Search results for: audit risk model

Authors: Mueller Jann, Hoffmann Christian Hugo

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Conventional quantitative risk management in banking is a risk factor of its own, because it rests on assumptions such as independence and availability of data which do not hold when rare events of extreme consequences are involved. There is a growing recognition of the need for alternative risk measures that do not make these assumptions. We propose a novel method for modeling the risk associated with investment products, in particular derivatives, by using a formal language for specifying financial contracts. Expressions in this language are interpreted in the category of values annotated with (a formal representation of) uncertainty. The choice of uncertainty formalism thus becomes a parameter of the model, so it can be adapted to the particular application and it is not constrained to classical probabilities. We demonstrate our approach using a simple logic-based uncertainty model and a case study in which we assess the risk of counter party default in a portfolio of collateralized loans.

Keywords: risk model, uncertainty monad, derivatives, contract algebra

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Authors: Ashley Wei-Ting Wang, Wen-Yau Hsu

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Objectives: The current study applies and expands the Tripartite Model to elaborate the link between non-suicidal self-injury (NSSI) and suicidal behavior. We propose a structural model of NSSI and suicidal risk, in which negative affect (NA) predicts both anxiety and depression, positive affect (PA) predicts depression only, anxiety is linked to NSSI, and depression is linked to suicidal risk. Method: Four hundreds and eighty seven undergraduates participated. Data were collected by administering self-report questionnaires. We performed hierarchical regression and structural equation modeling to test the proposed structural model. Results: The results largely support the proposed structural model, with one exception: anxiety was strongly associated with NSSI and to a lesser extent with suicidal risk. Conclusions: We conclude that the co-occurrence of NSSI and suicidal risk is due to NA and anxiety, and suicidal risk can be differentiated by depression. Further theoretical and practical implications are discussed.

Keywords: non-suicidal self-injury, suicidal risk, anxiety, depression, the tripartite model, hierarchical relationship

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Authors: Shuofen Hsu, Ya-Yi Chao, Chao-Wei Li

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This paper investigates the relationship between voluntary audit (hereafter, VA) of semi-annual consolidated financial statements decision and accounting conservatism. In general, there are four kinds of auditors' assurance services, which include audit, review, agreed-upon procedure and compliance engagements base on degree of assurance. The VA work by auditors may not only have the higher audit quality but an important signal of more reliable information than the review work. In Taiwan, The listed companies must prepare the semi-annual consolidated financial statements and with auditors' review before 2012, but some of the listed companies choose the assurance work from review to audit voluntarily. Due to the adoption of International Financial Reporting Standards, the listed companies were required to prepare the second quarterly consolidated financial statements which should be reviewed by auditors since 2013. This rule will change some of the assurance work from audit to review by auditors, and the information asymmetry maybe increased. To control the selection bias, we use two-stage model to test the relationship between VA decision and accounting conservatism. Our empirical results indicate that the VA decision and accounting conservatism have a significant positive relationship in firms with family-controlled. That is, firms with family-controlled are more likely to do VA and to prepare more conservative consolidated financial statements to reduce the information asymmetry, meaning that there is a complementary effect between VA and accounting conservatism for firms with more information asymmetry. But on the contrary, we find that the VA decision and accounting conservatism have a significant negative relationship in firms with professional managers-controlled, meaning that there is a substitution effect between VA and accounting conservatism for firms with less information asymmetry. Finally, the accounting conservatism of consolidated financial statements decrease after the adoption of IFRSs (International Financial Reporting Standards) in Taiwan. It means that the disclosure and transparency of consolidated financial statements had be improved.

Keywords: voluntary audit, accounting conservatism, audit quality, information asymmetry

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Authors: Masoud Nasiri Sarvi, Yunhua Luo

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Low-trauma hip fracture, usually caused by fall from standing height, has become a main source of morbidity and mortality for the elderly. Factors affecting hip fracture include sex, race, age, body weight, height, body mass distribution, etc., and thus, hip fracture risk in fall differs widely from subject to subject. It is therefore necessary to develop a subject-specific biomechanical model to predict hip fracture risk. The objective of this study is to develop a two-level, image-based, subject-specific biomechanical model consisting of a whole-body dynamics model and a proximal-femur finite element (FE) model for more accurately assessing the risk of hip fracture in lateral falls. Required information for constructing the model is extracted from a whole-body and a hip DXA (Dual Energy X-ray Absorptiometry) image of the subject. The proposed model considers all parameters subject-specifically, which will provide a fast, accurate, and non-expensive method for predicting hip fracture risk.

Keywords: bone mineral density, hip fracture risk, impact force, sideways falls

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Authors: Shreya Saxena

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Background: Choledocholithiasis is a common complication of gallstone disease. Risk scoring systems exist to guide the need for further imaging or endoscopy in managing choledocholithiasis. We completed an audit to review the American Society for Gastrointestinal Endoscopy (ASGE) scoring system for prediction and management of choledocholithiasis against the current practice at a tertiary hospital to assess its utility in resource optimisation. We have now conducted a cost focused sub-analysis on patients categorized high-risk for choledocholithiasis according to the guidelines to determine any associated cost benefits. Method: Data collection from our prior audit was used to retrospectively identify thirteen patients considered high-risk for choledocholithiasis. Their ongoing management was mapped against the guidelines. Individual costs for the key investigations were obtained from our hospital financial data. Total cost for the different management pathways identified in clinical practice were calculated and compared against predicted costs associated with recommendations in the guidelines. We excluded the cost of laparoscopic cholecystectomy and considered a set figure for per day hospital admission related expenses. Results: Based on our previous audit data, we identified a77% positive predictive value for the ASGE risk stratification tool to determine patients at high-risk of choledocholithiasis. 47% (6/13) had an magnetic resonance cholangiopancreatography (MRCP) prior to endoscopic retrograde cholangiopancreatography (ERCP), whilst 53% (7/13) went straight for ERCP. The average length of stay in the hospital was 7 days, with an additional day and cost of £328.00 (£117 for ERCP) for patients awaiting an MRCP prior to ERCP. Per day hospital admission was valued at £838.69. When calculating total cost, we assumed all patients had admission bloods and ultrasound done as the gold standard. In doing an MRCP prior to ERCP, there was a 130% increase in cost incurred (£580.04 vs £252.04) per patient. When also considering hospital admission and the average length of stay, it was an additional £1166.69 per patient. We then calculated the exact costs incurred by the department, over a three-month period, for all patients, for key investigations or procedures done in the management of choledocholithiasis. This was compared to an estimate cost derived from the recommended pathways in the ASGE guidelines. Overall, 81% (£2048.45) saving was associated with following the guidelines compared to clinical practice. Conclusion: MRCP is the most expensive test associated with the diagnosis and management of choledocholithiasis. The ASGE guidelines recommend endoscopy without an MRCP in patients stratified as high-risk for choledocholithiasis. Our audit that focused on assessing the utility of the ASGE risk scoring system showed it to be relatively reliable for identifying high-risk patients. Our cost analysis has shown significant cost savings per patient and when considering the average length of stay associated with direct endoscopy rather than an additional MRCP. Part of this is also because of an increased average length of stay associated with waiting for an MRCP. The above data supports the ASGE guidelines for the management of high-risk for choledocholithiasis patients from a cost perspective. The only caveat is our small data set that may impact the validity of our average length of hospital stay figures and hence total cost calculations.

Keywords: cost-analysis, choledocholithiasis, risk stratification tool, general surgery

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Authors: Meiqun Yin, Jidong Zhang, Fan Liu

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The paper investigates the impact of social media on audit opinion. The numbers of posting and reposting negative reports from SINA Micro-blog are collected to measure the influence of social media. The research collected the samples from Chinese public firms from 2012 to 2014. It is found that the numbers of posting and reposting negative reports in SINA Micro-Blog would significantly relate to the qualified opinion while controlling firm size. Another finding is that the numbers of posting and reposting negative reports would be much more significantly impact on audit opinion if the firm received a qualified opinion in the previous period. It is also found that the involvement of more independent directors has no relationship with the influence of social media on audit opinion.

Keywords: association, social media, audit opinion, SINA Micro-Blog

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Authors: Naziru Suleiman

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The ever increasing cases of financial frauds and corporate accounting scandals in recent years have raised more concern on the operation of internal control mechanisms and performance of the internal audit departments in organizations. In most cases the seeming presence of both the internal control system and internal audit in organizations do not prove useful as frauds errors and irregularities are being perpetuated. The aim of this study, therefore, is to assess the role of internal audit in achieving the objectives of internal control system of federal hospitals in Kano State from the perception of the respondents. The study used survey research design and generated data from primary source by means of questionnaire. A total number of 100 copies of questionnaire were administered out of which 68 were duly completed and returned. Cronbach’s alpha was used to test the internal validity of the various items in the constructs. Descriptive statistics, chi-square test, Mann Whitney U test and Kruskal Wallis ANOVA were employed for the analysis of data. The study finds that from the perception of the respondents, internal audit departments in Federal Hospitals in Kano State are effective and that they contribute positively to the overall attainment of the objectives of internal control system of these hospitals. There is no significant difference found on the views of the respondents from the three hospitals. Hence, the study concludes that strong and functional internal audit department is a basic requirement for effectiveness of operations of the internal control system. In the light of the findings, it is recommended that internal audit should continue to ensure that the objectives of internal control system of these hospitals are achieved through proper and adequate evaluation and review of the system.

Keywords: internal audit, internal control, federal hospitals, financial frauds

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Authors: E. Channol, O. Collet, N. Kostyuchyk, T. Mesbah, Quoc Hoang Long Nguyen

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In this paper, a pricing model is proposed for co-integrated commodities extending Larsson model. The futures formulae have been derived and tests have been performed with non-constant volatility. The model has been applied to energy commodities (gas, CO2, energy) and soft commodities (corn, wheat). Results show that non-constant volatility leads to more accurate short term prices, which provides better evaluation of value-at-risk and more generally improve the risk management.

Keywords: co-integration, soft commodities, risk management, value-at-risk

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Authors: Joseph Uche Azubike, Evelyn Ngozi Agbasi, M. I. Ogbonna

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The audit committee of the board of directors could no longer handle the enterprise's risks. Therefore, a risk management committee was created to control them. Thus, this study examined how enterprise risk management committee characteristics affected Nigerian exchange-listed banks' financial performance from 2013 to 2022. The study's hypotheses and three objectives were to determine how enterprise risk management committee size, composition, and gender diversity affect Nigerian banks' performance. An ex-post facto study design collected secondary data from bank annual reports. We used descriptive statistics, correlation analysis, and Ordinary least square regression to analyze panel data. Enterprise risk management committee size and composition had both negative and no significant effect on bank financial performance in Nigeria, whereas enterprise risk committee gender diversity has a 10% favorable effect. The report advises that adding more women with relevant knowledge to the risk committee to boost performance and allowing women to be at the lead of such risk management could improve bank performance in Nigeria since they are noted to be thorough in their tasks.

Keywords: bank, committee, enterprise, management, performance, risk

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Authors: Baobao Li

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Operational risk covers all operations of commercial banks and has a close relationship with the bank’s internal control. But in the commercial banks' management practice, internal control is always separated from the operational risk measurement. With the increasing of operational risk events in recent years, operational risk is paid more and more attention by regulators and banks’ managements. The paper first discussed the relationship between internal control and operational risk management and used CVaR-POT model to measure operational risk, and then put forward a modified measurement method (to use operational risk assessment results to modify the measurement results of the CVaR-POT model). The paper also analyzed the necessity and rationality of this method. The method takes into consideration the influence of internal control, improves the accuracy and effectiveness of operational risk measurement and save the economic capital for commercial banks, avoiding the drawbacks of using some mainstream models one-sidedly.

Keywords: commercial banks, internal control, operational risk, risk measurement

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Authors: Lattari Samir

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The performance of a production process is the result of proper operation where the management tools appear as the key to success through process management which consists of managing and implementing a quality policy, organizing and planning the manufacturing, and thus defining an efficient logic as the main areas covered by production management. To carry out this delicate mission, which requires reconciling often contradictory objectives, the auditor is called upon, who must be able to express an opinion on the effectiveness of the operation of the "production" function. To do this, the auditor must structure his mission in three phases, namely, the preparation phase to assimilate the particularities of this function, the implementation phase and the conclusion phase. The audit is a systematic and independent examination of all the stages of a manufacturing process intended to determine whether the pre-established arrangements for the combination of production factors are respected, whether their implementation is effective and whether they are relevant in relation to the goals.

Keywords: audit, performance of process, independent examination, management tools, audit of accounts

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Authors: Witthaya Mekhum, Waleerak Sittisom

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This research investigated the effect on occupational health safety and environment at work from metal handicraft using Rattanakosin local wisdom focusing on pollution, accidents, and injuries from work. The sample group in this study included 48 metal handicraft workers in 5 communities by using questionnaires and interview to collect data. The evaluation form TISI 18001 was used to analyze job safety analysis (JSA). The results showed that risk at work reduced after applying the developed model. Banbu Community produces alloy bowl rubbed with stone. The high risk process is melting and hitting process. Before the application, the work risk was 82.71%. After the application of the developed model, the work risk was reduced to 50.61%. Banbart Community produces monk’s food bowl. The high risk process is blow pipe welding. Before the application, the work risk was 93.59%. After the application of the developed model, the work risk was reduced to 48.14%. Bannoen Community produces circle gong. The high risk process is milling process. Before the application, the work risk was 85.18%. After the application of the developed model, the work risk was reduced to 46.91%. Teethong Community produces gold leaf. The high risk process is hitting and spreading process. Before the application, the work risk was 86.42%. After the application of the developed model, the work risk was reduced to 64.19%. Ban Changthong Community produces gold ornament. The high risk process is gold melting process. Before the application, the work risk was 67.90%. After the application of the developed model, the work risk was reduced to 37.03%. It can be concluded that with the application of the developed model, the work risk of 5 communities was reduced in the 3 main groups: (1) Work illness reduced by 16.77%; (2) Pollution from work reduced by 10.31%; (3) Accidents and injuries from work reduced by 15.62%.

Keywords: occupational health, safety, local wisdom, Rattanakosin

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Authors: K. Sekulová, M. Šimon

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The article demonstrates on a case study how it is possible to identify MSD risk. It is based on a dissertation risk identification model of occupational diseases formation in relation to the work activity that determines what risk can endanger workers who are exposed to the specific risk factors. It is evaluated based on statistical calculations. These risk factors are main cause of upper-extremities musculoskeletal disorders.

Keywords: case study, upper-extremity musculoskeletal disorders, ergonomics, risk identification

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Authors: Sijuade A. A., Oguntoye J. P., Awodoye O. O., Adedapo O. A., Wahab W. B., Okediran O. O., Omidiora E. O., Olabiyisi S. O.

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Electronic voting systems have been introduced to improve the efficiency, accuracy, and transparency of the election process in many countries around the world, including Nigeria. However, concerns have been raised about the security and integrity of these systems. One way to address these concerns is through the implementation of electronic forensic election audit systems. This study aims to evaluate voters' intention to the adoption of electronic forensic election audit systems using the Unified Theory of Acceptance and Use of Technology (UTAUT) model. In the study, the UTAUT model which is a widely used model in the field of information systems to explain the factors that influence individuals' intention to use a technology by integrating performance expectancy, effort expectancy, social influence, facilitating conditions, cost factor and privacy factor to voters’ behavioural intention was proposed. A total of 294 sample data were collected from a selected population of electorates who had at one time or the other participated in at least an electioneering process in Nigeria. The data was then analyzed statistically using Partial Least Square Structural Equation Modeling (PLS-SEM). The results obtained show that all variables have a significant effect on the electorates’ behavioral intention to adopt the development and implementation of an electronic forensic election audit system in Nigeria.

Keywords: election Audi, voters, UTAUT, performance expectancy, effort expectancy, social influence, facilitating condition social influence, facilitating conditions, cost factor, privacy factor, behavioural intention

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Authors: Richa Sinha, Mohammad Irfan Javed, Sanjay Singh

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Introduction: Good antimicrobial prescribing reduces length of stay in hospital, risk of adverse events, antimicrobial resistance, and unnecessary hospital expenditure. The aim of this prospective audit was to identify any problems with antimicrobial prescribing including documentation of the relevant aspects as well as appropriateness of antibiotics use. The audit was conducted on the surgical wards in a teaching hospital in the UK. Methods: Standards included the indication, duration, choice, and prescription of antibiotic should be in line with current Regional Guidelines and should be clearly documented on the prescription chart. There should be an entry in each patients’ medical record of the diagnosis and indication for each acute antibiotic prescription issued. All prescriptions should clearly document the route, frequency and dose of antibiotic. Data collection was done for 2 weeks in the month of March 2014. A proforma including all the questions above was completed for all the patients. The results were analysed using Excel. Results: 35 patients in total were selected for the audit. 85.7% of patients had indication of antibiotic documented on the prescription chart and 68.5% of patients had indication documented in the notes. The antibiotic used was in line with hospital guidelines in 45.7% of patients, however, in a further 28.5% of patients the reason for the antibiotic prescription was microbiology approved. Therefore, in total 74.2% of patients had been prescribed appropriate antibiotics. The duration of antibiotic was documented in 68.6% of patients and the antibiotic was reviewed in 37.1% of patients. The dose, frequency and route was documented clearly in 100% of patients. Conclusion: Overall, prescribing can be improved on the surgical wards in this hospital. Only 37.1% of patients had clear documentation of a review of antibiotics. It may be that antibiotics have been reviewed but this should be clearly highlighted on the prescription chart or the notes. Failure to review antibiotics can lead to poor patient care and antimicrobial resistance and therefore it is important to address this. It is also important to address the appropriateness of antibiotics as inappropriate antibiotic prescription can lead to failure of treatment as well as antimicrobial resistance. The good points from the audit was that all patients had clear documentation of dose, route and frequency which is extremely important in the administration of antibiotics. Recommendations from this audit included to emphasize good antimicrobial prescribing at induction (twice yearly), an antimicrobial handbook for junior doctors, and re-audit in 6 months time.

Keywords: prescribing, antimicrobial, indication, duration

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Authors: Charles Amoo, Joshua New, Bill Eckman

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Buildings in the United States account for a significant proportion of energy consumption and greenhouse gas (GHG) emissions, and this trend is expected to continue as well as rise in the near future. Low-income households, in particular, bear a disproportionate burden of high building energy consumption and spending due to high energy costs. Energy efficiency improvements need to reach an average of 4% per year in this decade in order to meet global net zero emissions target by 2050, but less than 1 % of U.S. buildings are improved each year. The government has recognized the importance of technology in addressing this issue, and energy efficiency programs have been developed to tackle the problem. The Weatherization Assistance Program (WAP), the largest residential whole-house energy efficiency program in the U.S., is specifically designed to reduce energy costs for low-income households. Under the WAP, energy auditors must follow specific audit procedures and use Department of Energy (DOE) approved energy audit tools or software. This article proposes an expanded framework of factors that should be considered in energy audit software that is approved for use in energy efficiency programs, particularly for low-income households. The framework includes more than 50 factors organized under 14 assessment criteria and can be used to qualitatively and quantitatively score different energy audit software to determine their suitability for specific energy efficiency programs. While the tool can be useful for developers to build new tools and improve existing software, as well as for energy efficiency program administrators to approve or certify tools for use, there are limitations to the model, such as the lack of flexibility that allows continuous scoring to accommodate variability and subjectivity. These limitations can be addressed by using aggregate scores of each criterion as weights that could be combined with value function and direct rating scores in a multicriteria decision analysis for a more flexible scoring.

Keywords: buildings, energy efficiency, energy audit, software

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Authors: M. Sulieman, H. Arabiyat, H. Ali, K. Potiszil, I. Abbas, R. English, P. King, I. Brown, P. Drew

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Introduction: The incidence of breast ductal Carcinoma in Situ (DCIS) has been increasing; it currently represents up 20-25% of all breast carcinomas. Some aspects of DCIS management are still controversial, mainly due to the heterogeneity of its clinical presentation and of its biological and pathological characteristics. In DCIS, histological diagnosis obtained preoperatively, carries the risk of sampling error if the presence of invasive cancer is subsequently diagnosed. The mammographic extent over than 4–5 cm and the presence of architectural distortion, focal asymmetric density or mass on mammography are proven important risk factors of preoperative histological under staging. Intracystic papillary cancer (IPC) is a rare form of breast carcinoma. Despite being previously compared to DCIS it has been shown to present histologically with invasion of the basement membrane and even metastasis. SLNB – Carries the risk of associated comorbidity that should be considered when planning surgery for DCIS and IPC. Objectives: The aim of this Audit was to better define a ‘high risk’ group of patients with pre-op diagnosis of non-invasive cancer undergoing breast conserving surgery, who would benefit from sentinel node biopsy. Method: Retrospective data collection of all patients with ductal carcinoma in situ over 5 years. 636 patients identified, and after exclusion criteria applied: 394 patients were included. High risk defined as: Extensive micro-calcification >40mm OR any mass forming DCIS. IPC: Winpath search from for the term ‘papillary carcinoma’ in any breast specimen for 5 years duration;.29 patients were included in this group. Results: DCIS: 188 deemed high risk due to >40mm calcification or a mass forming (radiological or palpable) 61% of those had a mastectomy and 32% BCS. Overall, in that high-risk group - the number with invasive disease was 38%. Of those high-risk DCIS pts 85% had a SLN - 80% at the time of surgery and 5% at a second operation. For the BCS patients - 42% had SLN at time of surgery and 13% (8 patients) at a second operation. 15 (7.9%) pts in the high-risk group had a positive SLNB, 11 having a mastectomy and 4 having BCS. IPC: The provisional diagnosis of encysted papillary carcinoma is upgraded to an invasive carcinoma on final histology in around a third of cases. This has may have implications when deciding whether to offer sentinel node removal at the time of therapeutic surgery. Conclusions: We have defined a ‘high risk’ group of pts with pre-op diagnosis of non-invasive cancer undergoing BCS, who would benefit from SLNB at the time of the surgery. In patients with high-risk features; the risk of invasive disease is up to 40% but the risk of nodal involvement is approximately 8%. The risk of morbidity from SLN is up to about 5% especially the risk of lymphedema.

Keywords: breast ductal carcinoma in Situ (DCIS), intracystic papillary carcinoma (IPC), sentinel node biopsy (SLNB), high-risk, non-invasive, cancer disease

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Authors: Anxuan Xie, Chun-Chan Yu

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Survey evidence provides support that auditors can gain professional knowledge not only from client firms but also from teammates they work with. Furthermore, given that knowledge is accumulated in nature, along with the reality that auditors today must work in an environment of increased diversity, whether the attributes of teammates will influence the effects of knowledge sharing and accumulation and ultimately influence an audit partner’s audit quality should be interesting research issues. We test whether the gender of co-signers will moderate the effect of a lead partner’s cooperative experiences on financial restatements. Furthermore, if the answer is “yes”, we further investigate the underlying reasons. We use data from Taiwan because, according to Taiwan’s law, engagement partners, who are basically two certificate public accountants from the same audit firm, are required to disclose (i.e., sign) their names in the audit report of public companies since 1983. Therefore, we can trace each engagement partner’s historic direct cooperative (co-signing) records and get large-sample data. We find that the benefits of knowledge sharing manifest primarily via co-signing audit reports with audit partners of different gender from the lead engagement partners, supporting the argument that in an audit setting, accumulated gender-diverse working relationship is positively associated with knowledge sharing, and therefore improve lead engagements’ audit quality. This study contributes to the extant literature in the following ways. First, we provide evidence that in the auditing setting, the experiences accumulated from cooperating with teammates of a different gender from the lead partner can improve audit quality. Given that most studies find evidence of negative effects of surface-level diversity on team performance, the results of this study support the prior literature that the association between diversity and knowledge sharing actually hinges on the context (e.g., organizational culture, task complexity) and “bridge” (a pre-existing commonality among team members that can smooth the process of diversity toward favorable results) among diversity team members. Second, this study also provides practical insights with respect to the audit firms’ policy of knowledge sharing and deployment of engagement partners. For example, for audit firms that appreciate the merits of knowledge sharing, the deployment of auditors of different gender within an audit team can help auditors accumulate audit-related knowledge, which will further benefit the future performance of those audit firms. Moreover, nowadays, client firms also attach importance to the diversity of their engagement partners. As their policy goals, lawmakers and regulators also continue to promote a gender-diverse working environment. The findings of this study indicate that for audit firms, gender diversity will not be just a means to cater to those groups. Third, for audit committees or other stakeholders, they can evaluate the quality of existing (or potential) lead partners by tracking their co-signing experiences, especially whether they have gender-diverse co-signing experiences.

Keywords: co-signing experiences, audit quality, knowledge sharing, gender diversity

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Authors: E. Cenderelli, E. Bruno, G. Iacoviello, A. Lazzini

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The financial sector is exposed to the risk of cyber-attacks like any other industrial sector. Furthermore, the topic of CybeRisk (cyber risk) has become particularly relevant given that Information Technology (IT) attacks have increased drastically in recent years, and cannot be stopped by single organizations requiring a response at international and national level. IT risk is never a matter purely for the IT manager, although he clearly plays a key role. A bank's risk management function requires a thorough understanding of the evolving risks as well as the tools and practical techniques available to address them. Upon the request of European and national legislation regarding CybeRisk in the financial system, banks are therefore called upon to strengthen the operational model for CybeRisk management. This will require an important change with a more intense collaboration with the structures that deal with information security for the development of an ad hoc system for the evaluation and control of this type of risk. The aim of the work is to propose a framework for the management and control of CybeRisk that will bridge the gap in the literature regarding the understanding and consideration of CybeRisk as an integral part of business management. The IT function has a strong relevance in the management of CybeRisk, which is perceived mainly as operational risk, but with a positive tendency on the part of risk management to the identification of CybeRisk assessment methods that are increasingly complete, quantitative and able to better describe the possible impacts on the business. The paper provides answers to the research questions: Is it possible to define a CybeRisk governance structure able to support the comparison between risk and security? How can the relationships between IT assets be integrated into a cyberisk assessment framework to guarantee a system of protection and risks control? From a methodological point of view, this research uses a case study approach. The choice of “Monte dei Paschi di Siena” was determined by the specific features of one of Italy’s biggest lenders. It is chosen to use an intensive research strategy: an in-depth study of reality. The case study methodology is an empirical approach to explore a complex and current phenomenon that develops over time. The use of cases has also the advantage of allowing the deepening of aspects concerning the "how" and "why" of contemporary events, on which the scholar has little control. The research bases on quantitative data and qualitative information obtained through semi-structured interviews of an open-ended nature and questionnaires to directors, members of the audit committee, risk, IT and compliance managers, and those responsible for internal audit function and anti-money laundering. The added value of the paper can be seen in the development of a framework based on a mapping of IT assets from which it is possible to identify their relationships for purposes of a more effective management and control of cyber risk.

Keywords: bank, CybeRisk, information technology, risk management

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Authors: Gregory Michael McMahon

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Risk management for the purposes of minimizing the damages from the operations of dams has met with opposition emerging from organisations and authorities, and their practitioners. It appears that the cause may be a misunderstanding of risk management arising from exchanges that mix deterministic thinking with risk-centric thinking and that do not separate uncertainty from reliability and accuracy from probability. This paper sets out those misunderstandings that arose from dam operations at Wivenhoe in 2011, using a comparison of outcomes that have been based on the methodology and its rules and those that have been operated by applying misunderstandings of the rules. The paper addresses the performance of one risk-centric Flood Manual for Wivenhoe Dam in achieving a risk management outcome. A mixture of engineering, administrative, and legal factors appear to have combined to reduce the outcomes from the risk approach. These are described. The findings are that a risk-centric Manual may need to assist administrations in the conduct of scenario training regimes, in responding to healthy audit reporting, and in the development of decision-support systems. The principal assistance needed from the Manual, however, is to assist engineering and the law to a good understanding of how risks are managed – do not assume that risk management is understood. The wider findings are that the critical profession for decision-making downstream of the meteorologist is not dam engineering or hydrology, or hydraulics; it is risk management. Risk management will provide the minimum flood damage outcome where actual rainfalls match or exceed forecasts of rainfalls, that therefore risk management will provide the best approach for the likely history of flooding in the life of a dam, and provisions made for worst cases may be state of the art in risk management. The principal conclusion is the need for training in both risk management as a discipline and also in the application of risk management rules to particular dam operational scenarios.

Keywords: risk management, flood control, dam operations, deterministic thinking

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Authors: Ritsuko Kawasaki (Aiba), Takeshi Hiromatsu

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Management is required to understand all information security risks within an organization, and to make decisions on which information security risks should be treated in what level by allocating how much amount of cost. However, such decision-making is not usually easy, because various measures for risk treatment must be selected with the suitable application levels. In addition, some measures may have objectives conflicting with each other. It also makes the selection difficult. Moreover, risks generally have trends and it also should be considered in risk treatment. Therefore, this paper provides the extension of the model proposed in the previous study. The original model supports the selection of measures by applying a combination of weighted average method and goal programming method for multi-objective analysis to find an optimal solution. The extended model includes the notion of weights to the risks, and the larger weight means the priority of the risk.

Keywords: information security risk treatment, selection of risk measures, risk acceptance, multi-objective optimization

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Authors: Mike Tsionas

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The paper develops new indices of financial stability based on an explicit model of expected utility maximization by financial institutions subject to the classical technology restrictions of neoclassical production theory. The model can be estimated using standard econometric techniques, like GMM for dynamic panel data and latent factor analysis for the estimation of co-variance matrices. An explicit functional form for the utility function is not needed and we show how measures of risk aversion and prudence (downside risk aversion) can be derived and estimated from the model. The model is estimated using data for Eurozone countries and we focus particularly on (i) the use of the modeling approach as an “early warning mechanism”, (ii) the bank- and country-specific estimates of risk aversion and prudence (downside risk aversion), and (iii) the derivation of a generalized measure of risk that relies on loan-price uncertainty.

Keywords: financial stability, banking, expected utility maximization, sub-prime crisis, financial crisis, eurozone, PIIGS

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Authors: Liam Martin, Martha Watson

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Patients with learning disabilities (LD) are at increased risk of physical and mental illness due to health inequality. To address this, NICE recommends that people from the age of 14 with a learning disability should have an annual LD health check. This consultation should include a holistic review of the patient’s physical, mental and social health needs with a view of creating an action plan to support the patient’s care. The expected standard set by the Quality and Outcomes Framework (QOF) is that each general practice should review at least 75% of their LD patients annually. During COVID-19, there have been barriers to primary care, including health anxiety, the shift to online general practice and the increase in GP workloads. A surgery in North London wanted to assess whether they were falling short of the expected standard for LD patient annual reviews in order to optimize care post Covid-19. A baseline audit was completed to assess how many LD patients were receiving their annual reviews over the period of 29th September 2020 to 29th September 2021. This information was accessed using EMIS Web Health Care System (EMIS). Patients included were aged 14 and over as per QOF standards. Doctors were not notified of this audit taking place. Following the results of this audit, the creation of learning disability clinics was recommended. These clinics were recommended to be on the ground floor and should be a dedicated time for LD reviews. A re-audit was performed via the same process 6 months later in March 2022. At the time of the baseline audit, there were 71 patients aged 14 and over that were on the LD register. 54% of these LD patients were found to have documentation of an annual LD review within the last 12 months. None of the LD patients between the ages of 14-18 years old had received their annual review. The results were discussed with the practice, and dedicated clinics were set up to review their LD patients. A second pass of the audit was completed 6 months later. This showed an improvement, with 84% of the LD patients registered at the surgery now having a documented annual review within the last 12 months. 78% of the patients between the ages of 14-18 years old had now been reviewed. The baseline audit revealed that the practice was not meeting the expected standard for LD patient’s annual health checks as outlined by QOF, with the most neglected patients being between the ages of 14-18. Identification and awareness of this vulnerable cohort is important to ensure measures can be put into place to support their physical, mental and social wellbeing. Other practices could consider an audit of their annual LD health checks to make sure they are practicing within QOF standards, and if there is a shortfall, they could consider implementing similar actions as used here; dedicated clinics for LD patient reviews.

Keywords: COVID-19, learning disability, learning disability health review, quality and outcomes framework

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Authors: R. Monteiro, A. Abarca

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Large scale seismic risk assessment has become increasingly popular to evaluate the physical vulnerability of a given region to seismic events, by putting together hazard, exposure and vulnerability components. This study, developed within the scope of the EU-funded project ITERATE (Improved Tools for Disaster Risk Mitigation in Algeria), explains the steps and expected results for the development of an integrated seismic risk model for assessment of the vulnerability of residential buildings in Northern Algeria. For this purpose, the model foresees the consideration of an updated seismic hazard model, as well as ad-hoc exposure and physical vulnerability models for local residential buildings. The first results of this endeavor, such as the hazard model and a specific taxonomy to be used for the exposure and fragility components of the model are presented, using as starting point the province of Blida, in Algeria. Specific remarks and conclusions regarding the characteristics of the Northern Algerian in-built are then made based on these results.

Keywords: Northern Algeria, risk, seismic hazard, vulnerability

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Authors: Kelly Grani Yuen

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Accounting scandals and auditing frauds are perceived to be driven by aggressive companies and misrepresentation of audit reports. However, local legal systems and law enforcements may affect the services auditors provide to their ‘important’ clients. Under the civil law and common law jurisdictions, the standard setters, the government, and the regulatory bodies treat cases differently. As such, whether or not different forms of legal systems and extent of law enforcement plays an important role in auditor’s Audit Quality is a question this paper attempts to explore. The paper focuses on the investigation in Asia, where Hong Kong represents the common-law jurisdiction, while Taiwan and China represent the civil law jurisdiction. Only the ten reputable accounting firms are used in this study due to the differences in rankings and establishments of some of the small local audit firms. This will also contribute to the data collected between the years 2007-2013. By focusing on the use of multiple regression based on the dependent (Audit Quality) and independent variables (Client Importance, Law Enforcement, and Press Freedom), six different models are established. Results demonstrate that since different jurisdictions have different legal systems and market regulations, auditor’s treatment on ‘important’ clients will vary. However, with the moderators in place (law enforcement and press freedom), the relationship between client importance and audit quality may be smoothed out. With that in mind, this study contributes to local governments and standard setters’ consideration on legal reform and proper law enforcement in the market. Perhaps, with such modifications on the economic systems, collusion between companies and auditors can finally be put to a halt.

Keywords: audit quality, client importance, jurisdiction, modified audit opinions

Procedia PDF Downloads 396

Authors: Muhammad Wasif, Asif Ahmed Shaikh, Sarosh Hashmat Lodi, Muhammad Aslam Bhutto, Riazuddin

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Risk Management System is quite popular in profit- based organizations, health and safety and project management fields since the last few decades. But due to rapidly changing environment and requirement of ISO 9001:2015 standards, public-sector institution, especially higher education institutes are also performing risk assessment to monitor the performance of the institution and aligning it with the latest benchmark. In this context, NED University of Engineering and Technology performed research and developed a Standard Operating Procedure (SOP) for the risk assessment, its monitoring and control. In this research, risks are broken into the four sources, namely; Internal Academics Risks, External Academics Risks, Internal Non-academic Risks, External Non-academic Risks. Risks are identified by the management at all levels. Severity and likelihood of the risks are assigned based on the previous audit results and the customer complains. Risk Ratings are calculated to orderly arrange the risk according to the Risk Rating, and controls for the risks are designed, which are assigned to the responsible person. At the end of the article, result and analysis on the different sources of risk are discussed in details and the conclusion is drawn. Discussion on few sample risks are presented in this article. Hence it is presented in the research that the Risk Management System can be applied in a Higher Education Institute to effectively control the risks which might affect the scope and Quality Management System of an organization.

Keywords: higher education, quality management system, risk assessment, risk management

Procedia PDF Downloads 276

Authors: Mark Jason E. Arca, Jay Vee R. Linatoc, Rex Francis N. Lupango, Michael Joe A. Ramirez

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Participation promises an avenue for citizens to take part in governance, but it does not necessarily mean effective participation. The proper integration of participants in the decision-making process should be properly addressed to ensure effectiveness. This study explores the integration of the participants in the decision-making process to reveal the level of participation in the Solid Waste Management audit done by the Citizen Participatory Audit (CPA), a program under the supervision of the Commission on Audit. Specifically, this study will use the experience of participation to identify emerging themes that will help reveal the level of participation through the integrated ladder of participation. The researchers used key informant interviews to gather necessary data from the actors of the program. The findings revealed that the level of participation present in the CPA is at the Placation level, a level below the program’s targeted level of participation. The study also allowed the researchers to reveal facilitating factors in the program that contributed to a better understanding of the practice of participation.

Keywords: citizen participation, culture of participation, ladder of participation, level of participation

Procedia PDF Downloads 380

Authors: Abhijitsinh Gohil, Kaushal Wadhvaniya, Kuldipsinh Jadeja

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Road Safety is a multi-sectoral and multi-dimensional issue. An effective model can assess the risk associated with highway safety. A questionnaire survey is very essential to identify the events or activities which are causing unsafe condition for traffic on an urban highway. A questionnaire of standard questions including vehicular, human and infrastructure characteristics can be made. Responses from the age wise group of road users can be taken on field. Each question or an event holds a specific risk weightage, which contributes in creating an inappropriate and unsafe flow of traffic. The probability of occurrence of an event can be calculated from the data collected from the road users. Finally, the risk score can be calculated by considering the risk factor and the probability of occurrence of individual event and addition of all risk score for the individual event will give the total risk score of a particular road. Standards for risk score can be made and total risk score can be compared with the standards. Thus road can be categorized based on risk associated and traffic safety on it. With this model, one can assess the need for traffic safety improvement on a given road, and qualitative data can be analysed.

Keywords: probability of occurrence, questionnaire, risk factor, risk score

Procedia PDF Downloads 319

Authors: Philna Coetzee, Clara Msiza

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In modern society, audit committees are seen as the custodians of accountability and the conscience of management and the board. But who holds the audit committee accountable for their actions or non-actions and how do we know what they are supposed to be doing and what they are doing? The purpose of this article is to provide greater insight into the latter part of this problem, namely, determine what best practises for audit committees and the disclosure of what is the realities are. In countries where governance is well established, the roles and responsibilities of the audit committee are mostly clearly guided by legislation and/or guidance documents, with countries increasingly providing guidance on this topic. With high cost involved to adhere to governance guidelines, the public (for public organisations) and shareholders (for private organisations) expect to see the value of their ‘investment’. For audit committees, the dividends on the investment should reflect in less fraudulent activities, less corruption, higher efficiency and effectiveness, improved social and environmental impact, and increased profits, to name a few. If this is not the case (which is reflected in the number of fraudulent activities in both the private and the public sector), stakeholders have the right to ask: where was the audit committee? Therefore, the objective of this article is to contribute to the body of knowledge by comparing the adherence of audit committee to best practices guidelines as stipulated in the King Report across public listed companies, national and provincial government departments, state-owned enterprises and local municipalities. After constructs were formed, based on the literature, factor analyses were conducted to reduce the number of variables in each construct. Thereafter, cluster analyses, which is an explorative analysis technique that classifies a set of objects in such a way that objects that are more similar are grouped into the same group, were conducted. The SPSS TwoStep Clustering Component was used, being capable of handling both continuous and categorical variables. In the first step, a pre-clustering procedure clusters the objects into small sub-clusters, after which it clusters these sub-clusters into the desired number of clusters. The cluster analyses were conducted for each construct and the measure, namely the audit opinion as listed in the external audit report, were included. Analysing 228 organisations' information, the results indicate that there is a clear distinction between the four spheres of business that has been included in the analyses, indicating certain strengths and certain weaknesses within each sphere. The results may provide the overseers of audit committees’ insight into where a specific sector’s strengths and weaknesses lie. Audit committee chairs will be able to improve the areas where their audit committee is lacking behind. The strengthening of audit committees should result in an improvement of the accountability of boards, leading to less fraud and corruption.

Keywords: audit committee disclosure, cluster analyses, governance best practices, strengths and weaknesses

Procedia PDF Downloads 138

Authors: M. Ndaw, G. Mendy, S. Ouya

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Information system risk management helps to reduce or eliminate risk by implementing appropriate controls. In this paper, we propose a quantification model of controls impact on information system risks by automatizing the residual criticality estimation step of FMECA which is based on a inductive reasoning. For this, we defined three equations based on type and maturity of controls. For testing, the values obtained with the model were compared to estimated values given by interlocutors during different working sessions and the result is satisfactory. This model allows an optimal assessment of controls maturity and facilitates risk analysis of information system.

Keywords: information system, risk, control, FMECA method

Procedia PDF Downloads 333