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Strategically Managing Risk in Today’s Perilous Markets
Bob Paladino, CPA
Managing risk has become an essential element of corporate strategy. By combining a continuous strategic planning process, a Strategic Business Services department focused on Enterprise Risk Management responsibilities, balanced scorecards, the tying of all metrics to processes, and other tactics, the United Illuminating Company (UI) creates a foundation for successfully managing risk from an organization-wide scale down to individual projects. UI’s integration of strategic planning with ERM, along with the implementation of a process-based organization, has made it a model for identifying and sharing ERM best practices.
Just the Beginning
Now that the $700 billion bailout passed by Congress in October is being implemented, what will happen next? The public outcry in response to the poor business decisions, lack of oversight, excessive executive compensation, and golden parachutes that led to the current crisis points to more reform on the horizon. The short-term implications of the bill won’t affect many companies outside the financial services industry, but the longer-term effects may result in dramatic changes. Consolidation of commercial lenders and underwriters, accounting provisions regarding fair value accounting, and restrictions on executive compensation are just a few issues in play.
Tone at the Top: Insights from Section 404
Dana R. Hermanson, Daniel M. Ivancevich, and Susan H. Ivancevich
A company’s tone at the top is frequently cited as an important factor in establishing an effective ethical culture throughout the organization, yet senior management members continue to be the driving force behind many of the accounting frauds still making headlines. That’s one reason Section 404 of the Sarbanes-Oxley Act requires an auditor to express an opinion on its client’s internal control over financial reporting. These statements can provide important insight into how vulnerable companies may be to fraud and other misdeeds by senior management as well as the methods used to remedy potential weaknesses.
The M&A Impact of SFAS No. 141R
Andrew C. Smith, CMA, CPA/APV, and Ryan R. Berry, CPA/APV
The changes created by the FASB’s revised Statement on business combinations may have a substantial impact on the structure of future mergers and acquisitions. Additional attention will be needed in making underlying fair value estimates, and greater care and planning will be required during due diligence. These changes not only affect the financial reporting of M&A transactions, but in how potential transactions will be analyzed. Those involved in the analysis of and accounting for an acquisition need to understand the new rules and plan accordingly to maximize the deal’s value.
Remember the customer.
Finding the upside advantage in downside risk.
The cost of baggage.
The Economic Stimulus Act of 2008: Depreciation provisions.
Nonprofit organizations show stronger ethical cultures.
Financial statements unlike any you’ve seen (part 1).
CMA’s significance in the Middle East.
Creating running totals in a pivot table.
Making the move from Excel to Access.
Small steps, giant leaps.
IMA to update management accounting glossary PCAOB proposes new auditing standards on Risk SEC guidance on fair value discounted Books: Ethical corporate governance
TOOLS OF THE TRADE
Enterprise open source adoption.
Many Eyes—A data kaleidoscope.