1st Edition

Intelligent Internal Control and Risk Management Designing High-Performance Risk Control Systems

By Matthew Leitch Copyright 2008
    270 Pages
    by Routledge

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    Many people in organizations resent internal control and risk management; these two processes representing unwelcome tasks to be completed for the benefit of auditors and regulators. Over the last few years this perception has been heightened by the disastrous implementation of section 404 of the Sarbanes-Oxley Act of 2002, which is generally regarded as having been too expensive for the benefits it has brought. This important book offers a way of improving this prevailing perception and increasing the value of control and risk management by bringing creativity and design skills to the fore. The value of risk and control activities is often limited by the value of the control ideas available and so Matthew Leitch provides an arsenal of 60 high performance control mechanisms. These include several alternative ways to design controls and control systems, as well as providing controls for monitoring and audit, controls for accelerated learning, and techniques for finding and recovering cash. This design material is combined with insights into the psychology of risk control, strategies for encouraging helpful behaviour and enabling change, and a surprisingly simple integration of internal control with risk management. The book is realistic, practical, original, and easier reading than most in the field. The material is not specific to any one country and has international appeal for internal auditors and all those concerned with risk management, corporate governance and security.

    Introduction; Part I The Bigger Picture; Chapter 1 How Much Improvement is Possible?; Chapter 2 Risk Management and Internal Control: Poised for Progress; Chapter 3 Integrated Risk Control is Simpler; Chapter 4 Goals from People and Behaviour; Part II High Value Control Mechanisms; Chapter 5 A Summary of Control Patterns for More Value; Chapter 6 Controls that Generate Other Controls; Chapter 7 Audits, Reviews and Efficient Monitoring; Chapter 8 Learning and Adapting; Chapter 9 Protection and Inherent Reliability; Chapter 10 Checking and Correcting; Part III Making Good Change Happen; Chapter 11 Triggering Good Behaviours; Chapter 12 Personal Education and Assessments; Chapter 13 Understanding Barriers to Improvement; Chapter 14 Key Roles and How Each Can Increase Value from Risk Control; Chapter 15 Innovation and the Friendly Expansion Strategy; Chapter 16 Helpful Alternatives to Unhelpful Ideas; Chapter 17 The Seven Frontiers;


    Matthew Leitch is a qualified accountant and auditor with the mind of a designer. His background includes writing, psychology, mathematics, software development, audit, and accountancy. For seven years until 2002 he worked for PriceWaterhouseCoopers as a specialist in internal controls and risk management. There he pioneered new methods of designing control systems through a series of projects with leading organizations. Matthew works as an independent consultant, researcher, and author.

    'Matthew Leitch provides compelling evidence that a scientific approach to internal controls and risk management can significantly improve performance. This book combines theory with case studies and the author's unrivalled experience in implementing value-adding control systems.' Michael Mainelli, Executive Chairman of Z/Yen Group 'This book is about managing internal control systems and associated risk and uncertainty with a grin instead of a grimace. It focuses on value from creativity, rather than compliance by bureaucracy. It concerns psychological and political issues as well as systems and scientific issues. Integrating disciplines is at its heart. The last four chapters provide lots of implementation tips, building on numerous useful ideas explored earlier. It is refreshingly thoughtful in a maverick and informal manner - well worth a read.' - Chris Chapman, University of Southampton, and Senior Associate, The Nichols Group 'The scope of internal control, risk management and external audits has expanded exponentially over recent years and the costs have gone through the roof. But doing more of the wrong things, even if it means ticking the right regulatory boxes, has not taken organizations in the right direction. This book is a breath of fresh air. Matthew Leitch offers a new agenda for internal control and risk management based on clear and intelligent thinking and analysis. It shows how controls can add value rather than costs. Supported by many interesting examples this book should be compulsory reading for all senior managers and professionals in the risk management business.' Jeremy Hope, cofounder of the Beyond Budgeting Round Table and author of Reinventing the CFO