The Experts below are selected from a list of 66 Experts worldwide ranked by ideXlab platform
Eva H G Hüpkes - One of the best experts on this subject based on the ideXlab platform.
-
The external Auditor and the bank supervisor: ‘Sherlock Holmes and Doctor Watson?’
Journal of Banking Regulation, 2006Co-Authors: Eva H G HüpkesAbstract:The involvement of external Auditors in the supervisory process differs significantly across countries. Under the dualistic (or indirect) supervisory system implemented in Switzerland, which dates back to the first banking act of 1934, the external Auditors play a pivotal role. Their mandate includes not only a financial Audit, which consists of the review of accounts and financial statements, but also a Regulatory Audit, which entails the assessment of compliance with all relevant licensing and operating requirements as well as other relevant prudential rules and standards. The Swiss Federal Banking Commission, as the supervisory authority of Swiss banks, relies heavily on external Auditors for the conduct of on-site examinations, though there are exceptions in some critical areas. Reliance on Audit firms mandated and compensated by the banks can give rise to conflicts of interest and incentive incompatibilities. These are addressed by a robust licensing and oversight regime and a well-articulated quality assurance programme. With the increasing reliance on risk-based supervision and growing role of the supervision in the validation of techniques used by banks to measure, manage and mitigate their risks, the Swiss supervisory system faces a number of new challenges. These arise from the increasingly blurred distinction between oversight of the Audit process and its implementation and the respective roles and responsibilities of the external Auditor on the one hand and the supervisor on the other.
Blagica Jovanova - One of the best experts on this subject based on the ideXlab platform.
-
External Audit and relation between internal Auditors, supervisory body and external Auditors of the banking sector in the Republic of Macedonia
SSRN Electronic Journal, 2012Co-Authors: Dushko Josheski, Blagica JovanovaAbstract:There are different types of Audit, such as financial Audit, Regulatory Audit, operational Audit of performances, Audit of information systems, environmental Audit and others. But basically, we distinguish two types of Audit which will be the main focus of attention in this work. External Audit, an Internal Audit. In most countries, the external Auditor from the public sector reports to parliament and, where relevant, the private sector Auditor reports to government (e.g. ministry of finance) and/or the public sector external Auditor (the supreme Audit institution). An efficient system of internal Audit is an invaluable source of information for the management of the bank, its supervisors and the quality of the internal control system in that organization.
Phedon Nicolaides - One of the best experts on this subject based on the ideXlab platform.
-
Accountability of the ECB’s supervisory activities (SSM): Evolving and responsive
The Maastricht Journal of European and Comparative Law, 2020Co-Authors: Phedon NicolaidesAbstract:This article develops a theory of accountability as a means of increasing Regulatory effectiveness in complex policy environments and applies it to the supervisory powers that have been assigned to the European Central Bank through the Single Supervisory Mechanism. It finds that the use of the Single Supervisory Mechanism by the European Central Bank has been evolving. The Single Supervisory Mechanism / European Central Bank has expanded and improved the information it provides to other European Union institutions and the public, and has progressively elaborated the explanation of its decisions and Regulatory instruments. These developments are welcome because they are indications of an accountable institution that seeks to demonstrate how its actions meet its obligations. However, there is still lack of a performance benchmark against which the actions of the Single Supervisory Mechanism /European Central Bank can be evaluated and of expert review of Single Supervisory Mechanism /European Central Bank decisions. In complex policy environments it is not possible for outsiders to assess the soundness of Regulatory actions without access to confidential information. Therefore, this article proposes that the European Parliament establishes a policy or Regulatory Audit by external experts who can assess such information on a confidential basis.
-
Accountability of the ECB's Single Supervisory Mechanism: Evolving and Responsive
SSRN Electronic Journal, 2018Co-Authors: Phedon NicolaidesAbstract:This paper develops a theory of accountability as a means of increasing Regulatory effectiveness in complex policy environments and applies it to the supervisory powers that have been assigned to the European Central Bank through the Single Supervisory Mechanism. It finds that the use of the SSM by the ECB has been evolving. The SSM/ECB has expanded and improved the information it provides to other EU institutions and the public and has progressively elaborated the explanation of its decisions and Regulatory instruments. These developments are welcome because they are indications of an accountable institution that seeks to demonstrate how its actions meet its obligations. However, there is still lack of a performance benchmark against which the actions of the SSM/ECB can be evaluated and of expert review of SSM/ECB decisions. In complex policy environments, it is not possible for outsiders to assess the soundness of Regulatory actions without access to confidential information. Therefore, this paper proposes that the European Parliament establishes a policy or Regulatory Audit by external experts who can assess such information on a confidential basis.
James F Smith - One of the best experts on this subject based on the ideXlab platform.
-
the impact of anecdotal data in Regulatory Audit firm inspection reports
Accounting Organizations and Society, 2013Co-Authors: James S Wainberg, Thomas Kida, David M Piercey, James F SmithAbstract:A critical and pervasive component of firm-specific Audit firm inspection reports is the inclusion of detailed descriptions of the deficiencies uncovered by inspection teams. Prior research in psychology indicates that people are likely to focus on such anecdotal information without adequately considering the statistical context provided (e.g., the number of Audits that the regulator inspected to find those deficiencies), thereby leading to misperceptions regarding Audit firm quality. In this study, managers and other business professionals assumed the role of an Audit committee member tasked with evaluating two Audit firms. Participants were provided with firm-specific inspection reports where we manipulated both the number of deficiencies reported as well as the number of Audits that were inspected at each firm. Our results indicate that participants made decisions consistent with having ignored, or underweighted, the implications of the statistical data provided. That is, participants exhibited an anecdotal bias by focusing on the number of deficiencies reported without appropriately considering the statistical context. This finding is important as it indicates that the common practice of including lists of deficiencies in firm-specific statutory inspection reports can lead to misperceptions of Audit firm quality. In addition, we test and provide evidence that two easily implemented decision aids can help to mitigate this problem. Our findings should be of particular interest to Audit regulators that currently include, or are considering including, lists of deficiencies in firm-specific reporting. Our study should also be of interest to investors, Audit firms, Audit committees, managers, researchers, and other stakeholders interested in Auditor oversight, Auditor reputation and measures of Auditor quality.
Ralph Waldo Emerson - One of the best experts on this subject based on the ideXlab platform.
-
Root Cause Analysis versus Shallow Cause Analysis: What’s the Difference
2020Co-Authors: Ralph Waldo EmersonAbstract:Does Regulatory compliance with RCA guidelines ensure patient safety? Many Risk Managers (RM) today face overwhelming tasks and must prioritize them to ensure patient safety. What is the difference between troubleshooting, problem solving and root cause analysis? Are the outcomes different when we use The 5-Whys, The Fishbone or a Logic Tree? Can deficiencies in our approach to RCA increase the risk of harm to the patient? These questions will be discussed in depth and contrasted using a common example to determine if we are using Root Cause Analysis or Shallow Cause Analysis. “Cause and effect, means and ends, seed and fruit, cannot be severed; for the effect already blooms in the cause, the end preexists in the means, the fruit in the seed." Ralph Waldo Emerson, 19th century Transcendental philosopher from Selected Writings of Ralph Waldo Emerson Regulatory Compliance Versus Patient Safety We will start this discussion with a recent quote from an article in Quality Digest: “Is the healthcare industry in denial when it comes to practicing Six Sigma? The answer, unfortunately, is yes. Although the industry is slowly adopting the methodology, the majority of these initiatives aren’t designed to improve the quality of the medical treatment offered to patients. Instead, most health organizations focus on improving care from the administrative side. As a result, patients aren’t getting the quality improvements to which they are entitled. The real issues facing healthcare are ignored due to medical practitioners who are afraid to admit that the lack of quality care is a result of their own errors and inefficiencies.” While this article focused on the specific application of Six Sigma, it may as well have been written about Root Cause Analysis (RCA) as well. The driving force behind statements like the above is that Regulatory compliance is being confused with patient safety. We are being led to believe that if our RCA efforts are compliant, then the patient is safer. In the quote above we are able to be compliant yet not affect the quality of patient care. That should defeat the purpose of the intent of the regulation. If it does not, then the regulation itself has loopholes. The question boils down to, if we pass a 1 Brue, Greg. The Elephant in the Operating Room. Quality Digest. June 2005. Pgs. 49 – 55. Regulatory Audit of our investigation practices, does that ensure the patient will be any safer? No. For the many that will read this paper they will be able to reflect on their own experiences under such conditions. They will see, think back and realize that success was tied to passing the Audit as opposed to linking their analysis effort to how the patient was made safer. This author has been unable to find credible studies that indicate that a compliant organization’s patients are substantially any safer than a non-compliant organization’s patients. What happened to the direct link to patient safety? It has been lost to the desire for compliance and securing funds to maintain the status quo. The concept of true Root Cause Analysis has been replaced with the concept of Shallow Cause Analysis. Analytical Process Review: Shallow Cause Analysis? Shallow Cause Analysis (SCA) represents a less disciplined approach to patient safety than true Root Cause Analysis (RCA). Many of the tools on the market today that are being referred to as Root Cause Analysis, fall short of the essential elements of an RCA. Typical tools in this category are the 5-Why’s, the fishbone diagram and many form based RCA checklists. Many of these tools came from the Quality initiatives, which flourished in the 70’s and 80’s and remain ingrained in American corporations today. We refer to these as tools and just like tools in a toolbox; we must use the right tool for the right project. Therefore we must have a clear understanding of the scope of the project before deciding which tool is most appropriate. When determining the breadth and depth of analysis required, we must explore the magnitude and severity of the undesirable event at hand. Typically, we would not conduct formal RCA on events, but rather their consequences. If we have an event occur, an undesirable outcome of some sort, then its priority is usually proportional to the severity of its consequences. When is it appropriate to use brainstorming versus troubleshooting versus problem solving versus root cause analysis? While a hundred definitions likely exist for each of these terms, we choose to use the following ones: Brainstorming: A technique teams use to generate ideas on a particular subject. Each person in the team is asked to think creatively and write down as many ideas as possible. The ideas are not discussed or reviewed until after the brainstorming session. Troubleshooting: To identify the source of a problem and apply a solution to "fix it“. Problem Solving: The act of defining a problem; determining the cause of the problem; identifying, prioritizing and selecting alternatives for a solution; and implementing a solution. 2 http://www.asq.com. American Society of Quality 3 http://www.fairfield.k12.ct.us/develop/cdevelop02/glossary.htm 4 http://www.asq.com. American Society of Quality Root Cause Analysis: A method used to identify and confirm the causes of performance problems or adverse trends and identifies the associated corrective actions needed to prevent recurrence of the causes. Root Cause Analysis (RCA) techniques apply investigative methods to unravel complex situations to determine root causes of performance problems, identify associated causal factors, check for generic implications of an event, determine if an event is recurrent, and to recommend corrective actions In order to recognize what is Root Cause Analysis and what is NOT Root Cause Analysis (Shallow Cause Analysis), we would have to define what criteria must be met in order for a process and its tools to be called Root Cause Analysis. The following are the essential elements of a true Root Cause Analysis process: 1. Identification of the Real Problem to be Analyzed in the First Place 2. Identification of the Cause-And-Effect Relationships that Combined to Cause the Undesirable Outcome 3. Disciplined Data Collection and Preservation of Evidence to Support Cause-AndEffect Relationships 4. Identification of All Physical, Human and Latent Root Causes Associated with Undesirable Outcome 5. Development of Corrective Actions/Countermeasures to Prevent Same and Similar Problems in the Future 6. Effective Communication to Others in the Organization of Lessons Learned from Analysis Conclusions Brainstorming is traditionally where a collection of experts throw out ideas as to the causes of a particular event. Usually such sessions are not structured in a manner that explores cause and effect relationships. Rather people just express their opinions and come to a consensus on solutions. When comparing this approach to the essential elements listed above, brainstorming falls short of the criteria to be called RCA and therefore falls into the Shallow Cause Analysis category. Troubleshooting is usually a “band-aid” type of approach to fixing a situation quickly and restoring the status quo. Typically troubleshooting is done by individuals as opposed to teams and requires no proof or evidence to back up assumptions. This off-the-cuff process is often referred to as RCA, but clearly falls short of the criteria to qualify as RCA. Problem Solving comes the closest to meeting the RCA criteria. Problem Solving usually is team based and uses structured tools. Some of these tools may be cause and effect based some may not be. Problem solving oftentimes falls short of the RCA criteria because it does not require evidence to back up what the team members hypothesize. When assumption is permitted to fly as fact in a process, it is not RCA. 5 http://www.alwaysimproving.com 6 Latino, Robert J.PROACT Approach to Healthcare Workshop. January 2005. www.proactforhealthcare.com Analytical Process Disciplined Data Collection Required? Typically Team (T) Versus Individual (I) Based Formal Cause And Effect Structure Requires Validation of Hypotheses Using Evidence Identification of Physical (P), Human (H) and Latent (Latent) Root Causes Brainstorming N T N N P or H Troubleshooting N I N N P Problem Solving N T N N P or H Root Cause Analysis Y T Y Y P, H & L Figure 1: Comparison of Analytical Processes to RCA Essential Elements Analytical Tools Review The goal of this description is not to teach how to use these tools properly, but to demonstrate how they can lack breadth and depth of approach. Analytical tools are only as good as their users. Used properly, any of these tools can be used comprehensively to produce good results. However, experience shows the attractiveness of these tools is actually their drawback as well. These tools are typically attractive because they are quick to produce a result, require few resources and are inexpensive. These are the very same reasons they often lack breadth and depth. Let’s start with the 5-Whys. While there are varying forms of this simplistic approach, the most common understanding is the analyst is to ask the question “WHY?” five times and they will uncover the root cause. The form this approach may look like is as follows: