Richard Steinberg 270004HRBG firstname.lastname@example.org | | Tags:  openpages education risk-analytics compliance risk-management risk | 0 Comments | 2,373 Visits
You may remember hearing about problems with the College Board, which owns the SAT, and the Educational Testing Service (ETS), which administers the tests. In the recent SAT cheating scandal the College Board and ETS were accused of having lax security and a system that failed to punish cheats. But problems go back further, when a couple of years ago the SAT has serious issues with incorrect scoring of tests. And media reports speak to extensive incorrect scoring and losing test results in England in 2008, with the UK Parliament calling their operation a "shambles." And as far back as 1983 cheating was suspected in California. For details you may want to refer to my blog posting of November 2011, which includes analysis of what the accused organizations did, or rather didn’t do, to right the wrongs.
Well, we now find another player in this industry accused of wrongdoing. Princeton Review, which provides help to students in preparing for college entrance exams and sells study guides, finds itself accused of defrauding the federal government. An arm of the company that provides after-school tutoring to students at troubled schools is said to have falsified records – including forging student signatures, falsifying sign-in sheets, and making false certifications – in order to boost payments due the company. Relevant is that the company was informed of these allegations back in 2006, but prosecutors, who are now suing, say the fraud continued as nothing was done to fix the system. For what it’s worth, Princeton Review reportedly closed its tutoring division and says most of its current management joined the company after the alleged fraudulent activity took place.
But what’s striking is how the few players comprising this industry have had serious problems – not only in allowing fraud to occur, but also in failing to act in the face of wrongdoing. And this is an industry supposedly driving high academic standards! Yes, we know academic institutions are not immune to misconduct, but we can wonder how these industry players each went so very wrong. And food for thought – do we see other industries with an inordinate number of companies experiencing widespread instances of non-compliance, fraud or other misconduct? And what does that say about the culture not only of the individual organizations, but the industry as a whole? Hmmmm.
Chief audit executives do a lot of things really well, adding value to the companies they serve. What is especially interesting is how well many, especially CAEs of larger companies, gain information and insight through networking. Many are involved with their peers in industry or geographically based discussion groups, sharing through blogs, conferences, and internet-based information exchanges. And of course there’s still the opportunity to communicate via email or text or pick up the phone to talk with a valued colleague.
You may be as amazed as I in continuing to encounter intelligent, accomplished business people who still don’t understand what Sarbanes-Oxley’s internal control requirements are about. Let me share a recent experience.
Erwin Boeren 270002C43V ERWIN.BOEREN@NL.IBM.COM | | Tags:  openpages risk & of (track ii solvency governance convergence management 1014) and grc basel compliance | 0 Comments | 2,783 Visits
Convergence of Governance, Risk & Compliance, Basel II and Solvency II (Track 1014)
IBM Vision 2012, Tuesday May 16th, 16:45 – 17:45 pm I will be presenting the Convergence
of Governance, Risk & Compliance, Basel II and Solvency II.
In this session I will take you through the most common questions I received from our customers facing Basel II and Solvency II. I will help you understand the challenges from an Operational Risk perspective and speak about how my clients have overcome these challenges.
Convergence, Risk Adoption, Risk Montoring, Loss Registration, Risk Reporting
and Dashboarding and Regulatory Reporting are topics that will be discussed in
Hope to see you in Orlando next week!
Twitter : #Vision12
Blog post by Erwin Boeren
Senior Governance, Risk & Compliance specialist IBM
Twitter : http
Erwin Boeren 270002C43V ERWIN.BOEREN@NL.IBM.COM | | Tags:  grc risk reporting ibm compliance fsr cognos solvency regulatory ii basel openpages | 0 Comments | 3,004 Visits
Convergence of Performance Management and Risk Management - Part 2
the increase of the Governance, Risk & Compliance maturity level at many of
my clients I see that clients start to realize the benefits of the integration
of GRC activities in their Performance Management cycle. Therefore a follow up
on my previous article around Risk Management and the convergence with
Let me share some insights on Risk & Performance Management initiatives that keep clients busy around Europe. The following 4 items came up in the last 3 months.
1. Cost control and process performance improvement give us the opportunity to embed controls in our process. Lessons learned from Six Sigma and Lean can give us guidance here.
2. How do I manage organizational and regulatory change and monitor the impact on business processes, policies and my risk and control framework?
3. Trending topic is emerging risks, am I able to identity risks that are coming to me over time?
4. Integrated Financial and Risk reporting, an excellent example of ‘Where Performance Management meets Risk Management’.
Cost control and Process improvements
Implementing and testing controls has become a huge cost for many organizations. That is why some of my clients are now looking for a way to reduce cost by embedding controls in their existing business processes. This goes hand in hand with the global initiative on cost reduction. While optimizing or even re designing core business processes internal controls are being embedded in the process. What I see is that the organizations that involve process owners and process contributors are most successful. This is an initiative that we have seen before in Lean Six Sigma projects. The only way to optimize processes and to reduce waste is to involve the process owners. Instead of increasing regulatory pressure we should seek a solution in this area in my opinion. Business cases around this have proven to be very successful and savings up to millions of Euros per year have been achieved.
Regulatory changes are a huge concern of many risk, compliance, legal and audit professionals. How can we monitor these changes and how can we understand the impact on our organization? Taking this together with the fact that policy management is changing from a ‘must do’ once a year to a continuous process tells us that an integrated approach to Governance, Risk & Compliance is necessary to drive performance. I come across clients that have a monthly Performance Report that shows how they derived business objectives from their policies and how they are performing on a compliance level to these objectives. What risks did they identify in this process and how will they respond to these risks? Organizations realize that they need to understand the correlation between processes, policies, regulations, business objectives, risks and controls and how they might impact each other. An integrated GRC view is the only way to face this challenge.
Emerging Risk Modelling
One of the trending topics among customers is Emerging Risks. Can we model risks that we see coming and can we follow up on risks that are getting closer or fading away? Analytical Risk modeling is an answer to this question. This also let you perform risk forecasting with different scenarios. Interesting question is how the increase of a risk exposure in an operating entity will impact my group level exposure? Risk Analytics, derived from the Performance Management area can help us answer these questions. A financial performance management cycle contains the exact same characteristics.
Integrated Financial and Risk performance reporting
Financial and Risk reporting are standard items in today’s Annual Reports, Tax statements, Management reports and Regulatory reports. The big question is how do I keep all of this information organized in such a way that I understand the source of the information, the transformation it has gone through, the owner of the information and most important when information changes at the last moment that all information output contains the latest version? No bigger reputational risk than sending out inconsistent information to stakeholders. Some organizations saw their share price drop with 25% due to inconsistent external reporting. One of my clients has implemented a solution that orchestrates all of these information sources with workflow capabilities and even XBRL output. From a risk perspective this is a great mitigation of your reputational risk and an excellent example of ‘Where Performance Management meets Risk Management’.
Blog post by Erwin Boeren
Senior Governance, Risk & Compliance specialist IBM Europe
Twitter : http
Erwin Boeren 270002C43V ERWIN.BOEREN@NL.IBM.COM | | Tags:  analytics grc busness management openpages ibm erwin boeren performance risk | 0 Comments | 1,368 Visits
Last year IBM acquired OpenPages as a strategic move into the area of Governance, Risk and Compliance. The lasest announcement to acquire Algorithmics (quantitative risk management) shows the continuous commitment of IBM in the GRC market. GRC software will integrate into the Business Analytics Software group, the area where the former acquisitions like Cognos, SPSS and Clarity systems already resides.
Now that Risk Management is evolving, more and more organizations are starting an enterprise approach to risk management. And this is where I see the need for Risk and Performance Management convergence.
In past Risk Management implementations I see that a major portion of time and budget was spent on Risk Reporting and Dashboarding. Especially the need for self service reporting, where users can ad hoc create their own risk reports, is growing. We do not want to wait in the queue waiting for our report to be created. 2 days later you missed the opportunity to respond and the loss is there.
With this self service capability the question automatically pops up 'can I trust my data'. And now we are back in the area of data governance. This is exactly where the area of Performance Management is today.
Apart from these reporting and dashboarding capabilities Enterprise Risk Management means alignment of risks and controls to the strategic initiatives of the organization. What will prevent me from reaching my business goals? Isn't this defined as a risk? And how will we prevent this from happening? Wasn't that defined as a control?
Even more interesting are questions like, 'What if I was able to perform risk scenario planning?', 'What if I could predict risks from happening?' or 'What is the correlation between the risks that have materialized?'.
And there is the proof that Risk Management and Performance Management have lots in common and should be integrated. Lets call it Business Analytics.
Governance, Risk & Compliance Leader
IBM IOT Southwest Europe
Richard Steinberg 270004HRBG email@example.com | | Tags:  openpages erm risk itg it-risk coso risk-management | 0 Comments | 2,423 Visits
If you haven't already seen it, it's worth a look – The Committee of Sponsoring Organizations of the Treadway Commission just published a thought paper dealing with risks related to cloud computing. It leverages off COSO's enterprise risk management framework, speaking specifically to issues surrounding hosted services delivered over the internet. The paper is geared not to the techie, but rather to management level personnel who need to understand not only the benefits, but also the associated risks. The paper briefly outlines the many benefits of cloud computing, including greater technology value at lower cost, faster speed of deployment, common technology platforms, reduced need for support personnel and related expenditures, and environmental benefits.
Naturally, most of the focus is on the risks. These include the strategic – with lower barriers of entry for new competitors and related challenge to current business models – and dependency on cloud service providers which in turn drives legal and related risks. Others include lack of transparency, reliability and performance issues, security and compliance concerns, and elevated risk of cyber attack or data leakage. The paper also deals with issues inherent in moving to the cloud, such as the extent to which management considers the impact on the company's organization and IT and other personnel resources, noting "In many cloud scenarios, the organization no longer has complete or direct control over technology and technology-related management processes. Management must determine if it has the risk appetite for the entire universe of potential events associated with a given cloud solution as some of these events extend beyond the organization's traditional borders and include some events that have an impact on the [cloud service provider(s)] supporting the organization."
The paper also discusses cloud issues in the context of COSO's ERM Framework's eight components, outlining how each can be addressed and used in evaluating cloud computing alternatives. It provides suggestions for dealing effectively with the more significant risks, and highlights key decisions to be made by senior management – as well as responsibilities of C-suite executives – and areas on which the board of directors needs to focus its attention. If your company is already in the cloud or considering going there, the paper is worth the read.
As an extension to the annual Pric
By functioning as a consultative arm to the business and helping to establish an enterprise-wide risk and control framework, audit has the capacity to influence the continued improvement of process level controls as well as the macro level control environment. Internal audit can bring to the business best practices for measuring, managing and prioritizing risks while cross pollinating effective management techniques and internal controls across the enterprise.
To learn more about Internal Audit and its evolving role in ERM, check out this white paper.
If you’re attending OpRisk USA in New York City March 24-26, don’t miss Scott Green’s discussion on reinventing risk processes. A frequent speaker and well versed GRC industry expert, Scott is the managing vice president of operational risk management at Capital One and also serves as vice president of the OpenForum User Group. At OpRisk USA, Scott will make a case for risk process integration and success factors in driving change to create a more effective and efficient ORM.
It’s well known that a company’s tone at the top is critically important in determining its culture, including whether or not it will act with integrity and ethical values – fundamental elements of effective internal control and risk management. And we know it’s not only the words spoken at the top, but also the CEO’s actions that drive culture. What brings this to mind is the recent conviction of the CEO of fraud detection firm Fraud Discovery Institute. While a conviction of the head of this type of firm might appear unusual though not particularly noteworthy, what’s truly compelling about this news is that the CEO is none other than Barry Minkow.