices
Dr. Michael Pregmon, Jr. COO and Managing Director
Last month we discussed the fact that many organizations fail to install adequate controls and then are surprised when they experience fraud or embezzlement, etc. Why does this happen so often? The reason is because of the relationship between controls and business risk.
The correlation between internal control and business risk is an inverse relationship. That means the more internal controls that are installed into an organization, the lower the level of business risk. This is also why smaller companies and those run by business owners are particular vulnerable. Medical and dental offices tend to be smaller in size and likewise fall into this category. The old saying: "familiarity breeds contempt" truly applies here! Business owners who are running their business tend to reluctantly introduce controls because they feel these will impact their personal relationship with their "trusted" employees. After all, why install a system of "checks and balances" upon the activities of a trusted friend and employee? But, this is a costly mistake for many businesses.
The Internal Control Common Body of Knowledge (CBOK) clearly covers this fallacy as follows:
"18.104.22.168 Segregating Custody of Assets from Accounting
The reason for not permitting the person who has temporary or permanent custody of an asset to account for that asset is protection against defalcation. When one person performs both functions, there is an excessive risk of disposing of the assets for personal gain and adjusting the records to cover it up."
In the text entitled "Enterprise Risk Management Best Practices" author Anne M. Marchetti explains the two categories of fraud. These are (a) fraudulent financial reporting and (b) misappropriation of assets.
She goes on to explain:
"Fraudulent financial reporting may be accomplished by:
Manipulation, falsification or alteration of accounting records
Misrepresentation in or intentional omission from the financial statement of events,transactions, or other significant information.
Intentional misapplication of accounting principles relating to amounts, classification,manner of presentation or disclosure.
Misappropriation of assets may be accomplished through stealing, embezzling or individual or group facilitation of payment for goods or services that were not received."
Interestingly, time after time we at the Internal Control Institute learn about fraudulent occurrences that fit exactly into the categories outlined above. Perhaps a more appropriate title to this brief article should be "Lack of Internal Controls is Risky Business." You be the judge!
HELP US IMPROVE INTERNAL CONTROL SYSTEMS WORLDWIDE
The Internal Control Institute™ (ICI) improves organizational Internal Control worldwide by providing training, products and services and individual Professional Certifications recognized internationally. The Institute's Board of Advisors has determined it would like to further expand into areas where it is not directly represented. ICI provides world-class programs and its intellectual property to affiliates free of charge and shares all program revenue with them. If your organization is interested in partnering with ICI to earn revenue while you contribute to the development of the internal control profession worldwide please contact Dr. Michael Pregmon, Jr., Chief Operations Officer, by email at:
firstname.lastname@example.org or by phone at
727-538-4113in the USA.
ICI Affiliate News:
The Internal Control Institute is conducting certification training in a classroom format for the internationally recognized CICS (Certified Internal Control Specialist) certification in internal control. Information on these programs regarding dates and schedules can be found on the Events tab on our Website or directed to the affiliate named below.
ICI Course Internal Controls, Risks, and Compliance - May 2018 - Nextel
Training Plans :
Porto Alegre June 25-29, 2018
Curitiva July 16-20, 2018
Belem August 6-10
Belo Horizonte August 27-31, 2018
For more details on planned training please check on the website below, or send a message to Mr. Eduardo Person Pardini.
International Association for Internal Control The headquarters of ICI China has moved to a new location. The new address is as follows. Individuals or companies interested in internal control training and Certification should contact:
Mr. Qiu Jianting
Room 1039, Block A, Jinmao Building, No. 18, Xizhimenwai Street,
ICIB president Yves Dupont presented his association and their development in the area of Control Self-Assessment at the FERMA Forum (European Risk Managers association) in Monte-Carlo. He hereby highlighted the complementarity between risk management and internal control, insisting on the role of first line operational management. For more information: http://www.icib.org/other-events.ws
For more information on scheduled training and exams please contact Mr.Yves Dupont of ICI Belgium at:
ICI is proud to announce it has entered into an agreement with Better Business Governance - APAC PTE LTD (BBG) as its representative for Products, Services and Internal Control Certifications (CICS/CICP) in Myanmar and Cambodia. Better Business Governance will be responsible for all development activities, including professional training and Certification. For more information on upcoming activities in this area please contact:
ICI Mexico is working
to translate training course materials into Spanish and also to develop the web page for ICI Mexico in Spanish. For more information on upcoming activities in this area please contact the following:
ICI has entered into an agreement with GRC Consultancy Pte Ltd. (ICI Singapore, Malaysia, Indonesia and Taiwan) as its representative for Products, Services and Internal Control Certifications (CICS/CICP) in those territories.
Individuals or companies interested in internal control training or Certification should contact:
Opening 6 CICS training courses in Ankara and Istanbul.
Providing full scope of ICI services in Turkey, as well as a specific corporate internal control accreditation system with ICI Headquarters. The government institutions, banks and corporations will be accredited jointly by ICI and ICI Turkey based on a certain rating/assessment program.
Targeting banking and public institutions with the main objective being to introduce ICI and Professional Certifications to these 2 industries. More than 2000 professionals will be made aware of and familiar with ICI and ICI' s Certifications.
For information on scheduled ICI Certification and program sessions, please contact ICI Turkey at it's new address or the individual contacts below:
Each month the staff of The Internal Control Institute reviews hundreds of articles related to Internal Control and Corporate Governance. Here are brief summaries of some of the top articles (along with links to the original article) that may be of interest to you.
How to Prevent Internal Control Breakdowns and Workplace Harassment
By Sonja J. McGill
May 16, 2018
Robust internal controls are vital for companies to detect and remedy fraud, waste and abuse, i.e., embezzlement, as a component of its financial oversight. Incorporating similarly robust internal controls for addressing sexual harassment complaints must be a priority, particularly when the targets of such claims are executive or C-suite leadership for publicly traded companies. The rapid downfall of Steve Wynn at Wynn Resorts is a cautionary tale detailing why incorporating such systems is of paramount importance. The Wall Street Journal recently recounted several instances where implementing a dynamic internal controls system would have provided senior management, and the board of directors, with proactive measures to change the company's culture prior to Wynn's speedy demise from the company late last year.
Despite the efforts of authorities around the world, corrupt and fraudulent behaviour continues to flourish, with a debilitating economic effect. According to data published by Experian, fraudulent activity now costs the UK alone £190bn per year. The public sector loses an estimated £40.3bn a year, while fraud in the private sector costs the UK economy £140bn.According to PwC's 2018 Global Economic Crime and Fraud Survey, 49 percent of organisations said they have been a victim, up from 36 percent in 2016. And while this increase could, in part, be due to growing global awareness of the threat, the unfortunate truth is that companies today operate in an increasingly challenging environment in which both internal and external threats are becoming harder to repel. Many organisations are also unaware of the full extent of the threats they face.
The Public Company Accounting Oversight Board censured Deloitte & Touche LLP and imposed a $500,000 penalty against the Big Four firm for overlooking material accounting errors during three consecutive audits of Jack Henry & Associates, Inc., a Missouri-based IT provider for banks and credit unions.
The PCAOB charged Deloitte with violating its rules and auditing standards in its fiscal year 2012, 2013 and 2014 audits of Jack Henry. It found Deloitte was primarily responsible for the violations because none of the engagement personnel the firm assigned to audits of Jack Henry had enough software industry experience and knowledge (including of the relevant accounting rules) to properly evaluate and audit the accounting for software license revenue.
For decades, CEOs have largely been seen as the top rung of the ladder, the ultimate decision makers and the source of "tone at the top," to use an overused phrase. That perception is by no means wrong, but the buck doesn't stop there. There's one more rung of the ladder: the board of directors. Any business executive is well aware the board is essentially their boss, but to the general public, the board's role in business ethics and values hasn't always been so visible. In the last few years, that's changed. The board has emerged as the ultimate and more external-facing layer of corporate accountability. Why? We're undergoing an ethical transformation across industries -- from Silicon Valley to Hollywood and beyond -- and more CEOs are being fired for ethical lapses than ever before. When the CEO messes up, members of the board become the voice we hear most clearly in the midst of corporate turmoil.
Wells Fargo Altered Documents About Business Clients
Wells Fargo recently discovered that some workers altered documents about business customers, raising new concerns about the embattled bank's internal system of checks-and-balances. The improper activity took place in 2017 and early 2018 and was brought to light by multiple Wells Fargo employees who alerted management, a person familiar with the matter told CNNMoney.
The document altering happened in Wells Fargo's business banking group, which caters to medium-sized businesses with annual sales of $5 million to $20 million. A Wells Fargo investigation found that some employees may have broke with procedure when they changed forms that are required by anti-money laundering laws, the person said.
Samsung Securities Disciplines Employees Who Sold 5 Million 'Ghost' Shares
The announcement comes a month after a trader at the firm mistakenly issued $100 billion-worth of stock to employees
By David Kimberley
May 23, 2018
Samsung Securities, a South Korean investment firm, said this Wednesday that it has taken action against a number of employees involved in a dividends error last month. The 'Fat Finger' crisis led to the firm mistakenly issuing stock and giving it to their employees as dividends. The error occurred last April when a trader was supposed to send 2.8 billion won ($2.6 million) worth of shares to employees as dividends. Instead, the trader sent 2.8 billion shares, worth approximately $100 billion. Despite repeated warnings from the company, some employees quickly sold off approximately 5 million shares. The sixteen employees that sold off shares will either be suspended, dismissed or have their pay cut. Five others who attempted to sell off their shares will face similar punishments.
Just a few days into his role as the acting Indian Finance Minister, Piyush Goyal, took on a major task - to try to clean up the country's beleaguered banking system. Mr Goyal, whose usual role is as the Railways and Coal Minister, last Thursday gathered together the heads of 11 of India's ailing public sector banks in New Delhi, as the industry continues to reel under the impact of the country's largest ever bank loan fraud that came to light this year and the weight of bad loans. "I am extremely confident that we will be able to overcome the banking sector legacy issues in a very short period of time," Mr Goyal posted on Twitter following the meeting. Known in political circles as a troubleshooter, he is standing in for Finance Minister Arun Jaitley, who underwent a kidney transplant last week.
Individual commitment to a group effort - that is what makes a team work, a company work, a society work, a civilization work.
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The Internal Control Institute™ (ICI) is a worldwide organization devoted exclusively to internal control and corporate governance. The Institute is dedicated to the development of world-class educational programs and best practice guidelines on internal control and corporate governance, based on the Sarbanes-Oxley Act and the COSO internal control framework. Visit us on the web at the Internal Control Institute
Control Chatter is a monthly news summary of the top stories concerning internal control and corporate governance. Control Chatter is prepared by the staff of Internal Control Institute for the benefit of their members and associates. Please consider it for your personal use or pass it on to associates who may have an interest in one or more of the topics by clicking on the Forward email button below.