Graham,
Igor Ansoff should not approve and for the following reasons.
Mr M may be a very nice chap indeed; and his work may be of the highest
quality. However, if he is acting in the way that is being suggested then he
is breaking the first rule of internal control and any Examinations Boards
for which he works has a duty either to dismiss him from his post as
examiner or to insist that stops all his other activities that are causing
the POTENTIAL conflict of interest.
Notice that I have stressed the word potential because, as you point out, we
are in danger of finding Mr M guilty without a fair trial.
Nevertheless, let me give you a few snippets about the nature of internal
control systems and you can see how well Mr M and his Examination Board
colleagues are doing: not all of the following points are necessarily
relevant but I have left them here as they comprise a full list that might
be useful in your classes anyway. Similarly, the context of the extract is
not perfectly suited to the current debate; but it doesn't take much effort
to see the relevance of the points being made.
"In order to try to ensure that reasonable internal control systems are put
in place, system analysis and design must incorporate the following
fundamental concepts.
a. Segregation of duties
Staff responsibilities must be organised to ensure that key tasks are
segregated to reduce the possibility of error, fraud or the manipulation of
accounting or other records. Specific responsibilities to separate are
custody, authorisation and approval, recording and execution of a specific
transaction.
b. Physical access controls
Only authorised personnel should have access to the records and assets of an
organisation. A comprehensive recording system will need to be established
to maintain an audit trail of the location, custody and ownership of assets.
In addition, access to and use of assets need to be carefully controlled.
c. Authorisation and approval controls
All transactions should require authorisation or approval by an appropriate
responsible person. Authorisation procedures should be estabilshed to
incorporate authorisation limits and the means by which approval is to be
given.
d. Management control
Directors must ensure that the control system is actually operated and
adhered to. Periodic review of the adequacy of systems must be undertaken to
test adherence to pre-agreed standards. This may take the form of an
internal audit function.
e. Supervision and periodic reconciliation
All staff members need to be aware that their work may be checked. Knowledge
of this should help to reduce the risk of error, falsification or fraud, The
system should be designed to ensure periodic reconciliation in all aspects
of the business. Ideally reconciliation should be completed by someone who
is independent of the recording and execution of the specific task.
f. Arithmetical and accounting controls
Systems should be in place to ensure that transactions are accurately
recorded. Management must ensure that techniques such as batch control
totals on inputs, reconciliations, variance analysis and analytical review
are used to try to ensure completeness and accuracy of records.
g. Personnel
The quality of any system will be a function of the competence and integrity
of those who are responsible for operating the system. The recruitment,
training and adequate remuneration of appropriately qualified and
experienced staff is vital.
Source: Internal audit and control
by Peter Plant
01 Nov 1998
So, some of the key words and phrases leap out of this list:
segregation of duties
responsiblities
authorisation
approval
control
Directors must ensure that the control system is actually operated and
adhered to
error
falsification
fraud
competence
integrity
Does the current case pass the test in all of these areas? If so, good; but
then someone must take away the POTENTIAL for a breakdown. If not, then the
current debate is clear on the action that must now be taken.
In my previous post on this matter, I pointed out that other examination and
professional bodies simply would never allow Mr M to act in his multiple
roles ... except that it is only his activities as chief examiner that is
causing the problem.
Duncan Williamson
----- Original Message -----
From: "Graham Crewe" <[log in to unmask]>
To: <[log in to unmask]>
Sent: Tuesday, July 02, 2002 10:18 PM
Subject: Re: Chris Sivewright's posting - a topic of interest for sensible
discussion?
> I'm quite surprised to see so much negative posting
> about Ian Marcousé (there, I said it!!!). Although
> there IS a potential conflict of interest, he has
> always appeared to act totally ethically, for example
> diseminating latest thinking through his regular
> column in the Business Review teacher's guide.
>
> I think that the textbook he edits is excellent and
> far superior to others i have found on the market
> (e.g. Hall, Raffo and Jones).
>
> AQA appears to lead the way in terms of information
> provided to centres, transparency, fair (and
> interesting) exam papers etc. E.g. I have always
> wanted a decent scheme of work provided by OCR
> Economics. We have had several alternative suggestions
> from AQA Business Studies.
>
> Whilst a potentially dangerous situation such as this
> must have its checks and balances, that does not mean
> that it should necessarily be stopped.
>
> If someone is extremely good at their job and capable
> of establishing a brand name out of what they do, as
> he has done, then why not??? Surely we business
> teachers should be admiring the way he has developed
> his core capabilities and taken them into new markets.
> Igor Ansoff would approve!
>
> Good luck to him!
>
>
<extraneous text deleted>
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