The document discusses the International Federation of Accountants' (IFAC) work on risk management and internal control. It highlights IFAC's participation in developing standards and guidance with organizations like COSO and ISO. It also summarizes IFAC's publications and global survey results on risk management. Finally, it presents IFAC's guidance for evaluating and improving internal control, which is designed to help professionals establish good practices for maintaining effective internal control.

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
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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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