...InTouch

 

  

       Issue 8    

 

 

 
  Welcome
 

In 2001, we set out to establish a new, truly unique management consulting firm that focused on meeting the needs of risk management professionals.

It gives me great pleasure to announce that InConsult has now established a specialist recruitment service headed by Stephen Baddeley to meet the special needs of risk professionals, CEO's and CFO's.

InConsult now leads the way as the ONLY consulting firm providing a complete, end-to-end risk management service covering risk management consulting, technology solutions, recruitment and training.

Enjoy this issue of InTouch

Tony Harb

Director, InConsult

 
  Risk Management & Compliance
 

  • Australian companies issuing securities or listed in the USA have been given an extra year to comply with section 404 of the Sarbanes-Oxley Act.

  • Visy has stood down one of its most senior executives as the ACCC continues to investigate alleged price fixing and anti-competitive behaviour.

  • According to a survey by Financial Executives International, US public companies are digging deeper to pay the costs of complying with Section 404 of the Sarbanes-Oxley Act. Total costs for year one Section 404 compliance averaged $4.36 million, up 39%.  The increase is mainly from increasing external costs for consulting and software and an increase in the fees charged by external auditors.

  • 8 petrol distributors and 8 petrol company executives were fined over $23 million for colluding to fix petrol prices between June 1999 and December 2000.

  • The former WorldCom chief executive has been found guilty of fraud.  He was accused of being the mastermind of the $14 billion fraud that forced WorldCom into bankruptcy in 2002.  Unless overturned on appeal, the convictions add up to 85 years (basically a life sentence).

  • Regulators in NSW, South Australia, Queensland and the ACT have rejected $2billion in capital expenditure and more than $200million in operating expenditure demands by electricity distributors.  This effectively increases the risk of power supply shortages.

  • According to accounting experts, companies that cannot explain material changes in their  financial results when new international accounting standards are adopted, will face share price volatility.

  • The federal government is planning to release its draft anti-money laundering bill by April 2005.  The regime will will force banks, accountants, real estate agents, lawyers and casinos to overhaul monitoring and reporting systems to obtain more information from customers and monitor them for suspicious transactions in an attempt to crack down on money laundering and terrorist financing.
    .


 

  Financial Services Brief
 

  • AIG's former chief executive, Maurice "Hank" Greenberg, was forced to step down as non-executive chairman after legal implications of the investigation mounted. Lawyers from AIG told regulators they had uncovered evidence that the insurer might have made false filings with the SEC.

  • Standard & Poor's ratings agency has cut AIG's long-term counterparty credit ratings from AAA to AA-plus. According to S&P, "The number and scope of inappropriate financial transactions ... have diminished Standard & Poor's assessment of management and its internal controls, corporate governance."

    Fitch Ratings has put AIG's AA-plus rating on its "negative watch" list, saying it would downgrade "if material additional items" arose from the company's ongoing review.

  • Two General Reinsurance (Gen Re) executives based in Dublin are under investigations for allegedly being involved in the questionable financial reinsurance deals which helped FAI cover up financial losses.

  • APRA has sent Gen Re a notice in "connection with a potential investigation of Gen Re concerning financial reinsurance".  According to the notice, Gen Re must show cause why an investigation should not be undertaken.

  • A former HIH executive has pleaded guilty to criminal charges relating to his time at the failed insurer.  Charges include, acting with reckless disregard in making a false or misleading statement to the APRA and recklessly failing in his duties as a director.

  • APRA's softer stance on directors tenure could mean that Directors of banks and insurers will not be forced to retire after a set period of time.

  • A former NAB trader has pleaded guilty to 3 charges under the Corporations Act and faces a maximum penalty of five years' jail or a $220,000 fine.

  • THE ASX has fined Merrill Lynch Equities (Australia) $35,000 and ordered the firm to complete an education and compliance program for breaking record-keeping rules.

  • Major banks, insurance representatives and financial planners are lobbying the federal opposition to amend key parts of the Financial Services Reform Act.  They believe the laws are still too inflexible and very costly to consumers.

  • According to reports, the CBA has admitted that it knew nothing about the serious flaws in its internal controls that allowed a bank manager in a small West Australian town to steal about $19million and gamble it away through a betting agency.


 

Corporate Governance, Compliance

and Enterprise Risk Management 

...Made Simple

InConsult Pty Ltd · L12, 35 Pitt Street · Sydney NSW 2000
Tel: (+612) 9241 1344  · Fax: (+612) 9253 3001
© 2005 All rights reserved

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InConsult Sponsor 2005 ERM Conference

 

InConsult is proud to be participant sponsor of the 2005 Enterprise-Wide Risk Management Conference. Click below for more details about the conference.

 

 

 

 

New Contact Details

 

We have now moved!

L12, 35 Pitt St Sydney NSW 2000

Ph:  02 9241 1344

Fax: 02 9253 3001

 

 

Introducing

InConsult Recruitment

 

In line with our strategy to provide a complete range of risk management solutions, InConsult has established a new specialist recruitment service. 

 

InConsult Recruitment is headed by Mr Stephen Baddeley who has extensive recruitment and risk management experience.

 

There is a growing demand for quality risk professionals across many industries for various roles that cover compliance, risk management, insurance, process review, audit and business review. 

 

InConsult's expertise in both risk management and recruitment  will ensure that clients have access to a firm that understands both the strategic and detailed work involved in risk management.

 

 

Managing

Outsourcing Risk

From legal services to IT support and payroll to PR, more organisations are outsourcing their non core activities to specialists. 

Outsourcing can provide access to expertise you don't have, deliver process cost savings and allow you to focus more time on your core business.

However, the key to a successful outsourcing arrangement is to understand and mitigate outsourcing risks.  Lets go through some strategies.

1 Understand the process.  You need to have a thorough understanding of the process you are going to outsource.  This ensures you are realistic about service levels, process cost savings and that no unrealistic expectations exist by both party's . 

2. Define requirements. Ensure you define and clearly communicate your requirements and service levels to the provider.  Have a clear vision of the outsourcing outcomes.

3. Distinguish between material and non material activities. Because managing an outsourcing arrangement is time consuming,  ensure that you devote more time to large and material arrangements.

4. Select the most appropriate provider for the job.   The more material an outsourced activity, the greater the effort devoted to selecting the right provider.  Have a rigid tender selection and evaluation process. 

5.  Have a comprehensive written contract.  A contract is something that must be done diligently to reduce the commercial risk.  A good contract will reflect business requirements and encompass a formal legal framework covering commitment, service level, pricing, responsibilities, review periods, intellectual property, termination methods and dispute resolution.  Be sure to seek the assistance of legal experts. 

6. Establish a sound review process. Don't wait for things to just happen.  Anticipate potential risks and problems and put processes in place to deal with them.  Have a proactive and structured process to periodically review the outsourcing arrangement at strategic, tactical and operational levels. 

7. Ensure the service provider can grow with you. Don't just focus on your current needs.  When selecting a service provider, ensure they can change with your future needs so that you can change to meet the needs of your customers and outwit competitors.

© InConsult Pty Ltd

 

Coming Soon

> How to prepare for a new  enterprise risk management system.

> What to look for when selecting your new enterprise risk management system.