Presentation by V

1. CMA as a game changer in
supporting sustainable
strategies: risk management
Vincent Tophoff, International
Federation of Accountants (IFAC)
ICAI National Cost Convention
New Delhi, India
March, 2012
Page 1 | Confidential and Proprietary Information

2. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
Overview
• IFAC and its PAIB Committee
• IFAC’s work on risk management and internal control
• Recent developments in risk management and internal
control:
• Global Survey on risk management and internal control
• Revision of the COSO Framework on Internal Control
• Development of implementation guidance to the ISO Risk
Management Standard
• IFAC’s International Good Practice Guidance (IGPG) on
Evaluating and Improving Internal Control in Organizations
• Next steps
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3. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
The International Federation of Accountants (IFAC) is:
• The global organization of the accountancy profession
• 164 member bodies and associates in 125 countries
• 2.5 million professional accountants in public practice,
commerce, industry, financial services, the public sector,
education, and the not-for-profit sector
• Public interest focused
More than half are
in this box. We call
them PAIBs and the
PAIB Committee
exists to support
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4. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
What IFAC does:
• Establish and promote adherence to high quality
professional standards
• Further adoption and implementation of standards
• Support the global development of the accountancy
profession
• Provides a global voice and promotes the value of
professional accountants worldwide
• Helps its members support professional accountants
in business and small and medium practices
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5. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
IFAC’s PAIB Committee >Topic Areas of Importance:
• Governance and ethics
• Risk management and control
• Sustainability and corporate responsibility
• Financial and performance management
• Business reporting
• Promoting and contributing to the value of PAIBs
Ergo: The CMA/PAIB as a game changer in supporting
sustainable strategies!
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6. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
IFAC Risk Management & Internal Control > Activities
• Collaborating with experts (among others with ICAI) on the
development of guidance for CMAs/PAIBs on risk
management and internal control
• Participating in global risk management and internal
control standard setting organizations (e.g., COSO & ISO)
• Engaging in dialogue with the various issuers of
governance codes around the globe (e.g., OESO, G20,
UNCTAD, and Ministry of Corporate Affairs of India)
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7. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
IFAC Risk Management & Internal Control > Publications
• Defining and Developing an Effective Code of Conduct for Organizations
• Internal Control from a Risk-Based Perspective interviews with
CMAs/PAIBs
• Evaluating and Improving Governance in Organizations a framework for
how CMAs/PAIBs can contribute to evaluating and improving
governance in organizations
• Integrating the Business Reporting Supply Chain interviews with 25
prominent business leaders
• IFAC’s Global Survey on Risk Management and Internal Control—
Results, Analysis, and Proposed Next Steps
• Evaluating and Improving Internal Control in Organizations
• All IFAC Publications free-of-charge at www.ifac.org
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8. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
Global Survey on Risk Management and Internal
Control—Results, Analysis, and Proposed Next Steps
• Received over 600 responses from around the globe (29%
or 5% from CMAs and other experts from India)
• More awareness of the benefits of risk management and
internal control systems should be created
• Risk management and internal control systems should be
better integrated into organizations‟ overall governance,
strategy, and operations
• Risk management and internal control requirements and
guidelines should be further aligned internationally
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9. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
IFAC participation with COSO (1)
• Committee of Sponsoring Organizations of the Treadway
Commission (COSO)
• Providing thought leadership through the development of
frameworks and guidance on enterprise risk management
and internal control
• Through Frameworks on Enterprise Risk Management
and Internal Control (widely used for SOX certification)
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10. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
IFAC participation with COSO (2): Framework
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11. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
IFAC participation with COSO (2)
• Revision of the COSO Internal Control Framework to:
– Enhance and clarify application of Framework in today's
business and risk environment
– Codify the Framework criteria in 17 principles for
development of systems of internal control and in evaluating
the effectiveness
– Expand to internal and non-financial reporting guidance
• Exposure draft available at www.coso.org (until March 31)
• Push from PAIB Committee for more leading edge thought
leadership in area of risk management and internal control
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12. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
IFAC participation with ISO 31000 (1)
• International Standards Organization (ISO) developed the
standard ISO 31000:2009 Risk Management
• Provides principles and generic guidelines on risk
management
• Can be used by any public, private or community
enterprise, association, group, or individual
• Can be applied to any type of risk, whatever its nature,
whether having positive or negative consequences
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13. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
IFAC participation with ISO 31000 (2): Principles
• Creates value
• Integral part of organizational processes
• Part of decision making
• Explicitly addresses uncertainty
• Systematic, structured and timely
• Based on the best available information
• Tailored
• Takes human and cultural factors into account
• Transparent and inclusive
• Dynamic, iterative and responsive to change
• Facilitates continuous improvement
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14. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
IFAC participation with ISO 31000 (3): Process
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15. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
Global Crisis:
• Ethical flaws
• Governance in name but not in spirit
• Regulatory overload, leading to legalistic compliance
• Risk & control systems too narrowly focused
Conclusions:
• Appropriate application of risk management and internal
control standards and principles is often the problem
• CMAs/PAIBs support their organizations in evaluating
and improving their risk management and internal control
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16. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
IFAC’s International Good Practice Guidance
• Evaluating and Improving Internal Control in Organizations
(exposure draft)
• Designed to establish a benchmark for good practice in
maintaining effective internal control in response to risk,
and help CMAs/PAIBs and their organizations create a cycle
of continuous improvement for their internal control systems
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17. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
IGPG Principles > Good Internal Control Should:
• Support the organization’s objectives
• Define clear roles and responsibilities
• Link to individual performance
• Ensure sufficient competency
• Support organizational culture
• Respond to risk
• Be communicated regularly
• Be monitored and evaluated regularly
• Provide for accountability and transparency
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18. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
Next step > Further Global Alignment of Guidelines
• IFAC facilitates further global alignment of risk
management and internal control guidelines
• Through bringing various risk management and internal
control standard setting organizations (and their
guidelines!) closer together
• As per the outcomes of our survey!
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19. ICAI National Cost Convention
CMA as a game changer in supporting sustainable
strategies: risk management
Questions?
• Many thanks for your interest
• Happy to answer your questions
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20. • For further information please contact:
• Vincent Tophoff at vincenttophoff@ifac.org
• Visit www.ifac.org
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