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www.naplia.com Copyright 2013 Risk Management Risk Management Stephen Vono, Principal NAPLIA
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www.naplia.comCopyright 2013
Risk ManagementRisk ManagementStephen Vono, Principal
NAPLIA
Copyright 2013www.naplia.com
The Risk EnvironmentThe Risk Environment• Culture• Risk Assessment: Employee & Client• Engagement Letters• Fraud• Cyber Risk
Copyright 2013www.naplia.com
Culture
Copyright 2013www.naplia.com
Risk Assessment: Employee & Client
• First line of defense• New client acceptance forms• Predecessor accountants• Background checks
Copyright 2013www.naplia.com
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
Copyright 2013www.naplia.com
Percentage of Audit Claims(By Source of Claim)
Copyright 2013www.naplia.com
Who Commits Fraud?
0
10
20
30
40
50
60Percent
Employees Management Owners
Position in the Organization
Copyright 2013www.naplia.com
Who Commits Fraud?
0
100
200
300
400
500
600
700
800
900
Employees Management Owners
Median Loss by Position
Copyright 2013www.naplia.com
Employee Fraud(Opportunity)
• Experienced employee• Lack of segregation of duties• Uninterrupted service–Annual vacations not required
• Weak management oversight
Copyright 2013www.naplia.com
Client Risk Assessment(Centralizing the Process)
• Risk assessment committee• Must be willing to reject prospects and
terminate existing clients
Copyright 2013www.naplia.com
Cyber Liability
Copyright 2013www.naplia.com
First Party vs. Third Party
Employees
Accountant/Owner
ClientNon-client
First Party Third Party
Copyright 2013www.naplia.com
Professional Liability vs. Legal Liability
Copyright 2013www.naplia.com
Notification Letter• WISP• Notification laws• Best practices policies– Portal usage
Copyright 2013www.naplia.com
Thank you!
www.naplia.com
Stephen [email protected] linkedin.com/in/stevevono @naplia
