Using racketeering law, which was designed to heavily punish criminal gangs, to convict school teachers and administrators raises an interesting question: Why haven’t other prosecutors used it in other fraud cases, for example, those involving the financial crisis and Great Recession?
Best practice dictates that changes in technology should be aligned with, or at least accompany, changes in organisation. However, by being stated as best practice in itself, this may suggest that this is not always the case. Creating the capability to deliver the necessary reports and documents is posing more questions than answers in organisations…
There is a theory of tort law that liability should be apportioned based on who could most efficiently have assured that a tortious event did not take place. If that standard were applied to the Bernie Madoff fiasco, the auditing profession would owe a whole lot of money to a whole lot of people. It’s a shame that the thoroughness, doggedness, and precision the profession is known for wasn’t applied to its own practitioners.
My nostalgia for this whole kerfuffle arises because after a six-month trial, a jury has just returned guilty verdicts against five of Madoff’s former employees. To understand why this event has raised unpleasant memories and unresolved concerns, let’s have a short Socratic dialogue:
There has always been somewhat of a struggle between the IT department and “management”, much of the difficulty existing with the need to demonstrate clear returns on investments for IT purchases. Unfortunately, expenditures in information technology are often the result of short-term views of long-standing problems, applying “solutions” that do not fully address the requirement or which do not deliver the productivity or performance gains expected, particularly in a dynamic and rapidly changing business environment. The assumption is that a wise investment in information technology will result with improved profitability and performance. [But} demonstrating this on paper is not always easily accomplished.
Shared services are really a concentration of company resources performing like activities, but they are spread out across the organization to service multiple, internal partners at a lower cost and providing higher levels of service.
Most organizations have shared services, but often do not understand the value that they add to a company or the value that they can destroy.
So what are the goals for shared service centers?
Bill Knese, CMA, CFM, CPA, member of IMA’s Global Board of Directors and CFO of Angus Industries, Inc. discusses whether private companies would benefit from a separate standard setting body.
Stay tuned for part two, and watch the full video interview below.
The audit committee investigating supplier payment practices at Diamond Foods will require the company restate financial statements from 2010 and 2011 after finding material weakness in the company’s internal controls. Diamond Foods will replace its current current chief executive and chief financial officers, Michael Mendes and Steven Neil. The two have been placed on administrative leave as the company searches for replacements.