Guiding the Experts!

Blog 5

When called to give evidence, a witness in a court proceeding is a “witness of fact” whereas an expert witness would be called to provide an opinion on the matter.

An opinion can be guided by different assumption therefore it is imperative that guidelines are in place. An experts report must comply with Rule 23.13 of Practice Note CM7. Rule 23.13 (g) states that the reasons for the expert witnesses opinion must be given and (e) outlines that the factual findings from which the expert's opinion is based on should be provided.    

The Chief Justice describes that these guidelines were introduced in order to facilitate the admission of opinion evidence so the experts understand the expectations of the Court. Furthermore, so that the expert witness is not subject to criticism for lack of objectivity. This is because the expert’s opinion can be drawn from facts which includes observed, scientific, accepted or assumed facts.

I think it is fairly reasonable to expect that expert witnesses adhere to guidelines. The duty of an expert witness should be to the Courts and not to act as an advocate of the client. Setting guidelines ensures that the witness knows of his/her audience. Even in general life, guidelines such as criteria on a university assignment set out the expectation so we know what is needed to be fulfilled. When I was employed in retail, we were given employee handbooks that outlined the expectations of the employer. Likewise, guidelines are needed for experts so they can meet expectations.   

Appendix

http://www.accaglobal.com/an/en/student/acca-qual-student-journey/qual-resource/acca-qualification/p7/technical-articles/forensic-accounting0.html

http://www.kordamentha.com/docs/default-source/for-publications/issue-14-01-forensic-accounting.pdf

http://www.fedcourt.gov.au/law-and-practice/practice-documents/practice-notes/cm7

Australia – White Collar Crime Paradise?

Blog 4 

The chairman of ASIC labelled Australia paradise for white collar criminals. White collar crimes include the broad term of fraud which includes credit card, bankruptcy, insurance frauds, insider trading, bribery, money laundering, embezzlement and cartel conduct.  

“Criminal Minds” from the Journal of Accountancy discusses how CPAs can learn from the way thieves think. Six fraudsters opened up how they concealed the fraud and how CPA can both prevent and uncover such shrewd schemes. 

I believe knowing the methods of white collar criminal activity will be helpful in preventing and detecting such crimes. Having worked in retail, you hear stories of managers shifting sales to prior period to meet performance indicators and get bonuses. If an accountant is aware of the this type of fraud, he/ she would check cut-off dates etc to detect this type of crime happening. Whether it is new tech savvy type of fraud or an old school method, getting into the head of a criminal can make it easier not only in detection but prevention. It may not always be that the fraud that can be detected through transactions, it could be criminal activities such as insider trading. This type of crime involves collusion and often detected by instinct. Therefore, it could be advantages to understand the types of white collar crimes.   

Appendix

http://www.journalofaccountancy.com/Issues/2012/Aug/20125839.htm

http://www.smh.com.au/business/trouble-in-paradise-greg-medcrafts-white-collar-crime-comments-get-people-hot-under-the-collar-20141024-11bdva.html

http://www.news.com.au/finance/business/asic-whitecollar-crime-data-tip-of-the-iceberg-in-australia/story-fnda1bsz-1227099462601

Forensic Accountants and the New Regulatory Environment

Blog 3

The role of a forensic accountant is to assist the courts, solicitors and clients to analyse, interpret, summarize and present complex financial and business information.  

Replacing the standards APS11 and G2, a revised edition APS215 Forensic Accounting Services was introduced. Requirements were tightened to enhance professional standards as the demand placed on forensic accountants grew Australia. However, there is concern that some professionals do not understand the changes.

Practice Note CM7, Guideline 1.1 specifies that when in court, an expert witness is required to use the experts area of expertise to assist the courts. In order to have expertise knowledge in the forensic accounting field, he/she should be aware of any regulatory changes to assist the court. 

As with any area of expertise, I think it is an expectation that a professional will be update to date with any changes that occur in their field. I used to be employed at a consumer electronics store. Due to the nature of technology, the products we offered were rapidly and frequently changing.  It was expected and also essential to know these changes and how these changes impacted certain products in order to assist the customers. Likewise, a forensic accountant should know the regulatory changes whether acting as an advocate to assist their clients or giving evidence as an expert witness to satisfy their duties in court.

Appendix:

http://www.michaelkirby.com.au/images/stories/speeches/2000s/2011/2525-FORENSIC-ACCOUNTING-CONF-MARCH-2011.pdf

http://www.apesb.org.au/development/APESBCMS/ver1.3/uploads/news/speeches_presentation/25112014025238_APESB_Presentation_-_CAANZ_Forensic_Accounting_Conference_-_29_Oct_2014.pdf 

 

Importance of COBIT 5 in your business

Blog 2

Risks are an inevitable part of any business. COBIT 5 for Risk is dedicated to providing guidance on how to govern and manage IT risk using the 5 COBIT  principles below.

Principles of the COBIT 5

Principle 4 is based on the importance of enabling a holistic approach to managing risks. COBIT takes such approach by using the 7 enablers. Why? Because enablers, which are factors that determines the success of governance and management of IT, are applicable across the whole entity.

An interesting article by Axel Buecker highlights the importance of taking a holistic approach to safeguarding the entire organisation. Thus the COBIT framework takes a holistic approach by giving attention to both processes and enablers.This includes people, processes, data and technology now that the traditional boundaries of a business have disappeared with the emergence of newer technology.


COBIT gives guidance on managing risks and constructing appropriate risk culture for the organisation. COBIT also addresses risk in terms of risk scenarios, which are generic cases used as references so that management does not overlook common risks.

Five measures to minimise fraud risk

•  Keeping computer systems up to date
•  Ensuring staff are aware of the importance of securing both company and personal information – setting the “tone at the top” is effective as I discussed in Blog 1
•  Checking the proof of identity
•  Implementing internal controls
•  Good corporate culture 

Monkey See.... Monkey Do??

Blog 1

Setting the right tone at the top is vital to allows the ethical climate to be filtered down to the employees below. Wrong tone could mean a wrong turn. This concept is also important in terms of IT Governance. Can the attitudes of the management really help prevent risky behaviours?

The Standards Australia Technical Committee developed standards with a governance framework that encourage management leadership in IT projects.  The standards were prepared in light of recent IT failures that were attributed to the absence of good IT governance from management such as the $1.2 billion Queensland Health Payroll debacle. Protiviti found that organisation with oversight and direct questions from the board responded much better to IT security issues. Protiviti's 2014 IT Security and Privacy Survey found that a highly engaged board with IT security creates a security-conscious environment.   

Even on a smaller scale, it becomes clear how people mimic the work of their superiors. I once interned at a private agency. The management had placed the usernames and passwords needed to log onto the system on every desktop in full view of interns, casual staff and clients. This gave access to client information, the payroll system and the company intranet. The lower level staff were not worried and allowed the interns unsupervised access to the system.

I believe that management emphasis on the importance of IT governance is the key to successfully constructing a no-tolerance attitude to risky IT behaviours. Like the pyramid above, the values of management will filter down to the employees below and encourage a IT risk-averse environment because the employee will do what the employee sees.