Are we secure?

Taking proactive steps when it comes to security issues to ensure day-to-day safety is the best approach in managing security risks in the workplace.  Just like our own homes, we all want our office to be safe and secure.  But we tend to be more lax when it comes to securing our workplace. Maybe because most of us assume that it’s someone else’s responsibility.  Again, risk management is everyone’s responsibility.

Below are the 5 basic tips I want to share with you on how can we start securing our workplaces.

Keep track of personnel.  Visitors and guests should be properly registered and should be provided with visitor’s pass. If you happen to see unfamiliar persons such as visitors walking through your office, try to determine who they are visiting by asking them if they need assistance.

Secure your access keys.  Do not share access cards or keys with anyone. Every employee has his own access card. Do not let anyone into the office with your access card after office hours.

Keep the door closed. Doors, especially those leading to restricted areas, must be closed at all times in order to prevent unauthorized persons from entering the premises.  If you happen to find a door open after office hours, close it.

Keep an eye on your valuables.  Secure all your valuables. Protect the confidentiality of the files you are processing or  storing. Make it out of sight and locked.  Utilize your drawers and file cabinets, if possible.

The relationship of Control Risk and Detection Risk

(A fellow forumer/member at PinoyCPA.com PMed me about the relationship of control risk and detection risk and I wanna share it with you guys. Below is my response to her. I hope this will help)

There is an inverse relationship between control risk and detection risk. How? Let me state an example.

Audi is the auditor of Timang Corp. for the period ended December 31, 2010. He prepared the audit program that will guide him in his audit of the said Company. He judged that the audit objectives can be effectively and efficiently be achieved by following the control approach instead of the substantive approach. Control Approach is the audit approach that evaluates the controls over significant accounts in the financial statements being audited. This is usually done by the auditor if he judged, based on his planning and preliminary assessment, that the controls can be relied upon.

Now, his metholody of pursuing an audit with a control approach will definitely involve control risk assessment. Control risk is the risk that internal controls may fail thereby causing a material misstatement in the financial statements. Control Risk is usually classified as low, moderate and high. Control risk is the risk which the auditor cannot control. It is under the control and jurisdiction of the entity. So how do the auditor tackle this issue? What can he do? He can modify the nature, timing and extent of other testing procedures which has an effect in the detection risk.

Detection risk is the risk that a misstatement in the financial statements cannot be detected by the auditor. So if the Detection Risk is high, it means that the auditor is willing to accept higher probabilities that he cannot detect the said misstatements. Why is he willing to do that? Well, it's because he found out that the controls are effective (meaning, control risk is low). Thus, if the Detection Risk is high, control risk is low.

Now, what if the control risk is High? Then, the auditor now assumes a greater responsibility to detect the misstatements that were not captured by the controls (kasi nga control risk is High. meaning, the controls are not operating effectively). By doing so, Detection Risk by the auditor is minimized.

Parang ganito lang yan. Halimbawa meron kang manliligaw. Meron ka ring dalawang bestfriends. Si bestfriend A ay kilala mong mabusisi at may good taste sa mga bagay-bagay (so it means, katiwa-tiwala siya so meron siyang "low" na control risk). Si Bestfriend B naman ay yung tipo ng kaibigan na kunsintidor at hindi very particular sayo (meron siyang "high" na control risk). Kinunsulta mo sila tungkol sa manliligaw mo. sabi ni A, di raw ok sa kanya si manliligaw. pero ok naman siya kay B. So sino ang pniniwalaan mo? most likely si A diba? kasi mas may tiwala ka sa kanya (low controls risk ika nga). so di ka kampante ka kaya di ka willing ka mag-assume ng risk na sagutin si manliligaw (mataas ang detection risk mo kasi careful ka).

Now kung pinakinggan mo si B (na may "high" control risk), medyo alangan ka kasi nga di maganda ang judgment niya sa mga bagay-bagay base sa pagkakakilala mo sa kanya. so willing kang mag-evaluate further (which means mababa ang detection risk na willing kang i-accept).

gets na ba?

So you got your license, what’s next?

Today another batch of newly-passed Certified Public Accountants (CPA) is about to take their oath.  The number is the biggest, so far, in the history of the notorious board exams.  A lot of them might be asking what will happen next?  Let me give my insights.

Life after the board exams is the most difficult part. This is the stage where you are about to take full responsibility for your future. It’s a continuous make or break decision-making process beginning from what first job you want to have up to the point of your retirement.

This is where the multitude of aspirations begin – career, money, family, social standing and relationships.

Most of the newly-passed CPAs tend to jump into Big 4 audit firms. A big number wants to have a career-start by joining commerce and industry by joining multinational companies. Some pursue further studies such as law. Some are confused on what career path to take.  Be it noted that there are no good and bad decisions. Failure to make a decision is what actually constitutes a “bad decision”.

My suggestions are the following:

Know yourself. Know what you really want out of your life and plan it meticulously. Usually, it will take you around 5 years before you really know what you really want. You will be experiencing quarter-life crisis so be prepared. Being a CPA does not guarantee automatic success. It’ll only equip you to move towards that goal.

Have a good mentor. You can find them in the workplace, in social clubs, professional organizations, sites like PCPA and even on the least expected places. Mentors will be just there as your guide to places you want to go and be the person you want to be.

Network, network and network. We are a service-oriented profession. We deal with people and their businesses. Increasing our network means increasing our exposures and opportunities.

Be clean and honest. There’s no substitute for integrity. If you notice, the “lagay” and “padrino” system starts to weaken as changes and initiatives are being introduced. We are moving towards a socially responsible economy and a public partnership system. The scandals, crises and fiascos of past were the sources of the lessons learned.

Keep updated with the latest in your industry and specialization. Our skills and knowledge base must be intact and updated. The name of the game in today’s competition is “information”. Whoever has the latest and accurate information possesses the key to growth.

Last but not the least, help our country. Our knowledge, skills, and our licenses wouldn’t be possible if not for our motherland, the Philippines. As CPAs, we are the finance managers of this country. The economic progress depends on our decisions and actions. If we will succeed together as individuals, our country also succeeds.

Welcome to the real world, colleagues!

Enron's last man standing pleads 'Guilty'

Rex Shelby, a former Enron Broadband Services executive, pleaded guilty to one count of insider trading. According to Shelby’s lawyer, Ed Tomko, “[t]his ends Enron, because Rex was the very last Enron defendant standing from prosecutions that resulted from the company’s bankruptcy.”

Bloomberg reports that prosecutors agreed to drop the remaining conspiracy, securities fraud and other insider trading charges against Shelby in exchange for his plea. Shelby may serve up to six months in a halfway house, plus six months’ house arrest. He also agreed to forfeit about $2.5 million.

In 2003, Shelby and six other ex-Enron Broadband executives were charged with misleading investors about Enron Broadband’s prospects. Bloomberg reports that prosecutors alleged that while the defendants told analysts and investors that the division might be worth as much as $40 billion, in fact it was struggling and never made money.

However, although two of the indicted pleaded guilty before trial, none of the remaining five were convicted at the subsequent trial. Faced with the prospect of retrials, Bloomberg reports that

•Shelby pleaded guilty to one count yesterday.

•Former CEO Joseph Hirko pleaded guilty to a reduced charge in late 2008

•Strategy chief F. Scott Yeager won a ruling from the U.S. Supreme Court that he could not be retried because of his partial acquittal at the first trial.

•Senior accountant Michael Krautz was retried and acquitted in 2006.

•Finance chief Kevin Howard was retried in 2006 and convicted, but his conviction was later overturned. Howard ultimately pleaded guilty to reduced charges in June 2009 to avoid a third trial.

(Source: Compliance Week)