As The Wall Street Journal reports, Northwest & Ethical Investments – RIM's top shareholder – urged the mobile company to review its policies last year. The publication found that the unusual management structure may be to blame for some of the corporation's recent failures and suggests they split the roles.

"While the Committee is comfortable that our lead director has performed the appropriate governance functions expected of that position up to the present, the Committee recommends that RIM should separate the roles of chair and CEO and amend the board mandate accordingly," the Journal quotes the review as saying.

Of course, the report is largely moot as co-CEOs Jim Balsillie and Mike Lazaridis stepped down anyways at the end of January due to the recent struggles of the company. Many critics agree that stricter corporate governance could have prevented RIM's recent fall from grace.

The nine-page audit was released to the Missouri News-Leader last week, and discovered the band program's practices and procedures were not followed properly in regards to the fall 2010 and spring 2011 terms. While no funds were missing, there were a number of areas where the organization lost out on opportunities.

"In 2010-2011, the program failed to charge all members of the Pride Marching Band the band activities fees of $335. The fees… cover the cost of the band camp, including housing, meals, clothing and travel," the source notes. "If correctly assessed, the fees would have raised $93,600. Instead, the university collected $88,240."

For educational institutions, improper procedures can cost thousands of dollars. For example, a recent audit of Georgia-based Kennesaw State University found weak protocols cost the university nearly $70,000.

According to the Committee of Sponsoring Organizations of the Treadway Commission – a group of five private sector companies aimed to provide leadership guidance – corporations must consider its risk appetite while it decides which goals to pursue. This is a three step process, which involves developing risk appetite, communicating it and then monitoring and updating it, the COSO report notes.

"As an organization decides on its objectives and its approach to achieving strategic goals, it should consider the risks involved, and its appetite for such risks, as a basis
for making those important decisions," the committee suggests.

To that end, it may be worth the time to reconsider risk management programs. The start of a new year presents new challenges, and more efficient risk assessment software can help better identify potential issues in advance.

Financial stress, operation change in organizations and the ever-looming threat of a double-dip recession may change how some people perceive their employers and jobs, making them more likely to engage in fraudulent behaviors. This translates into major risks for financial institutions, KPMG suggests

"It's highly likely that fraud, especially the internal threat, is going to continue to increase as economic pressures increase over the coming year," Hitesh Patel, a partner at KPMG, told the news source. "The possibility of a double-dip recession is likely to put further strain on households, driving more people to turn to fraud … to make ends meet."

With many companies just now beginning to recover from the 2008 recession, it's crucial they monitor internal activities. Fraud could further damage their relationships with investors and shareholders, not to mention their bottom lines.

Reports of bedbugs in Stonequist Aparments were the first sign that something may be wrong with the authority's financial budget and practices. There are several other concerns as well, including salary, compensation, travel and business expenses, as well as claims of nepotism, Mayor Scott Johnson told the Times Union.

Al Calluci, a city resident and a critic of the authority, was also included into the organization's seven-member board.

"Quite honestly, I don't know what the oversight has been. Absolutely, the state has to be involved," Calluci told the news source, referencing the U.S. Department of Housing and Urban Development.

HUD is a cabinet department formed in 1965 for the explicit purpose of developing and executing policies to support housing in metropolises. It is supposed to prevent buildings and properties under its control from becoming decrepit and uninhabitable.

The two-year review will cover all financial transactions, while transactions between shareholders from the past three years will be audited as a part of the initiative. The financial audit is tentatively scheduled to be completed within the first quarter, which will enable the company to complete a Form S-1 filing with the SEC.

"Bringing integrity and confidence in our financial reporting and financial processes is a critical action our company must take," said David McGee, CEO of Ronn Motor Company. "We believe the team we've assembled will conduct this audit process in a professional and efficient manner and further positions us toward being a 'Reporting Company' – a key objective for us."

The review should improve corporate governance and establish greater confidence among shareholders. After the economic collapse, many companies lost the trust of their investors, so performing audits and enhancing governance can help organizations reconnect with these individuals.

CLICK HERE to view the  GRC Cloud 6.0 Release Webinar

CLICK HERE to view the GRC Cloud 6.0 Release Webinar slide deck.

CLICK HERE to view the GRC Cloud 6.0 Release Notes.

GRC Cloud 6 introduces a new way for people to work together on your GRC program. The new configurable workflow engine enables you to completely and efficiently manage your Risk and Compliance processes.

Keeping track of the status of all work within your GRC programs through enhanced reporting. By introducing automated workflows to your GRC Cloud site you can solve many issues that trouble GRC professionals.

• Ensuring people know the work they are responsible to complete—and their deadlines—with automated messaging and outstanding task views.
• Achieving greater enterprise-wide buy-in by simplifying tasks and reducing training and oversight requirements.
• Ensuring people in the program follow the correct business processes
• Ensuring the proper hand offs happen at the right time.

GRC Cloud’s workflow builder enables you to build business processes where information is entered by different people in a pre-defined sequence. Each person’s view of the item is tailored to provide just the information they need at that time to complete their task. As each task is completed the next person in the workflow is alerted by e-mail they have work to do. The home page dashboard also advises each user of their current tasks. Other managers who need to know an item’s status can also receive customized alerts. For more details on the value workflow provides, please view our GRC Cloud Workflow Overview presentation.

CLICK HERE to view the  GRC Cloud 6.0 Release Webinar

CLICK HERE to view the GRC Cloud 6.0 Release Webinar slide deck.

CLICK HERE to view the GRC Cloud 6.0 Release Notes.

According to a recent survey conducted by Zurich Financial Services Group, approximately two-thirds of the executives surveyed said risk identification has become paramount over the past three years. Despite the growing importance of risk assessment, only one in 10 thought their management was effective in the creation of a risk-aware culture.

Additionally, many respondents believed it was crucial to link risk information to strategic decision making, but only 14 percent said their companies actually did that in an effective manner.

"There is no doubt that in today's challenging environment customers, shareholders and employees expect clear commitment to comprehensive and forward-looking risk management from top management and board," said Axel Lehmann, chief risk officer at Zurich.

IndustryWeek recently suggested assigning a corporate "risk champion." This individual would work toward achieving better risk awareness throughout the company and getting each department to work together to create a comprehensive risk strategy.

As IndustryWeek notes, various studies show the inefficiency of which risk governance is carried out. Seven percent of company revenue is devoted to risk identification and governance, but few firms work together to tackle these key issues and the matter tends to get pushed to the lowest levels of the organization.

David Young, senior vice president of insurance firm Willis, suggests appointing risk champions who will take control of the issue.

"Ignorance has never been a defense of the law. You should have known," Young told the news source.

Conversely, however, businesses shouldn't relegate all the responsibility on a certain person – there is a difference between having an individual take care of risk assessment and a person who will motivate others to address it. The risk champion should rally everyone else together to tackle the issue.

Firms with senior management and boards that do not support compliance will be under the most pressure from the SEC, director Carlo di Florio explained at the recent 2012 Compliance Outreach Program National Seminar. Board members, chief risk officers, management, internal auditors and business unit leaders all need to contribute to ensure their companies are adhering to compliance standards.

"[By] engaging senior management and the board at various points in the examination process, our goal is to elevate the role of compliance," AdvisorOne quotes di Florio as saying. "Strong risk identification controls, including a solid compliance program, are a key responsibility of everyone in a regulated entity, but the right culture and tone at the top are especially the responsibility of senior management and the board."

The management of risk and compliance has become even more crucial as treasurers and financial officers investigate new means of returning to the black.

Data is the primary obstacle in that regard. Though some progress has been made to improve operational loss data, issues such as completeness, collection thresholds, dates and natural scarcity still prevent operational risk assessments from being as cut-and-dry as many financial institutions would like.

"For several important operational risk types, the lag that exists between a macroeconomic event and the losses can be many years, well beyond the scope of the exercise proposed by the regulators. One example is litigation losses (mostly under the ‘clients, products and business practices' risk type)," Cruz writes tor Risk.net.

With that in mind, transparency can also help ease relationships with investors. Corporations shouldn't try to hide risks or downplay them. Being straightforward is the best way to bolster confidence.

As RiskCenter notes, however, embarking on new objectives such as globalization opens corporations up to new risk. Some are obvious – like the tip of an iceberg – while others are less so – like the submerged core of the iceberg. Being able to perform risk identification for both types of dangers is crucial.

"While every business prepares elaborately for perceptible issues, few businesses take the initiative to develop an awareness and sensitivity to all that lies below, hidden from view, and waiting to cause chaos," the news source explains. "People don't know what they don't know. Worse yet, no one can plan for something that has never been anticipated."

In that regard, it's crucial that corporations use the most up-to-date risk workshop software to help prepare for all the possible scenarios.

The improvements would cost approximately $40 million to carry out and create approximately 400 to 600 yearlong jobs, the Bend Bulletin reports. Once the improvements are done, they would save local schools nearly $4 million a year. Moreover, the state would be able to pay for most of the renovations through low-interest loans.

However, school boards are skeptical of the savings, especially when considering the fact that planned improvements would require them to take on additional debt in a rocky economic climate.

"Quite frankly, it didn’t tell us anything more than we already knew," Gary Heldt, an engineer for Eugene School District, told the news source in regards to the recent audit.

With more organizations looking to save money, internal audit software can be a valuable asset. Running these reviews regularly can help determine how various policies and procedures may affect the bottom line.

"Effective enterprise risk management hinges on other dimensions as well, including organizational culture, behavior, ethics and change management … all the squishy, human stuff that defies convenient categorization in COSO cubes and other traditional risk management frameworks," business expert Eric Krell explains.

In the past few years, the corporations that have succumbed are the ones with limited views of risk indicators and management. Organizations such as MF Global were unable to survive because they didn't innovate with their risk management strategies and subsequent changes to their assessment programs didn't provide adequate results.

Financial officers need to arm themselves with the tools to properly manage their policies. Risk assessment software is paramount to this process.

Interim city manager Dan Stanley recently conducted an audit to determine where all the funding went. As it turns out, none of the health insurance funds were misappropriated, as some outraged workers had assumed. The report will be made available to the city council in the beginning of February.

"I will be sending that out to the council early next week," The Topeka Capital-Journal reports Stanley as saying. "But, in short, it was found that no funds were misappropriated from the fund for any other purpose than health insurance/fund-related expenses."

Several measures were taken to prevent the bottoming out of the fund, such as a one-time emergency infusion of $1 million earlier this year.

Internal audits can help organizations figure out where they went wrong and avoid making those mistakes again in the future. These reviews should be performed regularly and with the most up-to-date internal audit software.

The organization was asked to reassess its current legal and financial status after it received an eviction notice by its current landlord, the Inman Park United Methodist Church.

"There have been a number of missed monthly payments and we finally decided to work with a lawyer," Rev. Matt Nelson told GA Voice on Thursday. "A [letter] of demand for payment and notice of default … was initially served on Jan. 12."

In December, YouthPride board chairman Jordan Myers announced the company needed $40,000 to get current on debts or else it would face closure within 60 days. Now, the organization is being audited to determine whether it can continue to stay open and at least continue offering its services to troubled youth.

An internal audit task force can be leveraged to identify financial issues long beforehand, provided it is equipped with proper internal audit software.

While the city isn't ready to discuss the specifics of the audit yet, the summary was carried out by an internal audit branch of Metro Vancouver, which recently made moves to improve the water quality system. The audit was not required by law, with auditors stressing the inquiry was performed as a means to show the city's commitment to the plan.

"The new system is based on Ontario’s water standards that were passed as a result of the 2000 Walkerton tragedy when the Ontario town’s water supply was contaminated by E. coli bacteria and seven people died. It is also similar to management systems from the International Standards Organization," the Vancouver Courier reports.

When corporations and other organizations discuss new policies, it's always wise to have them reviewed for potential deficiencies. Through proper use of internal audit software, companies can double-check the efficiency of these new procedures.

According to the audit, CardioComm Solutions has well implemented management reviews, resource planning processes and corrective action loops. In conclusion, all the requirements of applicable ISO standards and Canadian regulatory requirement have been fulfilled and the firm's quality systems are well-established.

"This is excellent news for CardioComm Solutions," stated Etienne Grima, CardioComm Solutions' CEO, "especially in light of the rally in our stock price and brisk trading. The recent market response provides a clear signal that our shareholders … understand the significance of the FDA's permission to sell the HeartCheck with our GEMS software."

The medical industry is full of various regulations, so organizations need to stay on top of their policies and procedures to ensure they don't take any missteps.

The 2012 AFP Risk Management Survey asked chief financial officers, corporate treasurers and other key executives about the risks that impacted their earnings the most, and they all named the ones that are likely to cause the most uncertainty. Now, these companies are looking to risk identification to help mitigate these factors.

"Uncertainty is here to stay," said Jim Kaitz, AFP's president and CEO. "One way organizations can take control of rising uncertainty in their earnings is by adopting a new mindset and making more risk-adjusted decisions.  The ones that do this effectively will have a competitive advantage."

Risk assessment software is a key tool for businesses looking to prevent these issues from becoming a problem in the first place.

New standards were put into effect that clarified the troubled debt restructurings. A number of TDR disclosures related to credit quality and allowance for credit losses were made effective for the first time during this time frame. Additional disclosures about the items measured at fair value, namely more sensitive information, were also provided.

"New guidance clarifies which types of costs incurred by insurance companies can be capitalized (DAC) in the acquisition of new and renewal contracts," the report notes. "The FASB continues to re-debate issues on how financial instruments are classified and measured and is working with the IASB to come to a global answer for how to calculate credit losses at financial institutions."

It's crucial for corporations to keep up-to-date on any new standards within their industry so they can operate at maximum efficiency.

While the core of their job – providing independent assurance of function – remains unchanged, many internal auditors are now working more closely with businesses to make their reports more relevant to these companies. The news source cites internal audit's increasing focus on accessing the effectiveness of risk management processes as evidence of this.

"For many audit departments the use of analytic technology progresses from ad hoc testing of transactions in support of a given audit objective, through to automated control testing routines and then evolving to regularly scheduled continuous auditing. This increases the efficiency and effectiveness of the audit process and also provides timely identification of errors, fraud and control weaknesses," Business Finance Magazine notes.

Corporations may want to consider upgrading their internal audit software to keep up with the changing responsibility of the position if they want to maximize efficiency.

CLICK HERE to view the  GRC Cloud 6.0 Release Webinar

CLICK HERE to view the GRC Cloud 6.0 Release Webinar slide deck.

CLICK HERE to view the GRC Cloud 6.0 Release Notes.

GRC Cloud 6 introduces a new way for people to work together on your GRC program. The new configurable workflow engine enables you to completely and efficiently manage your Risk and Compliance processes.

Keeping track of the status of all work within your GRC programs through enhanced reporting. By introducing automated workflows to your GRC Cloud site you can solve many issues that trouble GRC professionals.

• Ensuring people know the work they are responsible to complete—and their deadlines—with automated messaging and outstanding task views.
• Achieving greater enterprise-wide buy-in by simplifying tasks and reducing training and oversight requirements.
• Ensuring people in the program follow the correct business processes
• Ensuring the proper hand offs happen at the right time.

GRC Cloud’s workflow builder enables you to build business processes where information is entered by different people in a pre-defined sequence. Each person’s view of the item is tailored to provide just the information they need at that time to complete their task. As each task is completed the next person in the workflow is alerted by e-mail they have work to do. The home page dashboard also advises each user of their current tasks. Other managers who need to know an item’s status can also receive customized alerts. For more details on the value workflow provides, please view our GRC Cloud Workflow Overview presentation.

CLICK HERE to view the  GRC Cloud 6.0 Release Webinar

CLICK HERE to view the GRC Cloud 6.0 Release Webinar slide deck.

CLICK HERE to view the GRC Cloud 6.0 Release Notes.

The improvements cover a variety of different policies. Beginning with the 2012 annual meeting, shareholders will be able to vote on executive compensation. The corporation's existing majority voting policy has also been modified to clarify that resignation delivered by a director who receives more "withhold" votes than "for" votes will be accepted. Stock options will no longer be provided to independent directors either.

"The changes adopted today underscore that the Board continues to be responsive to, and is fully aligned with, shareholder interests," said Magna Chairman Michael Harris. "Since the completion of the plan of arrangement in August 2010, the Board has implemented a number of enhancements to its corporate governance practices while continuing to emphasize the key operating principles."

After the economic recession, many shareholders lost faith in their companies. GRC software may help organizations employ better corporate governance policies and win their confidence back.

According to its 2012 Supplier Progress report, the company will be performing "rigorous audits" with a panel of independent experts in order to assess the working standards at suppliers, manufacturers and assemblers. If these working condition standards are not met, the iPod maker will cease relationships with the offender.

"We continue to expand our program to reach deeper into our supply base, and this year we also added more detailed and specialized audits to address safety and environmental concerns," the Apple report states.

Foxconn, a supplier of Apple products, was lambasted in late 2010 when 18 workers attempted suicide by jumping off the roof of its Taiwain factory because of poor working conditions. The incident gained international attention and spawned several documentaries critical of Apple and the other brands that were clients of Foxconn.

The new audit ostracizes the NYRA for not making changes outlined in two previous internal audits after the organization emerged from bankruptcy. If it weren't for the new Resorts World New York, the NYRA would have a deficit of nearly $20 million from its racing operations this year, nearly double from its $11.5 million deficit last year.

"NYRA may have even less incentive to be attentive to cost savings initiatives as its financial condition improves with the influx of VLT (video lottery terminal) revenues," the news source notes, citing the report. 2012 net revenue for 2012 is expected to increase by $48 million due to new gaming operations.

With many organizations looking to add new streams of revenue this year, its crucial they don't let other practices fall by the wayside. There are always ways to lose out on potential revenue so companies should make use of internal audit software to ensure they aren't letting anything slip through their fingers.

Carnival, the parent company of Costa Concordia, said the tragedy has forced the corporation to question its procedures, despite the safety record over the past few years. The review is being carried out by Captain James Hunn, a retired U.S. Navy Captain. The Health, Environment, Safety & Security Committee is also looking into new emergency response training and procedures.

"This tragedy has called into question our company's safety and emergency response procedures and practices," said Micky Arison, chairman and CEO of Carnival Corporation. "While I have every confidence in the safety of our vessels and the professionalism of our crews, this review will evaluate all practices and procedures to make sure that this kind of accident doesn't happen again."

Corporations should aim to conduct reviews and audits before crises happen to avoid them becoming issues in the first place.

For example, OmniTouch recently developed a wearable multitouch solution that can be broadcast and interacted with on any solid surface. Executives could display keyboards on an airplane tray table to write documents and emails or use the systems to take notes on pamphlets and material they are reading in their hands.

As the Internal Institute of Auditors explains, it's crucial that corporations develop policies to manage the use of new technology before they become potential risks.

"Is your organization taking advantage of the new technology to improve its products and services, the efficiency of business processes, and the quality of risk and performance information that drives business decisions?" the website asks. "Are your risk management and internal audit proactively engaged as advisors … to help pilot management?"

With the new year underway, this is the perfect time for corporations to reconsider risk indicators, governance and other critical policy matters.

According to the review, Catango Corporation, the owner and operator of the horse stable, owes the department upward of $100,000 in penalties for allowing unauthorized horses to stay for free. The audit, which examined the two-year period between July1, 2007 and June 30, 2009, found other violations were made as well.

"Among the horses that are allowed to stay at the stable for free are those owned by Ashley Nicoll-Holzer. Ms. Holzer is the wife of stable operator Rusty Holzer and a Canadian Olympic rider. Other horses, including those owned by Parks and those used for lessons, also stay for free," the Riverdale Press reports.

Rather than paying the penalties outright, the organization was allowed to make capital improvements, starting with the repaving of the parking lot and driveway leading to the Equestrian Center.

It's crucial that organizations take a look at their policies often to avoid getting themselves into potential legal trouble.

Should real-time trading be taken care of in-house, IID could save approximately $9 million per year. To hire a fulltime in-house staff that is able to achieve the same effect, it would cost only $810,000. Some of its contracts are currently handled by Coral Energy, a subsidiary of Shell Oil, the Imperial Valley Press reports.

"This is great," Matt Dessert, vice president of the IID board, told the news source. "It's going to create jobs in Imperial County that are now being outsourced to Coral, and it's going to save us at least $5 million (conservative total saving totals minus new expenses)."

At a time when many companies are focused on conserving money, internal audit software can be crucial to identifying trouble areas and potential savings.

Some firms are very incompetent, and PwC suggests they should be more innovative and agile when seeking out risk indicators. By updating archaic practices and integrating new technological solutions, they would be better able to identify potential risks to their well being, such as tsunamis or oil spills.

"The risk landscape is changing, and established risk management approaches need to be updated to keep pace," Richard Sykes, a partner at PwC's governance, risk and compliance division, told BDaily. "Many organizations currently have the wrong focus. They major on financial and operational risks and crucially regard risk and strategy as separate rather than seeing risk-taking as a key source of value creation."

Implementing new policies and updated technology, such as risk assessment software, is crucial to achieving up-to-date risk management processes.

Conducted in June, the internal audit focused on MLGW's Plus-1 program, which encouraged customers to donate $1 dollar through their utility bills. The money was used to benefit the Metropolitan Inter-Faith Association, which distributes the funds to people who struggle to pay their utility bills as a result of recent unemployment.

"Records showed that payments to MIFA were sometimes made months after the money arrived at MLGW, and that multiple months were paid at one time. Managers agreed they needed to make the payments faster," the news source notes. "No one area or person was assigned to monitor the program and no formalized procedures were in place."

This instance highlights the importance of utilizing internal audit software to discover policies that are not being carried out efficiently. Once identified, corporations can then make the necessary judgments, as MLGW did.

Travel and resort fees were covered by AmeriBen/IEC Group, the organization which is in charge of processing employee benefit claims for the county. Every six months, administrators were offered travel for two people with free meals and three nights of lodging.

"The trio contended they didn't violate the county's gift policy because training was involved," the news source notes. "But auditors said the appearance of conflict with a vendor may be just as damaging to the county’s reputation as an actual conflict."

Among AmeriBen/IEC Group's other clients are several American-Indian tribes and the Tucson Unified School District.

Earning the trust of investors and other supporters is crucial, which makes gaffs such as this one potentially damaging. Internal audit software can help organizations identify these policy violations in advance.

In November, Olympus came clean after admitting it had used approximately $1.7 billion to cover losses made in the 90s and that the company's accounting practices were "not appropriate," making it one of the largest and longest-running corporate coverups in Japanese history.

Ernst & Young hasn't found any problems so far with the auditor's examination of accounts at Olympus. However, the organization was quick to note that its final report – which was scheduled for release in February – may be delayed even further due to the ongoing police investigation.

"The camera maker will decide whether to sue its corporate and accounting auditors by Jan. 17, the deadline for filing a lawsuit," Bloomberg Businessweek reports.

The lack of transparency has had a major impact on the corporation's stock, which plunged 59 percent last year as the scandal was first uncovered. This highlights the importance of transparency when dealing with accounting issues and using GRC software to prevent such issues from arising.

Financial Executives International recently released a new paper that touched on this subject, offering some advice for companies trying to stay ahead of the game. It's crucial that corporations understand and evaluate the facts of transactions, determine the boundaries and consider relevant accounting guidance.

"Having a robust process to make good accounting judgments is the responsibility of management," the paper notes. "However, that process should include steps to assess transactions to determine which are significant and warrant additional consideration compared to those that are more typical and are addressed through a company's routine internal control processes."

The modern business climate also requires corporations to be more observant of risk indicators, as they could quickly turn into major problems.

Bruce Blasnik, a member of the auditing team that performed the review at the end of 2011, cited lack of management at the sewage treatment plan as being the most serious level of risk. The issue was brought up to the board multiple times over the course of fiscal 2010 and 2011, but little was done to correct it.

"Material weakness – we don't take that term lightly," Blasnik told the news source. "And it wasn't just one error or one problem that we noted. It was a number of errors that accumulated throughout the audit process and generally caused us to conclude that there's a lack of oversight and lack of accountability in the organization."

Deficiencies such as material weakness can lead to a high level of financial risk. Organizations need to have an internal audit software program in place to avoid these potential issues.

As the news source notes, when forward-looking statements are issued alongside potential risk indicators and factors, they can reasonably come to the conclusion that a company is being truthful and honest. It's all about transparency – by being up front with investors, corporations can command their respect.

"Risk factors deserve particular attention these days because good disclosure that is the product of a careful process also can facilitate easier access to rocky … capital markets. In uncertain times, increasingly risk-averse investment banks give greater scrutiny to … reports that may not have received intense outside scrutiny since a company's IPO," CFO.com explains.

Risk assessment software can help businesses better identify these various factors and aid a corporation's quest for greater transparency.

Unsurprisingly, many experts in the field are experimenting with altogether new strategies for measuring risk. Vikram Prandit, for example, recently suggested an alternative way for banks to better assess risk that involves having regulators create a benchmark portfolio that would require all financial institutions to measure against that.

"Institutions would be required to produce, on a quarterly basis for that benchmark portfolio, a hypothetical loan/loss reserve level, value at risk, stress-test results and risk-weighted assets," Prandit writes for the news source. "Right now these measures are run only against an institution’s actual portfolio and only a limited number of the results are disclosed."

Poor risk identification strategies can lead to the demise of a company, which is what happened to Wisconsin-based Legacy Bank. A recent report from the Federal Reserve suggests company practices were corrupt in a number of ways, from misleading customers to poor bookkeeping.

After the economic collapse caused many investors' confidence to waver, auditors are now squarely in charge of restoring that trust. Audit quality is paramount to achieving that goal, the Public Company Accounting Oversight Board chairman James Doty explained at the conference.

"We are experiencing extraordinarily challenging times, [with] change driven by external events and circumstances as well as change inside the profession. [The] financial audit is the linchpin for restoring confidence," Doty said, as relayed by a Deloitte report.

Other speakers urged auditors to strengthen their oversight capabilities and performance over the course of the next 12 months.

One of the many ways corporations may be able to accomplish this goal is by implementing and enhancing their use of internal audit software to better evaluate company policies and procedures.

Pinnacle Airlines is in the middle of a restructure that has affected a number of its employees – former managers even asked unions to take 5 percent wage cuts. However, the corporation's top five executives earned more than $4 million combined last year, approximately 35 percent of the company's $12.7 million in net income.

Eleanor Bloxham, CEO of the Corporate Governance Alliance, believes the managers are being paid way too much, especially considering what the company is going through.

"It was way out of line to what the company was able to generate (in profits), and it's way out of line because apparently that wasn't an anomaly in terms of performance. The company was moving into trouble," she told the news source. "Why would you reward at that level when it doesn't sound like they were turning the company around?"

Governance, risk and compliance (GRC) software is crucial to helping corporations identify potentially dangerous practices, such as outrageous compensation policies.

BusinessInsider recently noted three major companies, for example, that are all displaying high risk indicators in terms of corporate governance. Cablevision Systems Corporation, Hudson City Bancorp and the Charles Schwab Corporation. According to the analysis, each has a "high concern" rating in terms of compensation risk, audit risk and shareholder rights risk.

"For a look at how companies are being run, look to their corporate governance policies. These policies represent how the company’s board operates, how the company is audited, how the board exerts control over management and how shareholder rights are protected," the news source urges.

Identifying potential risks in advance is crucial to preventing them from manifesting in corporate policies. Governance, risk and compliance (GRC) software can manage these obstacles.

The audit suggests the party actually had tens of thousands of dollars less than it was supposed to. An amendment of the party's actual financial standings was submitted to the Federal Elections Commission and state Board of Elections.

"I'm glad we were able to recognize these discrepancies and resolve them quickly," he told the Providence Journal. "We worked swiftly and diligently to correct our reports. We can now move forward looking to the future of the party and Rhode Island."

Zaccaria attributes the mistake to human errors dating back to 2002 and insists the issues will be fixed moving forward. No money was illegally spent, he reasserts.

The discovery was announced during Zaccaria's first meeting as head of the state party. He was elected last December.

Conducting in-house reviews is crucial so that small errors don't go on to become larger mistakes. Internal audit software is a vital tool to discover bookkeeping mistakes.

The scathing review deemed the organization's oversight, internal controls and policy guidance by the institution's board of directors were critically deficient, the Milwaukee-Wisconsin Journal Sentinel reports. Legacy was heavily concentrated in commercial real estate loans, which proved to be a volatile and unprofitable market over the past few years as the economy collapsed.

For example, one bank executive hid the delinquent status of a loan from a customer in order to push for a renewal.

"Deficient oversight and weak internal controls were also evidenced by a lack of accurate financial information," the news source explains, citing the report. "Following the resignation of the bank's chief financial officer in September 2010, … numerous errors in the bank's financial information [were discovered], requiring regulatory report re-filings."

Because the economy is still on the mend, it's crucial that organizations pay special attention to risk indicators and develop plans to navigate these potential obstacles.

Speaking with CBC News, Mayor Dennis O'Keefe confirmed an internal audit had been launched in December after officials saw a rash of low-value purchase orders that couldn't be explained by the budget. No disciplinary action has been taken against employees yet, but the individual may be released if the investigation concludes the purchase orders were used for personal gain.

"They will conclude their investigation, I would hope, within the next two weeks so that we can get a resolution to this," O'Keefe told the news source. "Because we need to get a resolution to this, one way or the other, as quickly as possible."

Audited employees aren't always guilty, however. For example, a recent audit found Timothy Wanamaker, a city official of Alexandria, Virginia, was innocent of embezzlement claims.

Copetas was found to be in violation of federal law for providing students employed by the admissions department with scholarships. Additionally, she granted scholarships to a great-niece and great-nephew without citing her blatant conflict of interest and removing herself from the decision-making process, The Western Front reports.

The admissions director was fired by the educational institution three days before the internal audit was published. Copetas has since wrote a response letter to Eileen Coughlin, the vice president for enrollment and student services and Copetas' former supervisor, to dispute the decision, saying other schools in the state have taken less harsh action against larger offenders.

A recent audit elsewhere in the country found the Jefferson County Public Schools' administration was guilty of favoritism while hiring personnel. The audit suggested the school board be completely overhauled.

This mindset is a mistake, however, and auditors need to steer clear of making these assumptions. As Richard Chambers – the president and CEO of the Institute of Internal Auditors – explains, the market is constantly changing and what may have previously been a sound practice may quickly get a corporation into trouble during a new year.

"Following the risks seems so obvious to most internal auditors that it shouldn't even require a New Year's resolution to get it done," Chambers writes on his IIA blog. "Unfortunately, though, repeating last year's audits without considering this year's risks may not yield much value for our stakeholders."

It's crucial financial executives consider the risks their companies currently face when leveraging their internal audit software to assure they aren't committing any mistakes.

Speaking with PropertyCasualty360, the executive notes the importance of responsively identifying trends and emerging risks. East says that technology enables corporations to create, publish and distribute more data, facilitating the discovery of new trends. Conversely, however, it can also be overwhelming.

"The emerging generation of risk professionals is in many ways more connected and engaged in viewing risk management with a broad view and not narrowly limited by the purchase of insurance," he concludes. "This gives us the chance to pass the torch to a cohort prepared for the risks of the future."

Risk management software can help corporations master the tempo of 21st century business practices. Successfully leveraging these tools is key to achieving that mastery.

A state agency monitoring the Klamath County Mental Health Department found several deficiencies regarding billing after the organization was flagged due to non-licensed practitioners conducting patient evaluations. The Office of Payment Accuracy and Recovery was not pleased by the results and the department was forced to repay approximately $91,000 in non-compliant Medicaid bills.

To prevent the issue from reoccurring, Klamath County Mental Health Department has purchased an electronic health records system that will make the process of billing patients more fool-proof.

"The software won't allow us to bill out unless we've done everything correctly," Mental Health Department director Amanda Bunger told the website last week.

Companies looking to avoid compliance issues and ensure they are performing up to par should consider integrating audit software. These software solutions can lead to better results and help companies avoid paying penalties.

The report suggests the employees clocked in for 300 hours they didn't work and would then cover for each other when questioned. While the audit suggested they be fired, the three employees were only punished.

"The investigation was completed in mid-December, while the department already was coping with the departure of its eighth director in eight years, internal accusations of racial discrimination and reverse discrimination, and an ongoing probe of a house construction project that could leave the city on the hook to the federal government for $4.1 million," the Palm Beach Post reports.

Audits are crucial to determining how cities are performing and whether they are being operated properly. Internal audit software can help organizations identify potential problems and deal with them promptly.

It's crucial that companies are transparent with their business operations. With both Olympus and MF Global, boards were frequently timid when critically analyzing off-balance-sheet transactions or deal performance and executives were charged with being secretive. This led to a breach of trust among shareholders.

"Transparency means few, if any, off-balance-sheet transactions, no covering up or minimization of risk warnings, and a free, consistent flow of information from executives to the board, and the board, auditors, and attorneys should have the latitude to question suspect activities," Park explains.

GRC software can play a vital role in helping companies to identify issues before they become troublesome, preventing situations that could lead to shareholder dissatisfaction.

Ira Millstein, a corporate governance expert at Weil, Gotshal & Manges, suggests now is the perfect time to rebuild that relationship among shareholders. Tough economic conditions, slow job growth and political strife have created clouds of doubt over companies heads and if companies are on the path to recovery, they need to show that to dissidents.

"We felt that it was important for all corporations – not just the financial sector – to think about building trust," Millstein told Law.com's Corporate Counsel. "This requires effective disclosure of board decisions and policies, and concerted efforts at shareholder relations and communications, both areas where boards often could focus more attention."

Companies looking to get the edge should also consider GRC software to ensure they are running their businesses efficiently and appropriately.

The internal audit was performed as a part of normal business routines, KCBD reports. While the findings led to the resignation of Bruce, UMC officials refused to comment whether Bruce was the one embezzling funds or whether he was just a player involved with the process.

"In his position at marketing, [Bruce] had financial responsibility for advertisement, marketing, community support, a couple of departments like chaplain services, volunteer services, Seniors Are Special … several things reported to him," added Mark Funderburk, executive vice president of UMC.

By leveraging internal audit software, UMC was able to identify the embezzlement scheme before it was blown out of proportion. If the issue was left unchecked, it could have impacted the organization's relationship with the public taxpayers, who account for a significant amount of UMC's funding.

The committee appointed to perform the review is scheduled to have a final report ready before the end of the month on January 31. The panel was formed in July after shareholders put the pressure on executives to analyze the appropriateness of how the company is being run.

Several media outlets have reported that the results of the report may lead to Jim Balsillie and Mike Lazaridis being replaced and having the co-chairman and chief executive roles split into different positions, with an independent director taking over the chairmanship. This highlights how important GRC software is to ensuring a company is being run appropriately.

The Globe and Mail points to the resignation of Jim Balsillie as the catalyst for RIM's misfortunes. Balsillie was responsible for backdating stock options and RIM never appointed a new executive that could challenge the company's CEOs.

Skyworks Solutions originally brought the allegations to the table in connection with an arbitration proceeding in the Delaware Court of Chancery. AnalogicTech's accounting treatment of certain revenue for transactions conducted through the three-month period ending on June 30, 2011 was called into question.

"The Audit Committee, in consultation with independent outside legal counsel, has completed an internal investigation of these allegations, has found no improper conduct by AnalogicTech's officers, and has concluded that the company's accounting practices with respect to revenue recognition for the three months ended June 30, 2011 were appropriate in all respects," AnalogicTech said in a statement.

Internal audit software can be used to help confirm or deny any allegations made either by different sections in the company or through external business partners or clients.

Women's apparel retailer Talbots recently launched its own P-Card initiative, and to manage spending, the company is using audit software. Irene Connoly, a Talbots associate, told Pymnts.com that auditing the accounts will be crucial to ensuring the success of the program.

"We are now piloting some operational expenses that are high-volume, low-dollar. We’re going to pilot those and try to [learn] from that to figure out how to keep the control over… but they’re expenses because they are high-volume, low-dollar, and sometimes, they’re painful," Connoly explained. "We've got internal audit, accounts payable, procurement, IT, and now, the bank [involved.]"

Talbots has experienced a number of financial troubles over the past few years, so incorporating audit software may help the company get its accounts straightened out.

Investors expect companies to return value to shareholders and are able to grow financially stronger. A successful company is one that constantly and consistently raises their payouts because they are the ones increasing their own expectations.

However, ethical corporate governance is also paramount. A number of companies in the past have tried to mask financial weakness by raising dividends by using their own capital rather that bolstering growth. Well-managed companies will have strong and ethical corporate governance and avoid such practices.

"Companies demonstrating shareholder and customer-centric attributes perform well in turbulent markets, in part because of the loyalty they engender, and that is rewarded through a continuing stream of dividend payments," the news source explains. "Such a commitment is wired into management’s DNA and is the guiding principle of their mission."

Governance, risk management and compliance (GRC) software is crucial to helping corporations achieve ethical corporate governance.

The biggest obstacle preventing better risk identification is the siloed approach that many financial institutions use, Bank Info Security explains. For example, different departments of an organization might be in charge of managing separate liabilities, such as credit, market and operational risk. However, there may be some overlap, which necessitates open communication between departments.

"You really have to communicate broadly throughout the organization," DeMarco told the news source. "Risk-management professionals need to be able to identify and assess risks and communicate those risks to business line managers up the corporate ladder so that risks are managed across the enterprise."

Communication, however, is only one part of the solution. Up-to-date risk assessment software may also help financial institutions ensure they are following any new regulations, such as the Dodd-Frank Act passed last year.

"We are very concerned about what it will mean for the liquidity of the market," Maria Pope, CFO at Portland General Electric, explained. "In terms of overall risk management, we are looking at how we manage the entire power supply operations area and doing extensive benchmarking with other utilities. We also have a fairly robust enterprise risk management program."

As a result, risk is becoming a focus point for many of these energy companies, with every key executive looking to identify and rate potential risks. Automated systems and risk management software are expected to become mainstays at utility providers if they don't already have systems in place.

Several major utility companies are already facing audits to determine whether they are complying with regulations. For example, National Grid recently missed the deadline of its audit, which does not bode well for the company.

Wanamaker was recently found guilty of embezzlement during his time at the city of Buffalo, New York, which prompted an internal audit after he was released from his position at Alexandria City Hall. The report, however, found that Wanamaker did not have the clout to collect funds as the deputy director of General Services at his new position.

"Wanamaker … pleaded guilty to a felony charge of stealing government funds from the city of Buffalo between 2004 and 2008 while serving in a variety of top posts," the Alexandria Times notes. "He tendered his resignation about 48 hours after revealing he had stolen roughly $30,000 in municipal and federal funds."

His position in Alexandria didn't involve traveling, unlike his post in Buffalo, which would have made it difficult to acquire funds.

Discovering corporate gaffs is paramount to running a successful organization. Internal audit software may put organizations in a better position to find these fiscal holes before they amount to a significant amount of lost money.

According to state controller John Chiang, the city's internal controls – or the lack thereof – could potentially lead to waste or malfeasance. The situation is so bad that Chiang compared Montebello to Bell, another California city that has become synonymous with corruption and mismanagement.

"While the roots of Montebello's problems are different from Bell's, they both share the common trouble of having little or, at times, no accountability in their spending of public dollars," Chiang told the news source.

Although no criminal wrongdoing was found, Chiang urges the city to revise its fiscal policies to get back on the right path. 

Not all American cities are struggling with management issues. For example, a recent audit suggests the Louisiana city of Slidell is operating with zero deficiencies.

The root of the problems stem to Rex Millsaps, a previous mayor of the city. There were several unapproved expenditures, an absence of written controls concerning transactions, assets and compliance, and just poor organizational measures in place while he held office from September 2006 to December 2010.

"This is the most important city operational event in the last 30 years," said City Councilman Tony Powell, who called for the report done by the Atlanta-based accounting firm Moore Stephens Tiller. "It goes to the heart of protecting the city's interest."

The audit tackled nine key areas of concern for the city, ranging from the construction of Lawrenceville's $10 million police station to $582,000 in paving and curb improvements. The city paid $20,000 for the review.

This instance further highlights the importance of conducting regular internal audits to prevent such gross mismanagement. By leveraging internal audit software, companies can more effectively avoid years of mismanagement and waste.

More than 80 senior-level auditors attended the seminar, including Sundaresan Rajeswar, a board member of the IIA, and Glenn Rhea, an account director at Qatar. Rajeswar spoke about a new program at the IIA that will help auditors discover risk indicators more effectively.

Meanwhile, Rhea spoke of the growing challenges facing the internal audit community, including new regulatory obligations that businesses need to address and the demand for more advanced GRC software.

"In addition, [Rhea] highlighted the need for greater collaboration between audit and compliance as part of the GRC lifecycle, in order to help meet some of these challenges more effectively and, ultimately, to improve risk assessment results," the news source recounts.

The Dodd-Frank Act, enacted in 2010 by President Barack Obama to prevent another economic collapse, is just one of the many new regulatory reforms businesses must contend with.

A letter sent prior to the holiday break requested the audit due to the lack of a master plan to oversee new renovations and redevelopment at the station, the Washington Times reports. Union Station Redevelopment was created nearly 30 years ago in 1982 and currently oversees Union Station's operations.

"We thought it was about time, frankly, with 90,000 people [daily] coming through the facility … and with huge changes under way," Delegate Eleanor Norton told the news source. "It's a gorgeous facility, and the federal government was right to put money into it. We better find out now if this corporation can support itself in the long term."

So far, the organization has done an effective job managing the site. In 2010, it had a total revenue of $10.3 million with total expenses of $6 million. It ended the fiscal year with total assets worth $33.9 million.

During a recent Globe Street webinar, the news source was consistently asked the same question by brokers: "I'm concerned my property may not pass Probably Maximum Loss Seismic Risk Assessments, which banks do not have a seismic policy?"

This means lenders without a seismic risk indicator policy may be taking on significant loss opportunities in the current economic climate.

"High risk properties are not screened out by Seismic PMLs," Globe Street notes. "And, more subtly, brokers know that they can take potentially more risky deals to these lenders."

Similarly, there are several other risk indicators that property lenders need to incorporate into their management policies if they don't want to end up on the wrong end of the deal. With foreclosures and land prices still at rock bottom, it's ideal to address these issues sooner rather than later.

According to Don Roose, president of U.S. Commodities in West Des Moines, Iowa, there are several potential developments that could affect American farmers. For example, the economic troubles in the European Union could lead to a further decline for feed products, which is a staple of Iowa produce. Land prices have also risen, which means agriculture firms may need to adjust their product prices upward.

"[Still,] we’ve taken a lot of the risk premium out of the market as world production has bounced back," Roose adds. Weather problems in South America may further fuel opportunities for American growers.

Agriculture manufacturers face other issues as well. For example, many government agencies have taken note of consumer demand for greater transparency in the production of goods, which is leading some growers to use few chemicals or genetically modified organisms.

The audit revealed a violation of the airport's original quitclaim deed in addition to mismanagement by the region's Airport Economic Development department. The county entered into a 25-year lease with Evergreen Maintenance Center in 1982. However, the travel center's quitclaim deed says it can't make exclusive deals for right of use.

"There is significant documentation to substantiate the FAA (Federal Aviation Administration) believes Pinal County has violated these deed restrictions," the Office of Internal Audit report states.

"We are (short) some lease money; we are taking steps to rectify the situation, and I am hopeful that Evergreen will recognize the strength of the lease agreement and will make it right," Pinal County District 3 supervisor David Snider told the news source.

For businesses, internal audit software can help discover mismanagement in advance before it has the chance to significantly affect the bottom line.

"If the world is a riskier place than you thought, then you hold more of the lower risk asset, which turned out was Treasuries. Clearly the low level of yields we are looking at is a form of risk aversion," Fisher explains. "The high bond prices/low yields reflect a lot of investors' anxiety about the world and they want to hold a lower-risk asset."

Fisher was also supportive Dodd-Frank directive as it will get more over-the-counter interest rate producing into clearinghouses. This move may push interest rate products into new structures that are better able to adjust to the current economic climate.

Risk management has become even more crucial as corporate treasurers strive to take on higher yields. A new survey from JP Morgan Asset Management suggests new treasurer strategies may be significantly more risky as they look to improve the results of their companies.

The Globe and Mail assert this is in part due to poor corporate governance. Tracing back the issue to 2007, the news source points to the forced resignation of Jim Balsillie as the catalyst. Balsillie was in charge of backdating stock options and a new executive that could challenge RIM's CEOs was never appointed.

"When investors began clamoring for a board shake-up last spring, the board struck up a committee that will not present its findings until the end of January, an eternity in tech time. In the interim, Goldman Sachs began evaluating the company as a takeover target," the Globe and Mail reports.

As of October, RIM occupied only 17.2 percent of the American smartphone market compared to Google's 46.3 percent and Apple's 28.1 percent. Better use of enterprise compliance software could have perhaps helped the mobile tech company avoid this fate.

A 53-page audit was recently presented to members of the Cleveland Board of Public Utilities. The report will enable board members to create even better policies during an upcoming meeting scheduled for January 26.

"The audit went well," Mark Lay, who was behind the audit, told the board.

"He said the auditing team netted no disagreements with management on the numbers or on how they are presented. Ken Webb serves as the longtime manager of the CU Accounting Division," the news source notes.

According to the report, there were no deficiencies in internal control disclosed during the audit of financial statements, no instances of noncompliance material to the financial statements of the Board of Public Utilities of the city of Cleveland and no significant deficiencies in internal control over major federal award programs.

Another regional utility provider – National Grid – has delayed the completion of its audit, perhaps suggesting it may not be as well off as Cleveland Utilities.

The $1.76 million study, performed by Overland Consulting of Leawood, Kansas, was originally slated to be finished by September 30 and a final report was due at the end of November. However, the Public Service Commission, the organization receiving the report, says the audit is still in progress.

"Under the terms of the audit contract, neither Overland nor National Grid is allowed to comment on the audit before its completion, except to confirm that it is under way," the news source notes. However, PSC spokeswoman Anne Dalton did explain that it's a "comprehensive study" that will be done "when it's done."

The audit was originally ordered in 2010 after commission staff member discovered a number of inconsistencies and irregularities.

National Grid is a U.K.-based utility provider, with major electric and natural gas operations throughout New York and New England. Its U.S. headquarters is based out of Boston, Massachusetts.

State law dictates that all governments must audit their finances on a yearly basis to ensure there are no discrepancies. Fortunately, Slidell's leaders had little to worry about, as the audit – performed by accountant Jim Tonglet and his firm – found nothing wrong.

"Our report found no deficiencies," Tonglet told the city council. "You have been good stewards of the city’s resources … The bleeding has stopped."

As the news source notes, the city's tax revenue had been slipping after Hurricane Katrina and the 2008 economic recession, but the government has managed to get its financials straightened out over the past year. To date, Slidell has more than $150 million in assets to deal with.

Internal audit software can help organizations better identify potential risk issues and prevent major losses from happening in the first place.

The pair of audits, which were filed with the Peoria County Supervisor of Assessment's Office, uncovered $848,000 worth of losses last year and $678,000 in 2009. The leak also cost $400,000 in 2008 and 2007. Clifton Gunderson, one of the accounting firms, seriously doubts the ability of the team to recover from the losses.

Club management, however, remains optimistic. President Rocky Vonachen told press the team would be financially stable in years to come, explaining the losses were only natural given the weak national economy. Speaking with the Peoria Journal-Star, Vonachen noted next season marks the 10th anniversary of the new stadium, which should bring higher attendance.

In the down economy, organizations should always be leveraging internal audit software to identify risk indicators and prevent these losses from occurring.

Trayport associate James Davies notes that many energy firms are not fully prepared for the storm of regulatory changes slated to hit over the coming months. This is particularly the case in Europe, with new rules such as the European Market Infrastructure Regulation, which sets mandatory clearing and reporting requirements for over-the-counter derivatives.

Davies also noted the Dodd-Frank Act in the United States, saying it "will impact trading, clearing and reporting, and also sets position limits on certain commodities – although these rules are subject to a legal challenge by the International Swaps and Derivatives Association and Securities Industry and Financial Markets Association."

The Dodd-Franck Act is affecting a number of different sectors, ranging from energy firms to major financial institutions. The act was enacted in 2010 by President Barack Obama in an attempt to prevent another financial meltdown.

As BankTech notes, however, complying with these seemingly always-moving compliance targets doesn't need to be something to dread. In many cases, implementation of new technology can help financial institutions actually become more efficient.

While the news source is quick to note the complexity and ambiguity of newly published legislation, allocating some funding for risk management software may be a wise investment in the long run.

"We are fairly confident that money is being set aside in budgets for regulatory initiatives for when they do go into effect," Michael Versace, global risk research director for IDC Financial Insights, added.

Meanwhile, the Federal Reserve Board recently issued a new multi-faceted proposal that may reinforce regulation and supervision of bank holding companies through measures designed to bolster risk management, stress testing and credit exposure.

David Landsittel, the chairman of the COSO, explained the key concepts in the modernized framework are timeless, retaining the core definition of internal control. Changes, however, were deemed necessary to keep up with the new-age business and operating environment.

"The update should allow organizations to more effectively utilize the framework to develop and maintain systems of internal control in support of their long-term success," Landsittel said. "Effective internal control allows organizations to adapt to a changing business landscape, and obtain confidence that controls mitigate risks to acceptable levels. This is key for the long-term success of any organization."

Observing risk indicators and developing solutions to minimize them is crucial in the current business environment, especially as more companies are looking to improve revenue – despite the potential threats.

The 70-page report, conducted by two outside experts over the course of the summer, notes that several administrators were being overpaid based on current marketplace values, in addition to the hiring fiascoes.

"We see this report as a start of a conversation that the superintendent will need to have with the school board and the community in Jefferson County about the future of the central-office staffing," said the report’s co-author, Fenwick English, a professor of educational leadership at the University of North Carolina at Chapel Hill.

Overall, the report suggests recasting 31 positions throughout the JCPS board to lend better support to the 155 schools in the region. Auditors also found an additional five jobs that were unnecessary.

Whether it's a school or a major corporation, conducting internal audits can help find wasteful practices before they become a greater issue. Organizations should consider upgrading their internal audit software to prevent any deficiencies.

The first measure is risk-based capital and leverage requirements, which would be implemented in two phases. Phase one requires firms to develop annual capital plans, conduct stress tests and maintain adequate capital. The second would implement a risk-based capital surcharge based on the framework and methodology developed by the Basel Committee on Banking Supervision.

Additionally, the liquidity requirements "would be implemented in multiple phases. First, institutions would be subject to qualitative liquidity risk-management standards generally based on the interagency liquidity risk-management guidance issued in March 2010," the organization noted. These standards would require companies to conduct internal liquidity stress tests and set internal quantitative limits to manage liquidity risk."

The Federal Reserve has implemented a number of policy changes over the course of the year to modify regulatory practices since the passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Three-quarters of respondents (75.62 percent) said the plan to keep employment level over the next 12 months, while 16.34 percent intend to ramp up new hiring significantly over the same time period. Overall, only 6.65 percent of companies believe they will cut back on their existing workforces.

"The results come on the tail end of a positive year for privately held businesses, which saw average sales growth of over 6 percent, an increase from 4.5 percent in 2010, and -5 percent in 2009. Similarly, private businesses’ average net profit margin is at a 10-year high of 6.4 percent in 2011, after hitting a low of 4.2 percent in 2009, and climbing to just over 5 percent in 2010," the news source added.

With corporations hiring more accountants, it's equally crucial they upgrade their internal audit software, as it will help their larger workforce perform their jobs more efficiently.

However, as CreditUnionTimes suggests, quality of risk assessment is a crucial component. Inadequate procedures could prevent an organization from crafting an effective security and technology strategy, leading to potential losses.

"Overall risk to the organization/entity is the sum of all of the risks described in their risk catalog which represents the portfolio of relevant risks. Following this process can help your organization to build appropriate controls," the news source notes.

Organizations should develop a threat catalog that describes applicable risks and then determine the relevance as well as each impact a threat could have. Any vulnerabilities and inherent risks should be addressed in advance as well.

A disciplined approach will help companies discover risk indicators in advance, enabling them to avoid any potential threats before they become a serious problem.

Such a change could dramatically impact the relationship between external and internal auditors, how external auditors collaborate with internal auditors to maximize efficiency and how audits are generally planned and performed, the IIA argues. IIA president and CEO Richard F. Chambers also cited research conducted by the group, which suggested most auditors disagree with the proposal.

"It's not clear whether mandatory audit firm rotation will enhance auditor independence, objectivity and professional skepticism when considering the cost/benefit trade-offs," he explained.

Other disadvantages of a mandatory rotation include increased costs to the company, loss of knowledge during the transition and erosion of overall audit quality.

Despite what changes may happen regarding external audit firms, corporations should continue to use updated internal audit software to produce the most accurate reports.

The CVB board stopped its audit early on Monday evening as not all members had copies of the report. Audits for fiscal years 2009 and 2010 are now complete, while the 2011 report is still in progress. So far, Treasurer Bart Wise has discovered $19,700 in undocumented expenses – $14,000 of which had no receipts and another $5,700 which had no receipts or explanation of expenditures.

The majority of expenses came from previous executive director James Tsismanakis, who used funds for credit card purchases. Wise has implemented changes to prevent this from happening again in the future, explaining expenditures are now paid primarily with checks.

The Columbus, Mississippi Dispatch notes the board discussion was ripe with animosity between the various members, who were upset with the missing money.

Internal audit software, when used often, can help avoid situations such as these, enabling companies to find misappropriated funds before they can build up.

Richard Chambers, the president and CEO of the IIA and a member of several other accounting groups, admits that sometimes audits should be made public. For example, government auditors are necessary to maintain public trust in federal institutions.

However, when audits become public, it puts increased pressure on the corporation being inspected. Chambers recounts several occasions when he was asked not to look at specific areas because the company in question knew there were several problems but didn't want them appearing on public record.

"I recognize that internal auditors are often champions for transparency, but I believe that if our reports were distributed widely to stockholders, the press and other outside parties, over time our relationships with management might erode and our ability to add value would diminish," he explained.

This highlights both the importance of external and internal audits. To keep track of such deficiencies, it's crucial that companies use internal audit software.

BCG surveyed a number of advisers from big-name financial institutions in response to an SEC study that looked at three options for improving investment advisor examinations. One of the suggested proposals was the establishment of a self-regulatory organization that would examine all SEC-registered investment advisers.

"Among its key findings, Boston Consulting concluded that funding an enhanced SEC oversight program would cost $240 million to $270 million a year, while a FINRA SRO would cost $550 million to $610 million, and an entirely new SRO would cost $610 million to $670 million per year," Financial Planning reports, citing the BCG research.

Protecting investors has traditionally been a key goal of financial advisers, and the SEC proposal would further see that objective is carried out.

The deposit theft was the most egregious of the findings. Two employees at Kiroli Park were forging fake receipts and cashing checks for lodge rentals for themselves. Nearly $60,000 was taken from customers who were looking to rent the lodge or other picnic areas around the park.

"This had been ongoing for a period of time longer than the fiscal year ending June, 30, 2011," the news source states, quoting the report. The employees were terminated and arrested for felony theft in January 2011.

The report also noted deficiencies involving the handling of cash from customers at locations outside of town, such as the local recreation center and the convention center.

Better internal audit software may have helped the state department find the employees stealing the $60,000 much quicker instead of taking nearly a year. Given the rocky economy, finding these deficiencies in advance can be crucial for corporations.

Take, for example, Raymond James Financial – the firm had a client running a Ponzi scheme. After the situation was discovered and the client was brought to court, advisers from the firm faced fines for not reporting the instance and public rebuke.

Traditionally, financial advisers weren't always called upon to uncover fraudulent activities – sanctions were infrequently levied against the financial firms behind the offender. However, the passing of the USA Patriot Act, Bank Secrecy Act and other regulations has placed a greater emphasis on watchdog duties over the past two years.

"This is part of the maturing of anti-money laundering regulation," added Aaron Fox, managing director of IPSA International.

GRC software can help advisers better identify potentially fraudulent activities, enabling them to avoid any legal or brand repercussions.

According to the source, it may be a mistake to ignore KRIs and the outcomes of these processes. Current models produce a value-at-risk figure that doesn't bear much connection to the companies it is supposed to be applicable to. They just know to avoid having large losses that could affect that number.

"This is different to market and credit risk models. In market risk, for example, if an exposure to a particular instrument or market is deemed higher than management wants it to be, traders will hedge the position away or simply reduce it by selling assets," the news source suggests.

When developing a risk identification policy, it's crucial to consider a variety of factors. The most effective way to manage risk is by knowing how these different elements may affect the bottom line.

The Hollywood company was in the process of preparing for its upcoming initial public offering when recently appointed CEO Paul Byles suggested getting an audit from a third-party company, Squar, Milner, Peterson, Miranda & Williamson. Byles had worked with the firm before and opted to go with it instead of a local auditor because of his past experience.

However, Square Milner came to the conclusion that Hollywood Studios International had been mismanaged over the past two years, with several bookkeeping procedures drawing red flags from the firm. As a result, Byles pulled out from the company and withheld his future investments until the mismanagement issues were addressed.

After hearing the results, Hollywood Studios International claims it was set-up, and the audit was done improperly. If Hollywood Studios International had used internal audit software for risk identification, the whole situation may have been nipped in the bud.

Internal audit budgets and resources allocated to conducting them are beginning to stabilize after years of fighting for resources to accurate monitor processes and procedures, GovInfoSecurity notes. In 2012, many internal audit organizations will also be able to staff up for the first time in several years.

With more budget devoted to audits, the report suggests that strategic risks will be the new critical priority.

"Studies show that strategic risks present the greatest threats to shareholder value, an area that internal auditors frequently overlook," the news source explains. "Only 57 percent include strategic risk assessments in their annual risk assessment."

Additionally, more than half of internal audit groups said risk identification will see renewed attention. Perhaps with greater budgets, these departments should upgrade their internal audit software to better evaluate their corporations.

Auxiliary services include vending machines, copy and print services, culinary and hospital facilities as well as parking and transportation. KSU vice president of operations Dr. Randy Hinds took his position at the end of 2010 and asked for an audit to be conducted due to what he perceived to be as "loose protocols."

"The University’s K-Cash program allows KSU faculty, staff and students to access nine terminal locations throughout the campus where they can deposit money into machines to create fund balances on their KSU ID cards," the report states. "Eight machines accept cash only, and one machine accepts both cash and credit card deposits."

Internal audit software can help companies determine where they are losing revenue, which is especially crucial considering the turbulent economic situation.

Debbie Fletcher, a principal at Deloitte, explains that federal leaders have traditionally faced and managed risks. These challenges have become more complex and frequent as of late, however, and the future is less predictable. In response, they need risk management strategies that are more suitable to the economic climate.

"Leaders will want a more thoughtful and systematic approach of risk and how these risks could impact accomplishing critical mission objectives. Agencies and programs that can more clearly connect their budget requests with risk will do better as they face these looming budget cuts," she added.

According to a recent survey from JP Morgan, treasurers are growing less risk-adverse. They want to generate revenues, and they are willing to do more to achieve this goal, highlighting the need for better risk management. 

The audit analyzed the school year that ended June 30, with auditing firm Yeo & Yeo finding eight cases of material weakness. After observing the report, the school district says it agrees with the findings. Now, it plans to fix all the instances except one. This is the first time the school district was notified for improper accounting practices, says superintendent Linda Thompson.

"Some of these practices we did not realize were not good practices," Thompson told the news source, explaining that she was just following the procedures put in place by those who served before her. "That was practice long before me … You follow what the people before you did."

David Martell, executive director of Michigan School Business Officials, notes that eight material weaknesses in one audit is a surprisingly large discrepancy.

Many Michigan schools are finding ways to cut expenses where possible, and the newly-discovered deficits certainly won't help the district. This further highlights the importance of internal audit software.

Users get frustrated at having to look through all sorts of features and information that don’t apply to the task in hand. Some people, particularly infrequent users, can feel like they are being forced to play some cruel game of Where’s Waldo? when they look at an unfamiliar and cluttered interface.

In GRC Cloud we have worked hard to minimize this issue by making each field configurable for any user role, setting it as editable, read only or hiding it completely from view. In our new Workflow concept we have gone one step further.

In Workflow, a user may work on an item in more than one step – or state – of a workflow. In each state he or she may be required to complete different information and read different information that has been provided. In fact they may be required to attach evidence in the form of an external file in one state, but need to be prevented from doing so in another.

GRC Cloud’s Workflow Builder enables you to manage not only what a user can see or change, but when the user can see or change it. This enables your users to complete their work more quickly, as they do not have to search for the relevant information and wonder whether they are doing the right work at the right point of the business process.

For administrators, by simplifying the interface not only do you have happier users (and thus more buy-in to the program), you can also train people more quickly on what they need to do and when and you get fewer questions from people once they start their work.

We believe that workflow is all about providing the right information to the right people at the right time. The easier it is for people to work in your GRC program, the more enthusiastically it is adopted and the better input you will receive
This begs some questions.

• If you could expand the reach of your governance, risk or compliance program without increasing your training budget or administrative workload, would you do so?
• Could you ask people to assess more risks or evaluate more controls if they could do the work more quickly?
• Would you invite more people to participate if you knew your process and software design was intuitive and those additional people would provide valuable insights?
• Wouldn’t this make your company a more effective GRC organization?

By the way, the new workflow capability is introduced in GRC Cloud 6 which is being launched in January.

"Risk can never be entirely eliminated, but using risk assessments as part of an enterprise-wide risk management strategy will help credit unions continue to provide meaningful products and services to members while including necessary safeguards to protect the credit union," Davidson said at the CUES Directors Conference, the Credit Union Times reports.

The growing number of regulatory requirements – such as the Federal Financial Institutions Examination Council's new online authentication guidance – are increasingly making everyday operations at credit unions more complex. Better risk assessment processes will go a long way to ensuring companies aren't putting their earnings in danger.

As both entrepreneurs and consumers grow tired of new fees levied by traditional financial institutions, credit unions are becoming more popular and are increasingly managing more money. A number of credit unions saw an influx of tens of thousands of members in October after several banks launched debit card usage fees.

Given the growing importance of risk management, it's crucial that companies conduct effective risk assessments and have the right tools to do so.

According to a JP Morgan survey of 487 treasurers worldwide, risk appetite has continued to grow. This is despite the growing European economic crisis and the soft recovery of the U.S. economy.

Although surplus cash levels are at historic highs and still growing, the desire for return on investment is increasing even faster. Return on investment is now the key indicator of financial success, respondents said, up 48 percent in 2010 to 64 percent this year.

"At the same time, risk management is now the third most important issue for treasurers, moving up from fifth in 2010," the news source notes. "When selecting a primary bank, treasurers are now more focused on the financial strength of an institution rather than the importance of relationship management – down from 62 percent in 2010 to 50 percent this year."

When corporations are striving to achieve ROI so heartily, risk assessment software may help them avoid any potentially disastrous scenarios. 

The frauds ranged from misstatements of revenue to straight theft of inventory or cash. The survey was conducted by Certified General Accountants Association of Canada (CGA).
The top 6 fraud risks in order of decreasing frequency were identified as:

1. Misappropriation of inventory or assets
2. Misappropriation of cash
3. Misrepresentation of employment credentials, internal or external documents
4. Corruption
5. Theft of proprietary information and intellectual property
6. Assets/Revenue overstatement or understatement

So why are companies so vulnerable? “80% [of companies surveyed] aren’t prepared to deal with fraud in the workplace, the CGA says, and almost 60 per cent don’t go through regular assessments of how at risk they are to fraud.”

BPS Resolver’s risk assessment software systems are used to identify and assess enterprise risks including fraud by 8 of the top 10 global accounting firms(1) and by hundreds of the world’s best managed companies, large and small. Call today and ask us about our pre-packaged Fraud Risk Assessments.

Source & Quotes from: http://www.cbc.ca/news/business/story/2011/12/06/cga-fraud-report.html

(1)- Top 10 ranking from 2010 publication Accounting Today Top 100 Firms

The Tax Administration recently reviewed whether IRS examiners were following the guidelines they were supposed to as they reviewed the tax returns belonging to small-time corporations that owned less than $10 million in assets, Accounting Today reports. As the news source notes, these organizations typically have shareholders that are very involved with management of day-to-day transactions, which could lead to improperly organized financial operations.

"However, when TIGTA reviewed a nonstatistical sample of 51 closed corporate audits, it found potential quality concerns in 19 of them," Accounting Today added. "For example, IRS examiners did not always document the steps taken to investigate significant differences between the labor costs deducted in the corporate return and the amounts reflected on employment tax returns filed with the IRS."

If the IRS intends to become stricter with its auditing procedures, small corporations should consider integrating internal audit software to avoid costly run-ins with the agency.

Structural shifts in supply and demand are expected to keep commodity prices unpredictable. Short- and long-term commodity risk management strategies are seen as being the key to riding out the volatile price market.

"Companies need to set up a formal commodity risk management program," says report co-author and partner at Oliver Wyman's Global Risk & Trading consulting practice Alex Wittenberg. "The impact of volatile commodity prices can no longer be managed within a single function as a cost or procurement issue if companies are to respond successfully to these long-term trends."

Given the rocky economy, proper risk management has become especially important – one wrong step could have a detrimental impact on businesses. By leveraging risk and compliance software, companies can establish programs that will help them avoid these scenarios.

Please join us for an informative webinar presentation to help you prepare, set, and use Risk Tolerances in your Credit Union. Our speakers will overview guidance from the DICO web site (posted in September 2011), and will provide examples on how Risk Tolerances work, and how to use them.

Click here to register now.

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Grant Thornton LLP and Directors Global™ would like to invite you to an exclusive presentation on Wednesday, November 16, 2011 on the topic of Enterprise Risk Management. Register now!

Setting and using corporate risk tolerance—engaging your board and executive team is the first in a series designed to provide executives and directors with the necessary tools to implement best practice risk strategies. The series will also provide solutions on how to mitigate corporate risks and offer insights into improving board governance practices.

Registration is complimentary but space is limited. To register and for more information, please visit our event page.