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RISK MANAGEMENT
HANDELSHÖGSKOLAN I UMEÅ
2008-01-10
Klas-Erik Hjorth
Why Risk Management ?
Our name
Our values
Our opportunity
Risk Management
Internal work to
- Secure quality in production
- Minimize professional and commercial risks
Agenda 1
Presentation Klas-Erik Hjorth
Lindebergs Grant Thornton (later)
Standards in Audit industry
Global
Europe
National (Rules and Monitoring)
The audit firm
Agenda 2
Risk Management
Develop systems and rules
Education
Modified auditors report
Suspicion of crime
Suspicion of Money Laundering
Agenda 3
Quality assurance
Monitoring
Auditors liability
Suspicion of internal crime
Disciplinary actions
Agenda 4
Future
The need of monitoring in the future?
Conclusion
Presentation
Klas-Erik Hjorth född 1945
Higher school examination 1965
Military education 1965/1966
Higher business administration educ. 1967-1969
Lifelong daily education
Klas-Erik Hjorth
In the audit industry 40 years
18 years in one of the big four
13 years self employed
1997 partner in Lindebergs Grant Thornton
Clients
Qualified auditor since 1973
Klas-Erik Hjorth
Audit Insitute
Svenska Revisorsamfundet SRS since 1984
SRS president 1992 -1998
President SRS Quality Controll 1998 -2003
Klas-Erik Hjorth
International experience
Two missions with UN 1967 och 69/70
EFAA 1994
President EFAA 2000 - 2006
Klas-Erik Hjorth
Other engagements
Branschsaneringsutredningen 1997
Kommerskollegium, advisory committee, deputy.
Supervisory Board of Public Accountants ( RN)
Deputy 1995 -1998
Ordinary member 1998 -
Reasons for audit
Serving the public interest with reliable financial
information
Independent auditors
In Sweden, monopoly
Education requirements Godkänd revisor and
Auktoriserad revisor.
Monitored by The Supervisory Board of Public
Accountants (RN)
The ground stones of an Audit
Independence
Complete information
Competence
Confidentiality
Auditing
Catch information about the audited entity and there
environment
Risk analyse
Audit plan
Select working methods and working program and
carry out the audit. Documentation
Report
Auditing Standards
GLOBAL
IFAC International Federation of Accountants
Code of Ethics
IAASB
International Auditing and Assurance Standards Board
develop ISA, International Standards on Auditing
Auditing Standards
IPSASB Public Sector Accounting
IASB International Accounting Standards Board
International Accounting Standards, IAS and IFRS
IAESB International Accounting Education Standards
Board
Standard setters
Europa
EU Commission/EU Parliament
EFRAG European Financial Reporting Advisory
Group
FEE
EFAA
UNICE, ERT, FESE, FESE, CEA, FBE, ESBG,
EACB and UEAPME
Standard setters
Sweden
Sveriges Riksdag, Regeringen, departementen
bereder
Bokföringsnämnden
Finansinspektionen
Rådet för finansiell rapportering ersätter
Redovisningsrådet RR from April 2007
Revisorsnämnden
FARSRS, IAS, IFRS and ISA = RS
The Supervisory Board of Public Accountants
Office (About 20 employees)
Board with nine delegates
Meetings about 10 times a year.
The Supervisory Board of Public Accountants
President, judge
Vice president, judge
Svenskt Näringsliv
LO
Skatteverket
FARSRS
2 st
Finansinspektionen
University
The Supervisory Board of Public Accountants
Annual report 2006
Auditors 2006-12-31
4 135
Certified 2006
173 (149) godkännanden
60 ( 58) auktorisationer
10 ( 9) firms
R
Examination
319 (357)
thereof approved
172 (178)
(4 182)
HR
95 (140)
47 ( 63)
The Supervisory Board of Public Accountants
Annual report 2006
Disciplinary actions 2006
(Decisions 139)
GR
AR RB TOT
Withdrawal, title
4
1
5
Warning
19
18
37
Reminder
4
12
16
Total 2006
27
31
0 58
Total 2005
32
26
1 59
Total 2004
32
14
0 46
Total 2003
17
32
1 50
Audit firm, internal rules
Audit firm
Independence (opartiskhet, självständighet och
objektivitet)
Employment, skills, on the job training,
Continuing professional education
Client acceptance
Confidentiality
Security, computer systems and files
Quality, quality control, and monitoring
Audit firm, internal rules
Tools and systems for all service lines, accounting,
auditing, tax corporate finance and other
professional advice
Accounting procedures
Auditing procedures
Tax procedures
Corporate finance procedures
Claims and liability
Lindebergs Grant Thornton AB
Lindebergs Grant Thornton AB
Business concept
Our business concept is to offer auditing, advice,
accounting and corporate finance to support
successful development for entities and there
owners
Lindebergs Grant Thornton
850 (725) employees
111 (106) partners
33 (33) offices
Member of the international network Grant Thornton
International, GTI
Lindebergs Grant Thornton
Service lines
Auditing and advice connected with auditing
Accounting
Tax
Corporate finance
Financial control
Why Risk Management ?
Our name
Our values
Our opportunity
Risk Management
Internal work to
- Secure quality in production
- Minimize professional and commercial risks
Risk Management 1
Client acceptance
Client reacceptance
Additional engagements
Approval of independence and risks
Engagement agreements
Service lines
Risk Management 2
Conflict of interests
Follow the development of new and amended standards
Global independence system (GIS)
Confidentiality and secured computer systems
Risk Management 3
Suspicion of crime
Suspicion of money laundering
Modified auditors report
Actual Risk Management matters
Sponsoring of audit clients
DI/Handelshögskolan
Client, type of sponsoring, value, once or
periodical, sponsoring agreement
Other actual Risk Management matters
Quality control
Quality Control
(Daily Control)
Audit plan and risk analyse acceptable?
Work performed in accordance with the plan?
Acceptable methods used?
Acceptable hours spent?
Acceptable conclusions?
Acceptable documentation?
Quality Control/Monitoring 1
(Internal monitoring)
Selected and special educated persons.
Five and three years periods
Internal instructions followed. The work performed in
accordance with general accepted audit standards
and professional ethics for accountants
Quality Control/Monitoring 2
(Internal monitoring)
Not a new audit!
Only a test of the work performed
planning, risk analyse, used methods,
documentation and reporting
Quality controls actual situation
Daily quality control before delivery
Internal quality control (3 –5)
International quality control (3 - 5)
FAR SRS quality control (5)
Supervisory Board of Public Accountants
Monitoring activities
Skatteverket.
Börsen
Aktieägarna/Aktiespararna
Bank/kreditgivare
Newspapers, TV, radio
Källa: Redovisning och Revision i dagens ljus. Insikter
från kandidatarbeten
(Collin & Tagesson Högskolan Kristianstad 2003)
Compensation claims
Liability assurance
”Deep pocket”
Compensations claims
Internal
Together with insurance company
Court
Disciplinary actions
Suspicion of crime, staff
Announcements to Supervisory Board of Public
Accountants
Future
Do we need more monitoring
systems for auditors?
What is the auditors duties?
CONFIRM /CERTIFY
Some thoughts about the future
Is it possible to avoid scandals in the future?
Continuing ethical discussions about fundamental
principles for our life together in the society.
All of you and me, at home, among friends, at work,
at school, everywhere, in the local, regional, national
and international society.
RESPONSIBLE, ALL HUMAN BEEINGS
What to do?
Discuss
Ethics in general
Ethics in the profession
Develop
Program and systems for the audit
The standards
Inform
Repeat frequently the involved persons responsibilities
What to do
High standard on education
Compulsory continuing education
Fantasy and ”Up to date”
The tone at the top
High standard on quality control
Well functioning monitoring authorities
Efficient and powerful actions against failing
professionals
A new audit approach?
Peter Öhman vid Mittuniversitetet i Sundsvall
Open for discussion about a different approach
Actual process in Swedish Government
Limitation of Statutory audits
Effects on the market
Future independence rules
Tax and accounting
A new law for a new type of companies with limited
liability
Conclusions
We expect your voice in the discussions!
Auditor, exciting profession! Welcome!
THANKS FOR YOUR ATTENTION!