Archive for March, 2009

Deutsche Bank 2009 Hedge Fund Survey Claims Risk Management & Transparency are Keys to Success

Published March 30, 2009 Analyst Research , Breaking News Leave a Comment
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Last week Deutsche Bank published its annual Hedge Fund Survey for 2009. Although the report provides an in-depth summary of current market dynamics and benefits of alternative investing, I thought it was worth noting that risk management and transparency were among the top selection criteria for investors in hedge funds. The report also mentions building regulatory pressures, which is in line with what we have heard lately from the Fed and the SEC.

By now, its safe to say that spreadsheets are the leading tool for managing hedge fund investment strategies. With hedge funds predicted at $200 Billion for 2009, a strategy for monitoring and controlling these critical spreadsheets would be prudent for increasing transparency.

You can read the press release and download the full report here.

Fraud Prevention & Detection for Mission Critical Spreadsheets

Published March 25, 2009 Events 2 Comments
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Thursday, March 26th, 2009 (10:30 am CT / 12:30 pm ET) –  Join Prodiance and Jefferson Wells for this “must-see” online event to learn about common spreadsheet fraud scenarios and how technology and best practices can help effectively mitigate risk due to fraud while improving oversight and transparency. Click here to register for the event.

Schapiro’s Testimony Calls for Fraud Control

Published March 17, 2009 Breaking News , Regulatory Mandates 3 Comments
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Newly appointed SEC Chairman Mary Schapiro gave a testimony before the Subcommittee on Financial Services and General Government on March 11, 2009. At several points in her speech, Schapiro made reference to the need for better fraud controls to deal with the complex trading strategies and financial products that exist in today’s market. As we have learned, the trading environment for derivatives is fraught with complex spreadsheet models. Schaprio also made reference to accounting issues and fraud related to off-balance sheet liabilities, and the unregulated world of credit default swaps.

What is common among these scenarios? In many cases, enterprise IT applications have been replaced with complex, uncontrolled, and unmonitored spreadsheets and EUCs. Although their flexibility has enabled firms to model very complex scenarios, left uncontrolled, these spreadsheets are the first place the SEC should look for any fraudulent activities, financial loss or internal control gaps.

You can read the full speech here.

Your comments?

Bernanke Speech Highlights Failure of Risk Systems

Published March 12, 2009 Breaking News 1 Comment
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In his speech yesterday to the Council on Foreign Relations in Washington D.C., Bernanke highlighted the failure of risk management systems of the private sector as a catalyst in the financial crisis. He went on to state that current government regulatory regimes were inadequate for efficient investment, and that the Fed will take forceful actions moving forward to restore investor confidence and credit by reducing “systemic” risk.

Specifically, what are the “systemic” or inherent risks financial institutions face, and will the reform that is forthcoming address specific control gaps such as unmonitored and uncontrolled spreadsheets and EUCs?

Let’s hear your comments!

You can read the full speech here.

Deloitte on Spreadsheet Risk

Published March 9, 2009 Auditor Guidance Leave a Comment
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As a follow-up to my recent survey on modeling spreadsheet risk, I thought this post would be very relevant on how companies define spreadsheet risk. The latest white paper on the topic from Deloitte recommends ranking spreadsheets according to risk level using Materiality and Complexity.

Here is an sample risk grid (software template) from Prodiance eDiscovery software that automates this process.

Prodiance Risk Template

Prodiance Risk Template

You can download the full white paper from Deloitte here.

SEC Urges Companies to Keep Up Compliance Programs

Published March 5, 2009 Breaking News , Regulatory Mandates Leave a Comment
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In case you missed it in the holiday shuffle, in December of 2008 the SEC sent an open letter to CEOs of registered firms urging them to keep up compliance programs despite cost cutting efforts. This call for more transparency and governance is the path toward bolstering public confidence and fairness in financial markets, according to SEC director Lori Richards.

You can read the full letter on the SEC’s web site here.

Welcome to EndUserComputing.org!

Published March 2, 2009 Uncategorized Leave a Comment

We’re taking a leadership position on educating organizations about the risks associated with End-user Computing. We hope you find this blog to be a valuable resource to find the latest guidance from leading audit firms, information on regulatory mandates affecting spreadsheets and EUCs, cases of errors and fraud, press articles, industry white papers, best practices and solutions.

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