COSO Internal Control - Integrated Framework

In November 2010, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) announced a project to review and update the 1992 Internal Control - Integrated Framework. COSO’s goal in updating the framework is to increase its relevance in the increasingly complex and global business environment so that organizations worldwide can better design, implement and assess internal control.

COSO engaged PwC as author of the update. In turn, PwC received valuable input from the Advisory Council and other stakeholders. The proposed Framework retains the core definition of internal control and the five components of internal control. A significant enhancement is the expression of concepts described in the original framework as 17 principles, accompanied by related attributes. These principles and attributes should assist organizations as they apply judgment in improving performance and managing risk in changing business and operating environments.

This Framework will provide organizations with significant benefits – for example, by increasing confidence that controls mitigate risks to acceptable levels and by providing reliable information to support sound decision-making. Furthermore, because the definition of internal control and its five underlying components are not changing, the codification of the principles and attributes will not impose additional burdens or a higher threshold for designing and maintaining an effective system of internal control.

COSO is now seeking feedback comments on the proposed Internal Control - Integrated Framework. A series of questions are included in the exposure draft for consideration by participants. The comment period closes March 31, 2012.

Announcing the Investis Online IR Rankings

Investis Online IR Rankings, a unique free feature, aims to help investor relations professionals identify companies that are international leaders in online IR communications. The initial rankings cover major international stock exchanges, including the S&P 100 index of the largest US companies, the FTSE 100 of the largest UK-listed companies, the DAX index of blue chip German companies, the Italian FTSE MIB index, and Finland’s OMXH 25. New indexes will be added in future quarterly updates to eventually cover about 800 companies, which will be reviewed twice per year.

The evaluations are conducted by Investis, a leading corporate website service provider based in London, and validated through random sampling by IR Web Report. Investis has been evaluating corporate websites for its IQ Benchmarking service since 2008. The Online IR Rankings are an offshoot of its corporate website rankings and use an IR-focused scoring system devised by IR Web Report. For more information, see the October 25, 2011 posting “Introducing the Investis Online IR Rankings” by Dominic Jones at IR Web Report online.

Six Key Trends that are Shaping the Business World

A 2011 Ernst & Young report Tracking Global Trends looks at six broad, long-term developments that are shaping our world. Key trends include: Emerging markets increase their global power; Cleantech becomes a competitive advantage; Global banking seeks recovery through transformation; Governments enhance ties with the private sector; Rapid technology innovation creates a smart, mobile world; and Demographic shifts transform the global workforce.

The three underlying drivers that have helped establish and perpetuate these trends are:

1. Demographic shifts. Population growth, increased urbanization, a widening divide between countries with youthful and quickly aging populations and a rapidly growing middle class are reshaping the business world and society as a whole.
2. Reshaped global power structure. As the world recovers from the recession, the rise of relationships between the public and private sectors has shifted the balance of global power faster than most could have imagined just a few years ago.
3. Disruptive innovation. Innovations in technology continue to have massive effects on business and society. Emerging markets are now becoming hotbeds of innovation, especially in efforts to reach the growing middle class and low-income consumers around the globe.

About the Global Accounting Alliance

The Global Accounting Alliance (GAA) comprises 11 of the world's leading professional accountancy institutes. It represents more than 775,000 professional accountants in over 165 countries from around the globe. The GAA promotes quality services, shares information and collaborates on important international issues. As part of this effort, the GAA publishes a bi-monthly online journal. GAA Accounting includes authoritative yet accessible articles to advance the understanding of theory and practice in accounting, business finance and related subjects for members around the world. The June 2011 edition is available online and also as a Digital Edition.

CICA/RBC Business Monitor Report (Q1 2011)

The majority of executive Chartered Accountants (CAs) (64%) expressed optimism about the Canadian economy in the first quarter of 2011, marking a notable increase of 23% over the previous quarter, according to the latest CICA/RBC Business Monitor (see the Backgrounder for details). Canadian interest rates and consumer confidence were the top two reasons cited among respondents for the surge in optimism to near record levels. In addition, 66% of respondents in the first quarter survey were optimistic about their company’s prospects over the next year, up 10% from the previous quarter. (Read the CICA Media Release.)

What's Next: Stay ahead of the future

What’s Next is a trends report offering clear, concise and non-sensationalist commentary on trends in society, business, science & technology, government and the environment. Each issue covers trends across twelve sectors and speculates about future risks and opportunities. The current issue of What’s Next is available free of charge on an online basis. Readers might also like to check out the Top Trends Blog.

Confronting Complexity: How business globally is taking on the challenges and opportunities

A new study from KPMG International examines the causes and impact of complexity among businesses globally. The study shows that businesses are taking significant action to address complexity, particularly in the areas of information management, business organization and human resources, but success has been mixed. More than 90% of senior executives say their organization’s success depends on managing today’s complex business issues, but less than half believe the actions they are taking to manage complexity have been very effective. The study, Confronting Complexity: How business globally is taking on the challenges and opportunities, is based on interviews with 1,400 senior executives in 22 countries. The research found that at least 7 out of 10 executives believe complexity can create new opportunities for their businesses, including gaining competitive advantage, creating better strategies, expanding into new markets and improving efficiencies.

CEO Round Table - What do the leaders of the top seven CA firms think about key issues?

In December 2010, Kevin Dancey, president and CEO of the Canadian Institute of Chartered Accountants (CICA), hosted a round table discussion with the CEOs of the top seven accounting firms. The discussion covered a wide range of topics of interest to the profession. Participants included Chris Clark of PricewaterhouseCoopers, Keith Farlinger of BDO Canada, Trent Henry of Ernst & Young, Alan MacGibbon of Deloitte, Phil Noble of Grant Thornton, Daryl Ritchie of Meyers Norris Penny and Bill Thomas of KPMG. Also present was Bill MacKinnon, chairman of the CICA. Read what these leaders had to say about key issues in the article "CEO Round Table" at CAmagazine online.

FINTRAC ANNUAL REPORT 2010 - Ten Years of Connecting the Money to the Crime

During 2010, FINTRAC, as Canada’s financial intelligence unit, celebrated its tenth anniversary. (Refer to the publication FINTRAC ANNUAL REPORT 2010 - Ten Years of Connecting the Money to the Crime.)

FINTRAC made 579 (556 in 2008-09) disclosures of information relevant to investigations of money laundering, terrorist financing, and/or threats to the security of Canada. Turnaround time on cases improved 17%, and requests for assistance went up 36%. By using electronic media for case disclosures, it sharply reduced delivery times, and provided a more flexible product for law enforcement and intelligence partners to work with.

FINTRAC published a new series of strategic intelligence assessments focusing on terrorist groups and countries arousing national security concerns, as well as reports informing partners about current and emerging typologies and trends in money laundering and terrorist financing. It was also the Canadian lead for the FATF typology project about the use of new payment methods for money laundering purposes.

The Office of the Privacy Commissioner (OPC) issued a report praising the Centre's management of personal information, and recommended the appointment of a Chief Privacy Officer. FINTRAC was pleased to implement this and other OPC recommendations.

(See Highlights from FINTRAC's 2010 Annual Report.)

CICA/RBC Business Monitor Report (Q4 2010)

The quarterly CICA/RBC Business Monitor indicates that optimism about the Canadian economy among executive Chartered Accountants has stabilized and, like the previous quarter, respondents are much more likely to be optimistic about their own businesses (41% are optimistic about the Canadian economy over the next 12 months and 56% are optimistic about how their company will perform over the next 12 months). The Q4 2010 CICA/RBC Business Monitor webinar will take place on February 23, 2011 at 12:30pm (register online). RBC Assistant Chief Economist Dawn Desjardins will give an economic update and answer questions following the webinar. (Read the CICA Media Release.)

Executive CAs more optimistic about own company than Canadian economy

More than half of executive chartered accountants (56%) are optimistic about how their company will perform over the next 12 months despite their lack of optimism in the Canadian economy, according to the latest CICA/RBC Business Monitor (Q3 2010). Only 39% of executive CAs surveyed are optimistic about how the Canadian economy will perform over the next 12 months, a steep decline from the 57% who had a positive view in the second quarter of 2010. When compared with CICA/RBC Business Monitor results from a year ago, optimism about the national economy is down 7%, marking the first year-over-year decrease since the first quarter of 2009. (Read the CICA Media Release.)

Competitive Alternatives 2010

The KPMG/MMK Consulting study Competitive Alternatives 2010 compares business competitiveness for more than 100 cities in 10 countries: Australia, Canada, France, Italy, Japan, Germany, Mexico, the Netherlands, the United Kingdom, and the United States. For 2010, the study expands its coverage of large international business centres, adding a number of major global cities for the first time. International results now reflect business costs in each country's major metropolitan regions. The primary focus is international business costs. The study measures the combined impact of 26 significant cost components that are most likely to vary by location, as applied to 17 different business operations over 10 years.

Redrawing the Map: Globalization and the Changing World of Business

This 2010 report by Ernst & Young/Economist Intelligence Unit draws on three sources of original research: an index measuring 60 countries according to their degree of globalization; an online survey of 520 senior business executives worldwide; and a program of in-depth interviews with 30 senior executives and high-level experts. The key findings of the survey Redrawing the Map: Globalization and the Changing World of Business are that: (1) Competing in a new environment: The rise of companies from emerging markets has changed the game and the outlook for business. (2) Expanding internationally: Despite the downturn and concerns over state intervention, companies are still planning geographic expansion. (3) Innovations in innovation: Companies must rethink strategies to ensure that innovations developed in one country are commercially viable in others. (4) Diversifying management: As companies deepen and broaden their presence in international markets, the need for culturally diverse management teams becomes all the more pressing. (5) Policy matters: Business will have to engage with governments and other policymakers on global issues such as protectionism, regulation and trade issues.

6 Ways to Be Innovatively Global

Foreign market entry does not always require a major investment. If you follow these six tips, overseas business will be at your doorstep in no time at all. (Read the article "6 Ways to Be Innovatively Global" at Open Forum online.

A Global View of Risk

The World Economic Forum's Global Risk Network challenges executives to think more broadly about threats to their businesses. Rather than viewing single risks in isolation, executives should try to better understand the connections among a host of global problems that could affect their businesses in the next decade. The World Economic Forum's Global Risks 2010: A Global Risk Network Report, prepared by a team of 200 risk experts from around the world, categorizes risks in five areas: societal, geopolitical, environmental, economic, and technological. (Read the article "A Global View of Risk" at CFO.com online.)

Dissecting the next decade of the new millenium

After the decade of relative peace and prosperity that was the ’90s,expectations were that the good times would carry on into the new millennium. Few could have predicted how different the reality would be: the worst terrorist attack in history, two draining US-led wars that continue today, US$150-a-barrel oil and the near-collapse of the international financial system, which led to a worldwide recession we are just now crawling out of. What are the big concerns confronting Canadian business in the next 10 years? Eight business leaders share their thoughts? (Read the article Dissecting the decade in the April 2010 issue of CA magazine online.)

C-Suite Survey: 2009 in Review and the Challenges of 2010 and Beyond

This quarterly C-Suite Survey of over 158 chief executive officers, chief financial officers and chief operating officers was conducted between November and December 2009 by the Gandalf Group. It was published by The Globe and Mail and Business News Network, with sponsorship by KPMG Canada. The report covers their views on: a look back on 2009, the year ahead, executives’ salaries, federal finances and managing with deficits, and U.S. and Canadian leadership. A review of 2009 sees executives’ assessments of the economy completely turn around. In February 2009, executives were in the grips of a recession. Now most are predicting modest economic growth for 2010. The majority agree the markets rallied faster than expected in 2009. One in three now predict strong growth for their companies. Most expect their companies to pay out bonuses, yet the majority also agree that the recession demonstrated executive pay had become too generous. (Read the C-Suite Survey: 2009 in Review and the Challenges of 2010 and Beyond.)

Investors: Climate-change policies and disclosures needed

Investor groups representing $13 trillion in assets are calling on governments to adopt strong national climate policies that could trigger the flows of private capital needed to build a low-carbon global economy. The groups also are pushing for mandatory disclosure in public company filings of material climate-related risks and the programs in place to manage those risks. The American Institute of Certified Public Accountants (AICPA) has an initiative to participate in the development of universally accepted accounting and reporting standards for sustainable activities and risks that meet the needs of investors and businesses. (Read the article Investor Groups Call for Climate Change Policies and Disclosures at Journal of Accountancy online.)

Global Risk Report 2010

The World Economic Forum has published Global Risk Report 2010. The document provides political and business leaders with a framework for further discussion of a risk landscape that is increasingly complex and urges a consideration of the longer term, global implications of risks in areas beyond their immediate focus. The key findings are as follows:

• The events of the past year have revealed a fundamental need to change thinking on global risks and how they are managed. With unprecedented levels of interconnectedness between all areas of risk, the report stresses that the need to combat governance gaps globally is greater than ever. It argues that this can only be addressed by an overhaul of current values and behaviours by decision-makers to improve coordination and supervision.
• Fiscal crises and unemployment, underinvestment in infrastructure – especially in energy and agriculture – and chronic disease are identified as the pivotal areas of risk over the next years.
• Other risks identified as equally systemic in nature, and requiring better global governance, are transnational crime and corruption, biodiversity loss and cyber-vulnerability.

CICA/RBC Business Monitor (Q4 2009)

This CICA/RBC Joint Report interviews chartered accountants (CAs) working in senior executive positions for Canadian businesses, to determine their views regarding the economic prospects for their company, province and Canada in the upcoming year. The key findings are as follows:

• After two consecutive quarters of significant growth in optimism, the final quarter of 2009 was virtually unchanged from the previous quarter - 48% of respondents expressed optimism in the economy over the next twelve months, compared to 46% from Q3 2009. Of the remaining Q4 2009 respondents, 39% were neutral while 13% were pessimistic about the year ahead.
• On average revenues (+ 3.3%), profits (+3.2%) and employment numbers (+0.8%) are expected to increase in the next twelve months. In the same quarter a year ago, projections called for decreases in all three categories.
• In summary, 23% of respondents stated that their company’s profits did not decline during the recession.

(Read the CICA Media Release and Background Papers on the Survey.)