Www.naplia.com Copyright 2013 Risk Management Stephen Vono, Principal NAPLIA.

transcript

Risk ManagementRisk ManagementStephen Vono, Principal

NAPLIA

The Risk EnvironmentThe Risk Environment• Culture• Risk Assessment: Employee & Client• Engagement Letters• Fraud• Cyber Risk

Culture

Risk Assessment: Employee & Client

• First line of defense• New client acceptance forms• Predecessor accountants• Background checks

Engagement Letters• Second line of defense• Comprehensive contract: not a fee agreement• Purposes:

– Define scope of engagement– Mutual responsibilities– Provide for contingencies– Prevent differing expectations

Percentage of Audit Claims(By Source of Claim)

Who Commits Fraud?

60Percent

Employees Management Owners

Position in the Organization

Who Commits Fraud?

Employees Management Owners

Median Loss by Position

Employee Fraud(Opportunity)

• Experienced employee• Lack of segregation of duties• Uninterrupted service–Annual vacations not required

• Weak management oversight

Client Risk Assessment(Centralizing the Process)

• Risk assessment committee• Must be willing to reject prospects and

terminate existing clients

Cyber Liability

First Party vs. Third Party

Employees

Accountant/Owner

ClientNon-client

First Party Third Party

Professional Liability vs. Legal Liability

Notification Letter• WISP• Notification laws• Best practices policies– Portal usage

Thank you!

www.naplia.com

Stephen VonoSteveV@naplia.com linkedin.com/in/stevevono @naplia

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