not sufficient
Kiattisak Jelatianranat 31 May 2000
2nd Asian Roundtable on Corporate Govern
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Five Components of COSO’s Control Framework
• Control Environment
• “Risk Management” and “Business Control” are the first thing for any board consideration.
Kiattisak Jelatianranat 31 May 2000
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• Effectiveness and efficiency of operations • Reliability of financial reporting • Compliance with applicable laws and regulations
Kiattisak Jelatianranat 31 May 2000
Kiattisak Jelatianranat 31 May 2000
2nd Asian Roundtable on Corporate Govern
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Risk Management Action Options
Options
Fix Controls Re-Engineer Process
Trainings Transfer Risk (Insurance) Outsource the Function
crucial for success.
• Implementation as an integral cultural change.
• Internal Control training is a “must”.
• Tailor practices to an organization to assure the surpassing
Kiattisak Jelatianranat 31 May 2000
2nd Asian Roundtable on Corporate Govern
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Board Effectiveness
x Board initiative & Ownership of :
• Corporate governance framework
: The Foundation on which everything rests.
is a process, effected by an entity’s people (board of directors, management, and other personnel), designed to provide reasonable assurance regarding the achievement of objectives the following categories :
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Internal Control Learned in Real World
• Focus on “Soft Control” in assessing all of COSO’s
“Five Components” and “Three Objectives”.
• Soft Controls are subjective in nature, thus self-assessment is
expected benefits from the implementation.
Kiattisak Jelatianranat 31 May 2000
2nd Asian Roundtable on Corporate Govern
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COSO’s Internal Control Definition
Risk
• Assess risk • Manage risk
Control Alignment
• Assess existing controls • Select control model • Continuous communication
• Continuous program for ORC • Develop a control improvement plan
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Control Reality
• Focus on people and process, not merely policy manuals and forms
• Require dynamic and interactive evaluation techniques. • Verifying compliance with policies and procedures is
………. Both need independence and objectivity
Kiattisak Jelatianranat 31 May 2000
2nd Asian Roundtable on Corporate Govern
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Balanced Scorecard in Corporate Governance
Kiattisak Jelatianranat
2nd Asian Roundtable on Corporate Govern 31 May 2000
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Responsibility VS Accountability
• Responsibility What, and Who will do ? • Accountability How, and For whom ?
Kiattisak Jelatianranat 31 May 2000
2nd Asian Roundtable on Corporate Govern
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Balanced Responsibility …… legal & moral
Board “core” responsibilities……….
Risk is any issue which could impact your ability to meet your objectives
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Risk ……….. • Risk Assessment - Identify - Measure - Prioritize • Risk Management - Assess adequacy of existing controls - Develop a control improvement plan - Create a continuous program for objectives, risk and control assessment
• Create strategic vision • Select CEO & Senior management • Establish strategic, accountable information • Independent, objective and competent oversight of day-to-day operations
Kiattisak Jelatianranat 31 May 2000
2nd Asian Roundtable on Corporate Govern
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Risk & Control : The twin systems Objective
• Define strategic risk • Articulate risk philosophy • Define values and behavioral expectations
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Board responsibility for internal control and risk management
by Kiattisak Jelatianranat Chairman, The Institute of Internal Auditors of Thaila Director, PricewaterhouseCoopers
Kiattisak Jelatianranat 31 May 2000
2nd Asian Roundtable on Corporate Govern
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Why corporate governance matters ?
Sustainable Growth
Pleasant Working Environment
• Financial & non-financial information. • Equitable Treatment of stakeholders. • Combination of Lagging and Leading Information. • Alignment of short-term objectives
Do nothing-Bet
Kiattisak Jelatianranat 31 May 2000
2nd Asian Roundtable on Corporate Govern
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Well-controlled Organizations
Key attributes of a well-controlled organization include :
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Searching for the upside of risk management