Categories
31 Days to More Effective Compliance Programs

One Month to More Effective Internal Controls – Assessing for Internal Controls in International Operations

How should you assess your internal controls regime for international operations? It is incumbent that you need to review as much information as you can to understand an entity’s financial and operational structure and how it is integrated with the corporate headquarters or the U.S. business unit’s financial and operational structure if the foreign operation is part of a U.S. business unit.

You could begin with the TI-CPI to garner a sense of the reputation of the country in which your business unit is located, as well as the CPI for all other countries in which the location either markets business or has current customers. Another area for inquiry or review is the scope of your foreign operations. Other areas of inquiry should include whether your company’s finance and accounting staff produce financial statements that are integrated into the parent’s financial statements, whether your international business locations utilize a local bank account for local sales receipts as well as funds transfers from the U.S. and whether the account has local check signers and whether dual signatures are required on the checks. You may also want to consider the extent to which disbursements are made in the local currency and whether there is a local petty cash fund.

As with many other areas around internal controls, it is important to consider the local DOA and whether it is consistent with your corporate DOA. Some of the considerations regarding the local DOA should extend to which corporate or U.S. business unit approvals are required for transactions initiated locally, such as 1) approval of vendor invoices; 2) disbursements of funds, including wire transfers; 3) execution of facilities leases; 4) execution of contracts with agents; and 5) approval of pricing and credit terms to customers and distributors. You should also review whether the local DOA provides appropriate SODs at the local business unit level.

These reviews, questions, inquiries, and analyses are designed to locate the pressure points involved in any company’s sales processes. This is because pressure is a key element of occupational fraud, and the risk of fraud, including corruption, increases as the pressure increases. Since corruption is viewed as a subset of fraud, it might be a good time to review the “fraud triangle,” which lays out a breeding ground for fraud in the corruption context.

 Three key takeaways:

1. You must understand your company’s financial and operational structure and how that structure outside the U.S. is integrated with the corporate headquarters.

2. Are your financial statements and reporting systems integrated?

3. Always consider the fraud triangle.

Categories
Innovation in Compliance

Key Board Issues Going Forward with Christina Bresani

What are some of the challenges facing board members in providing meaningful oversight? Christina Bresani, head of William Blair’s Corporate Advisory Team, is here to share her take. Host Tom Fox and Christina are going to delve into the current state of the corporate world, touching on the challenges faced by boards of directors. They’ll also discuss the increase of unsolicited offers and the importance of being prepared for them. This is a thought-provoking conversation that will shed light on the current landscape of the corporate world.

Christina Bresani is a seasoned investment banker with over 25 years of experience. She joined UBS right after graduation from Wellesley College where she studied economics and Spanish. After 20 years at UBS, she joined William Blair and currently leads the Corporate Advisory Team, a team that focuses on advising public companies on all things mergers and acquisitions.

 

Key points you’ll hear them discuss:

  • Christina tells Tom, “About 85% of the transactions that we’re seeing right now start with an unsolicited proposal.” They are advising clients on being prepared for unsolicited proposals and valuations in an uncertain market.
  • How William Blair works with clients to optimize their portfolio and their process for evaluating selling or spinning off businesses.
  • ESG is a focus area for boards. It’s now considered a “must-have” and not a “nice-to-have”. Boards and management teams focus on ESG as a day-to-day part of their decision-making process. Christina is happy to see companies take a more holistic oversight around ESG at the board level.
  • There has been an increase in shareholder activism and companies are worried about it and seeking help in preparing for it.
  • “Ultimately, what companies need to be thinking about is how to create shareholder value,” Christina tells listeners. This is what should be top of mind for boards going forward, she remarks.

 

KEY QUOTE:

“There are always intertwined relationships between boards and companies, and the real goal is to get all the brains together in a room to figure out if a deal makes sense for both sets of shareholders.” – Christina Bersani

 

Resources

Christina Bresani on LinkedIn

 

Categories
Everything Compliance - Shout Outs and Rants

Everything Compliance – Episode 111, Shout Outs and Rants

Welcome to the only roundtable podcast in compliance as we celebrate our second century of shows with our fan-fav Shout Outs and Rants section.

1. Matt Kelly shouts out to the State of Texas Legislature for creating a ‘Gold Card’ for physicians who have over 90% of all requested procedures covered by insurance.

2. Jonathan Marks rants about the Pentagon’s failure to shoot down a Chinese spy balloon.

3. Tom Fox shouts out to Hindenburg Research and all other short sellers who help uncover fraud, waste, and abuse.

4. Karen Woody shouts out to Amtrak and asks us all to ‘ride the train more often.’

5. Jay Rosen shouts out his twin daughters on their 15th birthday.

Categories
Daily Compliance News

February 7, 2023 – The Spotting Ponzi Schemes Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen to the Daily Compliance News. All from the Compliance Podcast Network. Each day we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Stories we are following in today’s edition of Daily Compliance News:

  • FTX judge considers independent investigation. (Reuters)
  • Chinese soccer is under corruption scrutiny. (Global Times)
  • 7 ways to spot a Ponzi scheme. (WaPo)
  • How to build successful sustainability programs. (WSJ)