International risk management:systems, internal control and corporate governance

This book is very practical in its international usefulness (because current risk practice and understanding is not equal across international boundaries). For example, an accountant in Belgium would want to know what the governance regulations are in that country and what the risk issues are that he/she needs to be aware of. This book covers the international aspect of risk management systems, risk and governance, and risk and accounting. In doing so the book covers topics such as: internal control and corporate governance; risk management systems; integrating risk into performance management systems; risk and audit; governance structures; risk management of pensions; pension scheme risks e.g. hedging derivatives, longevity bonds etc; risk reporting; and the role of the accountant in risk management. There are the case studies through out the book which illustrate by way of concrete practical examples the major themes contained in the book. The book includes highly topical areas such as the Sarbanes Oxley Act and pension risk management.

Budgeting, budgetary control and management information in the highways departments

The need for an adequate information system for the Highways Departments in the United Kingdom has been recognised by the report of a committee presented to the Minister of Transport in 1970, (The Marshall Report). This research aims to present a comprehensive information system on a sound theoretical basis which should enable the different levels of management to execute their work adequately. The suggested system presented in this research covers the different functions of the Highways Department, and presents a suggested solution for problems which may occur during the planning and controlling of work in the different locations of the Highways Department. The information system consists of:- 1. A coding system covering the cost units, cost centres and cost elements. 2. Cost accounting records for the cost units and cost centres. 3. A budgeting and budgetary control system covering, the different planning methods and procedures which are required for preparing the capital expenditure budget, the improvement and maintenance operation flexible budgets and programme of work, the plant budget, the administration budget, and the purchasing budget. 4. A reporting system which ensures that the different levels of management are receiving relevant and timely information. 5. The flow of documents which covers the relationship between the prime documents, the cost accounting records, budgets, reports and their relation to the different sections and offices within the department. A comprehensive cost units, cost centres, and cost elements codes together with a number of examples demonstrating the results of the survey, and examples of the application and procedures of the suggested information system have been illustrated separately as appendices. The emphasis is on the information required for internal control by management personnel within the County Council.

A contingency theory perspective on the risk management control system within Birmingham City Council

In recent years the topic of risk management has moved up the agenda of both government and industry, and private sector initiatives to improve risk and internal control systems have been mirrored by similar promptings for change in the public sector. Both regulators and practitioners now view risk management as an integral part of the process of corporate governance, and an aid to the achievement of strategic objectives. The paper uses case study material on the risk management control system at Birmingham City Council to extend existing theory by developing a contingency theory for the public sector. The case demonstrates that whilst the structure of the control system fits a generic model, the operational details indicate that controls are contingent upon three core variables—central government policies, information and communication technology and organisational size. All three contingent variables are suitable for testing the theory across the broader public sector arena.

Integrating risk management with performance management

This article argues that, post Enron, governance reforms around the world have served to raise the profile of risk management, and emphasise the need for a corporate wide approach to internal control that is overseen by the Board of Directors. In the US, this is most clearly demonstrated by the emergence of Enterprise Risk Management (ERM), defined as 'a process, effected by an entity's board of directors, management and other personnel, applied in strategy setting across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.' (COSO, 2004, p.2). In practical terms, however, the introduction of an enterprise wide holistic risk management system poses a big challenge to all but the smallest of organisations. The financial crisis has clearly shown that enterprise wide risk management remains a dream rather than a reality for even the world's largest and once highly respected companies.

Reporting and managing risk:a look at current practice at Tesco, RBS, local and central government

These case studies from CIMA highlight the need to embed risk management within more easily understood behaviours, consistent with the overall organisational culture. In each case, some form of internal audit team provides either an oversight function or acts as an expert link in that feedback loop. Frontline staff, managers and specialists should be completely aligned on risk, in part just to ensure that there is a consistency of approach. They should understand instinctively that good performance includes good risk management. Tesco has continued to thrive during the recession and remains a robust and efficient group of businesses despite the emergence of potential threats around consumer spending and the supply chain. RBS, by contrast, has suffered catastrophic and very public failures of risk management despite a large in-house function and stiff regulation of risk controls. Birmingham City Council, like all local authorities, is adapting to more commercial modes of operation and is facing diverse threats and opportunities emerging as a result of social change. And DCMS, like many other public sector organisations, has to handle an incredibly complex network of delivery partners within the context of a relatively recent overhaul of central government risk management processes. Key Findings: •Risk management is no longer solely a financial discipline, nor is it simply a concern for the internal control function. •Where organisations retain a discrete risk management cadre – often specialists at monitoring and evaluating a range of risks – their success is dependent on embedding risk awareness in the wider culture of the enterprise. •Risk management is most successful when it is explicitly linked to operational performance. •Clear leadership, specific goals, excellent influencing skills and open-mindedness to potential threats and opportunities are essential for effective risk management. •Bureaucratic processes and systems can hamper good risk management – either as a result of a ‘box-ticking mentality’ or because managers and staff believe they do not need to consider risk themselves.

Risk management in FTSE 100 companies

In recent years the science of risk management has developed substantially, and many large companies and public sector organisations have established separate risk functions employing specialist staff. The reasons behind such developments are varied but they denote an increasing consciousness of a need to actively manage risks and, in compliance with regulations on corporate governance, ensure that an effective internal control system is in operation.

From ‘poor parenting’ to micro-management:coalition governance and the sponsorship of arm’s-length bodies in the United Kingdom, 2010–13

The delegation of public tasks to arm’s-length bodies remains a central feature of contemporary reform agendas within both developed and developing countries. The role and capacity of political and administrative principals (i.e. ministers and departments of state) to control the vast network of arm’s-length bodies for which they are formally responsible is therefore a critical issue within and beyond academe. In the run-up to the 2010 General Election in the United Kingdom, the ‘quango conundrum’ emerged as an important theme and all three major parties committed themselves to shift the balance of power back towards ministers and sponsor departments. This article presents the results of the first major research project to track and examine the subsequent reform process. It reveals a stark shift in internal control relationships from the pre-election ‘poor parenting’ model to a far tighter internal situation that is now the focus of complaints by arm’s-length bodies of micro-management. This shift in the balance of power and how it was achieved offers new insights into the interplay between different forms of governance and has significant theoretical and comparative relevance. Points for practitioners: For professionals working in the field of arm’s-length governance, the article offers three key insights. First, that a well-resourced core executive is critical to directing reform given the challenges of implementing reform in a context of austerity. Second, that those implementing reform will also need to take into account the diverse consequences of centrally imposed reform likely to result in different departments with different approaches to arm’s-length governance. Third, that reforming arm’s-length governance can affect the quality of relationships, and those working in the field will need to mitigate these less tangible challenges to ensure success.

Current knowledge on the role of the inferior frontal gyrus in Theory of Mind - a commentary on Schurz and Tholen (2016)

Schurz and Tholen (2016) argue that common approaches to studying the neural basis of “theory of mind” (ToM) obscure a potentially important role for inferior frontal gyrus (IFG) in managing conflict between perspectives, and urge new work to address this question: “to gain a full understanding of the IFG's role in ToM, we encourage future imaging studies to use a wider range of control conditions.” (p332). We wholeheartedly agree, but note that this observation has been made before, and has already led to a programme of work that provides evidence from fMRI, EEG, and TMS on the role of IFG in managing conflict between self and other perspectives in ToM. We highlight these works, and in particular we demonstrate how careful manipulation within ToM tasks has been used to act as an internal control condition, wherein conflict has been manipulated within-subject. We further add to the discussion by framing key questions that remain regarding IFG in the context of these. Using limitations in the existing research, we outline how best researchers can proceed with the challenge set by Schurz and Tholen (2016).

The role of leader-member exchanges in mediating the relationship between locus of control and work reactions

The relationship between locus of control, the quality of exchanges between subordinates and leaders (LMX), and a variety of work-related reactions (intrinsic/extrinsic job satisfaction, work-related well-being, and organizational commitment) are examined. It was predicted that people with an internal locus of control develop better quality relations with their manager and this, in turn, results in more favourable work-related reactions. Results from two different samples (N=404, and N=51) supported this prediction, and also showed that LMX either fully, or partially, mediated the relationship between locus of control and all the work-related reactions.

Differential moderating effect of locus of control on effect of driving experience in young male and female drivers

Investigations of relationships between the specific personality variable, locus of control (LOC, Rotter, 1966) and driver behaviour or accidents have returned contrasting results. Review suggests dependence on gender or experience characteristics of participants, suggesting these factors interact with LOC to influence driving. Relationships were investigated in terms of influence on the eight driving styles of the Multidimensional Driving Style Inventory (MDSI, Taubman-Ben-Ari, Mikulincer & Gillarth, 2004) in young drivers (18-29 years). Gender and LOC differences in driving styles previously related to accidents were proposed. It was also proposed that driving experience influences driving style, and LOC influences effect of driving experience. Gender differences were found for dissociative, anxious, patient, risky, angry and high velocity styles. Women had more external LOC than men, and driver stress styles increased with more external LOC, but reduced with increased driving experience, but so did patient style. High velocity style increased with experience. Controlling for LOC revealed important gender differences in effect of experience: positive effects for men (reducing angry and high velocity, increasing carefulness) and negative effects for women (increasing angry and higher velocity, reducing carefulness). Findings suggest negative influence of high internal LOC on young men in terms of its interaction with experience.

Mathematical modelling and control of agitated extraction columns

Liquid-liquid extraction has long been known as a unit operation that plays an important role in industry. This process is well known for its complexity and sensitivity to operation conditions. This thesis presents an attempt to explore the dynamics and control of this process using a systematic approach and state of the art control system design techniques. The process was studied first experimentally under carefully selected. operation conditions, which resembles the ranges employed practically under stable and efficient conditions. Data were collected at steady state conditions using adequate sampling techniques for the dispersed and continuous phases as well as during the transients of the column with the aid of a computer-based online data logging system and online concentration analysis. A stagewise single stage backflow model was improved to mimic the dynamic operation of the column. The developed model accounts for the variation in hydrodynamics, mass transfer, and physical properties throughout the length of the column. End effects were treated by addition of stages at the column entrances. Two parameters were incorporated in the model namely; mass transfer weight factor to correct for the assumption of no mass transfer in the. settling zones at each stage and the backmixing coefficients to handle the axial dispersion phenomena encountered in the course of column operation. The parameters were estimated by minimizing the differences between the experimental and the model predicted concentration profiles at steady state conditions using non-linear optimisation technique. The estimated values were then correlated as functions of operating parameters and were incorporated in·the model equations. The model equations comprise a stiff differential~algebraic system. This system was solved using the GEAR ODE solver. The calculated concentration profiles were compared to those experimentally measured. A very good agreement of the two profiles was achieved within a percent relative error of ±2.S%. The developed rigorous dynamic model of the extraction column was used to derive linear time-invariant reduced-order models that relate the input variables (agitator speed, solvent feed flowrate and concentration, feed concentration and flowrate) to the output variables (raffinate concentration and extract concentration) using the asymptotic method of system identification. The reduced-order models were shown to be accurate in capturing the dynamic behaviour of the process with a maximum modelling prediction error of I %. The simplicity and accuracy of the derived reduced-order models allow for control system design and analysis of such complicated processes. The extraction column is a typical multivariable process with agitator speed and solvent feed flowrate considered as manipulative variables; raffinate concentration and extract concentration as controlled variables and the feeds concentration and feed flowrate as disturbance variables. The control system design of the extraction process was tackled as multi-loop decentralised SISO (Single Input Single Output) as well as centralised MIMO (Multi-Input Multi-Output) system using both conventional and model-based control techniques such as IMC (Internal Model Control) and MPC (Model Predictive Control). Control performance of each control scheme was. studied in terms of stability, speed of response, sensitivity to modelling errors (robustness), setpoint tracking capabilities and load rejection. For decentralised control, multiple loops were assigned to pair.each manipulated variable with each controlled variable according to the interaction analysis and other pairing criteria such as relative gain array (RGA), singular value analysis (SVD). Loops namely Rotor speed-Raffinate concentration and Solvent flowrate Extract concentration showed weak interaction. Multivariable MPC has shown more effective performance compared to other conventional techniques since it accounts for loops interaction, time delays, and input-output variables constraints.

An exploratory study of management accounting and control systems in a developing country

This thesis reports on the results of case studies in four commercial banks in Nigeria. The study focuses how management accounting and control systems (MCS) operate in the four banks. The study is motivated by the dearth of literature on management accounting practices in the developing world in general and in Nigeria in specific. The case study approach adopted in conducting the research was useful in exploring the dynamics of the MCS in the organisations. Data was gathered from two sources. First, semi-structured interviews were conducted with managers at the head office, regional office and branches of each bank. The participants were selected from different backgrounds and managerial levels to provide broader understanding of the operations of the MCS. Second, various internal and external documents were reviewed to provide supporting evidence for the interview results. New institutional sociology (NIS) provided the theoretical framework to understand the results. NIS provided explanations for how the MCS in the four banks were shaped by diverse external and internal factors. The key factors identified as shaping the operations of the MCS were the need to comply with the regulatory environment (coercive isomorphism), the need to maintain social and cultural support (normative isomorphism) and the need to imitate successful organisations in order to appear legitimate (mimetic isomorphism). The study also examines the interplay between the institutional forces, market forces and infra-organisational power relations. This analysis is necessary to overcome the criticism of NIS that it downplays the role of market forces, agency and intra-organisational relations. The findings of the study have implications for understanding the operations of MCS in the developing world.

Deep hole drilling with twist drills: aspects of the CNC process and its real time monitoring and adaptive control

Deep hole drilling is one of the most complicated metal cutting processes and one of the most difficult to perform on CNC machine-tools or machining centres under conditions of limited manpower or unmanned operation. This research work investigates aspects of the deep hole drilling process with small diameter twist drills and presents a prototype system for real time process monitoring and adaptive control; two main research objectives are fulfilled in particular : First objective is the experimental investigation of the mechanics of the deep hole drilling process, using twist drills without internal coolant supply, in the range of diarneters Ø 2.4 to Ø4.5 mm and working length up to 40 diameters. The definition of the problems associated with the low strength of these tools and the study of mechanisms of catastrophic failure which manifest themselves well before and along with the classic mechanism of tool wear. The relationships between drilling thrust and torque with the depth of penetration and the various machining conditions are also investigated and the experimental evidence suggests that the process is inherently unstable at depths beyond a few diameters. Second objective is the design and implementation of a system for intelligent CNC deep hole drilling, the main task of which is to ensure integrity of the process and the safety of the tool and the workpiece. This task is achieved by means of interfacing the CNC system of the machine tool to an external computer which performs the following functions: On-line monitoring of the drilling thrust and torque, adaptive control of feed rate, spindle speed and tool penetration (Z-axis), indirect monitoring of tool wear by pattern recognition of variations of the drilling thrust with cumulative cutting time and drilled depth, operation as a data base for tools and workpieces and finally issuing of alarms and diagnostic messages.

New measures of job control, cognitive demand and production responsibility

Recent research has highlighted several job characteristics salient to employee well-being and behavior for which there are no adequate generally applicable measures. These include timing and method control, monitoring and problem-solving demand, and production responsibility. In this article, an attempt to develop measures of these constructs provided encouraging results. Confirmatory factor analyses applied to data from 2 samples of shop-floor employees showed a consistent fit to a common 5-factor measurement model. Scales corresponding to each of the dimensions showed satisfactory internal and test–retest reliabilities. As expected, the scales also discriminated between employees in different jobs and employees working with contrasting technologies.