Quality improvement through the computerized internal control review (CICR) system.

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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.

Internal control reporting by non-accelerated filers

I examine three issues related to internal control reporting by non-accelerated filers. Motivation for the three studies comes from the fact that Section 404 of the Sarbanes-Oxley Act (SOX) continues to be controversial, as evidenced by the permanent exemption from Section 404(b) of SOX granted to non-accelerated filers by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Dodd-Frank Act also requires the SEC to study compliance costs associated with smaller accelerated filers. In the first part of my dissertation, I document that the audit fee premium for non-accelerated filers disclosing a material weakness in internal controls (a) is significantly lower than the corresponding premium for accelerated filers, and (b) declines significantly over time. I also find that in the case of accelerated filers remediating clients pay lower fees compared to clients continuing to report internal control problems; however, such differences are not observed in the case of non-accelerated filers. The second essay focuses on audit report lag. The results indicate that presence of material weaknesses are associated with increased audit report lags, for both accelerated and non-accelerated filers. The results also indicate that the decline in report lag following remediation of problems is greater for accelerated filers than for non-accelerated filers. The third essay examines early warnings (pursuant to Section 302 disclosures) for firms that subsequently disclosed internal control problems in their 404 reports. The analyses indicate that non-accelerated firms with shorter CFO tenure, presence of accounting experts on the audit committee, and more frequent audit committee meetings are more likely to provide prior Section 302 warnings. Overall the results suggest that there are differences in internal control reporting between the accelerated and non-accelerated filers. The results provide empirical grounding for the ongoing debate about internal control reporting by non-accelerated filers.

Internal Control application : Empirical evidence from Sweden

Aim The aim of this study is to explore based on internationally recognised frameworks: 1. how internal control structures are applied in Sweden among different sectors; 2. how organizational size and environment affect internal control structures; and 3. the impact of internal control structures on organizational performance. Methods A quantitative method was used in the data collection and analysis. The sample consisted of 1117 organizations operating in Sweden. A mean analysis was conducted to measure the level of internal control structures among different industries, organizational sizes, and different choices of listing in the stock exchange market. Person’s correlation analysis was then used to explore possible correlations between external environmental factors and internal control structures, and internal control structures and organizational performance. Lastly, a structural model was built to measure the impact of internal control structures on organizational performance. The measurements of internal control structures and organizational performance are based on COSO framework’s principles and objectives. Results This study gives an insight on how internal control structures are applied across industrial sectors in Sweden, with financial institutions and manufacturing organizations having notably higher levels of internal control structures. Additionally, it provides evidence of the impact external environmental factors have on internal control structures. Furthermore, it shows that organizations that are listed in the Swedish stock exchange market have an equivalent level of internal control structures to those registered in the American stock exchange market. In contrast, organisations that are not listed in the stock exchange market have a notably lower level of internal control structures. Lastly, it illustrates the positive impact the presence of internal control structures has on organizational performance. 3 | P a g e Conclusion The results highlight a crucial role the supervisory authority Finansinspektionen (FI) has in regulating the Swedish financial market. They also show that the stability of the Swedish business environment has had a positive impact on the level of internal control structures.

Modeling control objectives for business process compliance

Business process design is primarily driven by process improvement objectives. However, the role of control objectives stemming from regulations and standards is becoming increasingly important for businesses in light of recent events that led to some of the largest scandals in corporate history. As organizations strive to meet compliance agendas, there is an evident need to provide systematic approaches that assist in the understanding of the interplay between (often conflicting) business and control objectives during business process design. In this paper, our objective is twofold. We will firstly present a research agenda in the space of business process compliance, identifying major technical and organizational challenges. We then tackle a part of the overall problem space, which deals with the effective modeling of control objectives and subsequently their propagation onto business process models. Control objective modeling is proposed through a specialized modal logic based on normative systems theory, and the visualization of control objectives on business process models is achieved procedurally. The proposed approach is demonstrated in the context of a purchase-to-pay scenario.

Quantifying ChIP-seq data: a spiking method providing an internal reference for sample-to-sample normalization.

Chromatin immunoprecipitation followed by deep sequencing (ChIP-seq) experiments are widely used to determine, within entire genomes, the occupancy sites of any protein of interest, including, for example, transcription factors, RNA polymerases, or histones with or without various modifications. In addition to allowing the determination of occupancy sites within one cell type and under one condition, this method allows, in principle, the establishment and comparison of occupancy maps in various cell types, tissues, and conditions. Such comparisons require, however, that samples be normalized. Widely used normalization methods that include a quantile normalization step perform well when factor occupancy varies at a subset of sites, but may miss uniform genome-wide increases or decreases in site occupancy. We describe a spike adjustment procedure (SAP) that, unlike commonly used normalization methods intervening at the analysis stage, entails an experimental step prior to immunoprecipitation. A constant, low amount from a single batch of chromatin of a foreign genome is added to the experimental chromatin. This "spike" chromatin then serves as an internal control to which the experimental signals can be adjusted. We show that the method improves similarity between replicates and reveals biological differences including global and largely uniform changes.

Is accountability a double-edged sword? Experimental evidence on the effectiveness of internal controls to prevent fraud

Recent legislations oblige organizations to monitor the effectiveness of internal control mechanisms that are necessary to prevent fraud. However, little is known about the effectiveness of different internal controls. We investigate whether the duty to sign work results-one of the most prominent internal control mechanisms-is effective to prevent fraud under different superior instructions. We use a 2×2 between-subjects experimental design with accountability (duty to sign work results vs. no duty to sign) and superior instructions (with vs. without profit maximization cue) as independent variables. Both manipulations of superior instructions reminded people to respect accounting standards and principles but in one condition, an instruction to increase revenues was integrated as profit maximization cue. We expected this cue to trigger a profit maximization decision frame that increases the likelihood for fraudulent revenue recording. 58 managers from an executive MBA class participated in the experiment. We find that superior instructions interact with accountability. Fraudulent revenue recording was particularly observed when people received instructions to increase revenues and had to sign their work results. Consequently, fraudulent behavior can occur without pressure to commit fraud due to profit maximization cues that are communicated by a superior and despite implemented internal control mechanisms. We discuss possible implications of our results for the prevention of fraudulent behavior.

A Confluence of Risks: Control and Compliance in the World of Unstructured Data, Big Data and the Cloud

The emergence of powerful new technologies, the existence of large quantities of data, and increasing demands for the extraction of added value from these technologies and data have created a number of significant challenges for those charged with both corporate and information technology management. The possibilities are great, the expectations high, and the risks significant. Organisations seeking to employ cloud technologies and exploit the value of the data to which they have access, be this in the form of "Big Data" available from different external sources or data held within the organisation, in structured or unstructured formats, need to understand the risks involved in such activities. Data owners have responsibilities towards the subjects of the data and must also, frequently, demonstrate that they are in compliance with current standards, laws and regulations. This thesis sets out to explore the nature of the technologies that organisations might utilise, identify the most pertinent constraints and risks, and propose a framework for the management of data from discovery to external hosting that will allow the most significant risks to be managed through the definition, implementation, and performance of appropriate internal control activities.

Executive control in bilinguals: a concise review on fMRI studies

The investigation of bilingualism and cognition has been enriched by recent developments in functional magnetic resonance imaging (fMRI). Extending how bilingual experience shapes cognition, this review examines recent fMRI studies adopting executive control tasks with minimal or no linguistic demands. Across a range of studies with divergent ages and language pairs spoken by bilinguals, brain regions supporting executive control significantly overlap with brain regions recruited for language control (Abutalebi & Green, this issue). Furthermore, limited but emerging studies on resting-state networks are addressed, which suggest more coherent spatially distributed functional connectivity in bilinguals. Given the dynamic nature of bilingual experience, it is essential to consider both task-related functional networks (externally-driven engagement), and resting-state networks, such as default mode network (internal control). Both types of networks are important elements of bilingual language control, which relies on domain-general executive control.

Validation of a reference control for an SYBR-Green fluorescence assay-based real-time PCR for detection of bovine herpesvirus 5 in experimentally exposed bovine embryos

The objective of this study was to optimize an internal control to improve SYBR-Green-based qPCR to amplify/detect the BoHV-5 US9 gene in bovine embryos produced invitro and experimentally exposed to the virus. We designed an SYBR-Green-based binding assay that is quick to perform, reliable, easily optimized and compares well with the published assay. Herein we demonstrated its general applicability to detect BoHV-5 US9 gene in bovine embryos produced invitro experimentally exposed to BoHV-5. In order to validate the assay, three different reference genes were tested; and the histone 2a gene was shown to be the most adequate for normalizing the qPCR reaction, by considering melting and standard curves ( p<0.05). On the other hand, no differences were found in the development of bovine embryos invitro whether they were exposed to BoHV-5 reference and field strains comparing to unexposed embryos. The developed qPCR assay may have important field applications as it provides an accurate BoHV-5 US9 gene detection using a proven reference gene and is considerably less expensive than the TaqMan qPCR currently employed in sanitary programs. © 2013 Elsevier Ltd.

Health control beliefs in old age - relationship with subjective and objective health and health behavior

The main purpose of this paper is to explore health control beliefs (internality, powerful others, chance) in different age cohorts of elderly people and to examine the relationship between health control beliefs and objective and subjective health, and health behaviour. This contribution shows data from an interdisciplinary longitudinal ageing study: (a) a descriptive analysis of age- and time-correlated changes in health control beliefs of different cohorts of elderly people by taking into account gender as a differential aspect; (b) group comparisons between objectively and subjectively healthy or sick people and their health control beliefs and health relevant behaviour. Participants are 442 community elderly, 309 men, 133 women, aged 65± 94 years (mean age: 74.95 years). Our data demonstrate the dominance of chance control beliefs over internality and powerful others in all age cohorts. It can be concluded that internal control remains stable well into old age, whereas a signi® cant age-correlated increase of externality can be observed. Our results show the signi® cant relationship of subjective health self-evaluations with health control beliefs and health behaviour which is not the case for objective health parameters. Strong gender effects are found for internality and social externality: women have signi® cantly lower internality and powerful others scores than men.

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.

Standardized environmental management systems as an internal management tool

In a principal-agent model we analyze the firm’s decision to adopt an informal or a standardized Environmental Management System (EMS). Our results are consistent with empirical evidence in several respects. A standardized EMS increases the internal control at the cost of introducing some degree of rigidity that entails an endogenous setup cost. Standardized systems are more prone to be adopted by big and well established firms and under tougher environmental policies. Firms with standardized EMS tend to devote more effort to abatement although this effort results in lower pollution only if public incentives are strong enough, suggesting a complementarity relationship between standardized EMS and public policies. Emission charges have both a marginal effect on abatement and a qualitative effect on the adoption decision that may induce a conflict between private and public interests. As a result of the combination of these two effects it can be optimal for the government to distort the tax in a specific way in order to push the firm to choose the socially optimal EMS. The introduction of standardized systems can result in win-win situations where firms, society and the environment get better off.