Namibian auditor general warns regional councils about weak controls | Japan's tougher manufacturing-quality measures to include internal controls | EU is 2018 chair of effort to nix conflict diamonds in supply chain
17 January 2018
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Internal Audit Watch
Namibian auditor general warns regional councils about weak controls
Reports from the auditor general of Namibia have cited inadequate internal controls, mismanagement of state money and other issues at most of the country's regional councils. Auditor General Junias Kandjeke said regular reconciliations are necessary to prevent financial misstatements.
The Namibian (Namibia) (05 Jan.) 
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Japan's tougher manufacturing-quality measures to include internal controls
Japan's Industrial Standards Law is undergoing revisions by the Ministry of Economy, Trade and Industry to impose stricter penalties for companies providing falsified data about their products' quality. The draft is likely to include requirements for internal controls, such as whether quality checks are handled by multiple people and whether interference is present in the quality-control section.
Nikkei Asian Review (Japan) (tiered subscription model) (27 Dec.) 
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Explore Liquidity Risk's Past, Present, and Future.
The IIA's new Practice Guide: Auditing Liquidity Risks, An Overview provides a history of liquidity risk's regulatory environment, gets financial services auditors up-to-speed on today's regulations, and discusses how it will impact supervisors' expectations related to internal audit's approach. Get it today
Risk Management
EU is 2018 chair of effort to nix conflict diamonds in supply chain
Many nongovernmental organisations have exited or called for changes to the Kimberley Process Certification Scheme, used to determine that conflict diamonds are not part of the legitimate supply chain. The EU will chair this year's Kimberley Process efforts.
Devex (free registration) (12 Jan.) 
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China's top judge calls for overhaul of bankruptcy law
Zhou Qiang, president of China's Supreme People's Court, said the rules governing bankruptcy courts should be overhauled to protect financial markets. He said fair and just bankruptcy tribunals could help clean up "zombie companies" in China.
China Daily (Beijing) (26 Dec.) 
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What's Ahead for Third-Party Risk Management?
Learn about recent and anticipated enforcement and regulatory changes. Get tips & advice for setting your third party program up for success in 2018. Hear about increasing global anti-corruption enforcements, new FCPA policies, DOJ guidance revisions, and new FinCEN regulations coming in May. January 25 at 10 AM PT / 1 PM ET. Register Now!
Regulation & Compliance
MiFID II a marathon, not a sprint
While investment firms can anticipate soft treatment from regulators in the first year of the updated Markets in Financial Instruments Directive, they should be prepared for the 2019 regulatory review.
Bloomberg Professional Services (10 Jan.) 
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Commentary: What foreign private issuers should know about Form 20-F
Foreign private issuers should be aware of recent developments as they start to work on their annual Form 20-F reports to submit to the US Securities and Exchange Commission. These developments include disclosures of non-GAAP financial measures and transactions with countries under US sanctions.
Lexology (11 Jan.) 
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Add to Your ERM Toolkit.
How well has your organization's ERM approach kept pace with the vast changes in the business environment over the last decade? In his latest book, Managing Risk in Uncertain Times, author and ERM expert Paul Sobel explains how to use the recently updated COSO ERM Framework as an evaluation tool to see where your organization stands. Preorder your copy today!
Fraud & Ethics
Report: Fraud has major effect on Nigeria's governmental entities
Fraud accounts for the loss of 60% of revenue at governmental ministries, departments and agencies in Nigeria, according to the Association of Forensic and Investigative Auditors. Strong internal controls can mitigate the losses, and a bill before Nigeria's Senate aims to increase forensic auditors' involvement in preventing such fraud.
Vanguard (Nigeria) (24 Dec.) 
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$2.95B settlement reached in class action against Brazilian oil company
$2.95B settlement reached in class action against Brazilian oil company
(Yasuyoshi Chiba/AFP/Getty Images)
Brazil's state-run Petroleo Brasileiro, commonly known as Petrobras, has denied culpability as it agreed to pay $2.95 billion to resolve a securities class-action lawsuit in the US. The settlement, which requires a US district judge's approval, involves allegations that Petrobras executives took bribes totaling more than $2 billion over a decade.
Reuters (03 Jan.) 
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Strengthen Your Core
As The IIA's premier designation for more than 40 years, the CIA sets the standard for excellence within the profession. Establish your foundational core for career growth and opportunity.
Exec: Banks in Latin America must understand need for fintech
Traditional banks in Latin America should expand their efforts to meet companies' needs for the use of fintech in conducting transactions, said Anabel Perez of NovoPayment. "In payments use cases specifically, you see ... banking systems that remain largely burdened by the lack of interoperability, inflexibility and data silos of legacy infrastructures," she said.
Pymnts (09 Jan.) 
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European Commission to issue fintech guidance
The European Commission plans to release policy recommendations in February covering topics such as blockchain, cloud-data servicing and online security to encourage growth of the financial-technology sector. The commission will propose legislation governing crowdfunding and peer-to-peer lending but will restrict itself to guidance for other topics to avoid stifling the budding industry.
Politico Pro (subscription required) (14 Jan.) 
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Artificial Intelligence: A Machine Can Do That
Machines that can build other "smart" machines are poised to help companies build AI technologies, even if they do not have extensive experience. What does this mean for internal audit?
IIA News
Artificial intelligence: The future for internal auditing
It is important that boards and other stakeholders understand stages in the artificial intelligence life cycle where internal audit's focus can provide positive effect. Read the latest issue of Tone at the Top to learn how the board can best support the CAE's efforts to ensure that the internal audit team is prepared to provide assurance over AI. Download the new issue and share it with your audit committee.
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Changes coming to the CIA exam syllabi
A job analysis confirmed the need to update the CIA exam syllabi to more closely align with the evolving responsibilities of today's leading internal auditors. Changes to the exam take effect in January 2019. Learn more about how the CIA exam will change.
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The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.
George Bernard Shaw,
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