• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Individual Insurance Association

Extracts from this document...

Introduction

During the last decade, the Individual Insurance Association (IIA) has grown significantly that it is not only involve in the insurance business but also investments, savings, and checking accounts. In order to better serve the policyholders, the IIA decentralized its administrative operations. Additionally, the need to reduce administrative expenses has led the firm to digitize its processes, and presently nearly all processes are linked to a computer application. However, as the IIA keeps expanding several critical issues has risen as a result of the lack in corporate governance. Beginning with the formation of the Audit Committee when the IIA was founded, the IIA has shown lack of corporate governance. The evidence could be seen with the Audit Committee themselves performing the audit. This involvement has impaired the independence and objectivity as stated in the Code of Ethics Rule 2.1 and International Standard for the Professional Practice for Internal Auditing Standard Rule 1100. The Audit committee should not review and approve their own audits. ...read more.

Middle

The controller's role has definitely violated this standard as he was in charged with both the accounting and auditing process. Additionally, regarding the issues with the controller, as a person who plan and supervise the internal audit department, according to Code of Ethics Rule 4.1 should have necessary knowledge, skills, and experience; however, the controller, in this case, is lack of such requirement. With his inadequate background, he might have misdirected the Internal Auditors in performing the audit. One of the misconduct that might have been caused by either biased or lack of auditing knowledge of the controller was to direct the Internal Auditors to only review the input/output of the computer systems' control. Under International Standard Rule 1210. C1, The head of the Internal Auditor should have allowed the Internal Auditors to work together or consult with the expert to review the control of the computer's internal operations since they might have lack of knowledge in the computer operations. ...read more.

Conclusion

However, sometimes conflicts may have occurred between them as a result of different objectives: Internal Auditors are more operational focused and External Auditors are more financial statement focused. This problem can be solved with effective communication between the two; therefore, the Internal Auditors of the IIA should have good communication skills in addition to the auditing experience/background. Moreover, the out of hand decentralization has also been taken care by the implementation of matrix organization. This system enables the transparency of information between branches as well as within the organization. As a result, the internal auditors are able to perform more reliable audits and report for the Audit Committee. In conclusion, although in the beginning, there was inadequate corporate governance in place. After reviewing the actions that have been taken by the management, the IIA corporate governance seems to be back track. However, regular enforcement and training on the employee by the management and regular monitoring and audit by the internal audit department are required to maintain the good corporate governance. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Business Studies section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Business Studies essays

  1. Advance Professional Development

    Leadership Development Program is an important program in practice in good and well structured organisations. In this program they select the potential employees for taking over the future management positions and then provide them training, and educate them on how to carry out management activities.

  2. A Corporate Governance Review of Toyota

    The corporation has increased focus on corporate governance in the past years, and the initiatives and following related mechanisms will be looked at in the following. Management incentives To make sure that management work in the interest of owners, it is possible to adopt a incentive system.

  1. Business management

    YEAR CASH INFLOW 2009-2010 342981 2010-2011 394038 2011-2012 429586 2012-2013 466524 2013-2014 509800 Net return (profit) per annum= sum of all cash inflow-initial investment � Life of profit. Average rate of return= net return (profit) per annum � 100 � Capital outlay (initial cost)

  2. BP Financial analysis

    http://www.business.scotsman.com 4.4 Efficiency BP's total asset turnover ratio is dominated by the cost of oil and gas. BP has performed better than the industry average. Total asset turnover Brent crude oil USD$ 4.4 Efficiency Fixed net asset turnover The fixed net asset turnover ratio is a tool that is used to test management ability to generate income from assets.

  1. New business plan

    For other tourists groups such as from Japan, US or Australia, there is not such problem. Now with the development of the economics in China, both China and New Zealand Government are building a better relation and the current New Zealand government is making a free trade agreement with China, therefore the political risk is becoming smaller and smaller.

  2. MG 309 Strategic Management

    * Matching facts with the statements. Step 3 Final Report * Drafting of the report * Reviewing the report * Proof reading * Final drafting of the project. Limitations Faced 1. The organizations policy of confidentiality was also a problem. 2. The business does not have much information online.

  1. Business plan for Laundry Toaster laundry dryer.

    ? Lower levels of profitability throughout industry result in lower levels of marketing & product awareness. ? Majority of products are ?deferrable purchases? and therefore risk exposure to economic downturns is higher. ? High consumer expectations of value within the mid market wardrobe furniture sector.

  2. Ford Company Analysis - corporate structure and financial analysis

    Name (Connections) Board Relationships Title Anthony Earley Jr. 256 Relationships Director, Member of Nominating & Governance Committee, Member of Compensation Committee and Member of Sustainability Committee Jon Huntsman Jr. 47 Relationships Director, Member of Compensation Committee, Member of Nominating & Governance Committee and Member of Sustainability Committee Richard Manoogian 138 Relationships Director,

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work