Www.naplia.com Copyright 2013 Risk Management Stephen Vono, Principal NAPLIA.

www.naplia.comCopyright 2013

Risk ManagementRisk ManagementStephen Vono, Principal

NAPLIA

Copyright 2013www.naplia.com

The Risk EnvironmentThe Risk Environment• Culture• Risk Assessment: Employee & Client• Engagement Letters• Fraud• Cyber Risk


Culture


Risk Assessment: Employee & Client

• First line of defense• New client acceptance forms• Predecessor accountants• Background checks


Engagement Letters• Second line of defense• Comprehensive contract: not a fee agreement• Purposes:

– Define scope of engagement– Mutual responsibilities– Provide for contingencies– Prevent differing expectations


Percentage of Audit Claims(By Source of Claim)


Who Commits Fraud?

0

10

20

30

40

50

60Percent

Employees Management Owners

Position in the Organization


Who Commits Fraud?

0

100

200

300

400

500

600

700

800

900

Employees Management Owners

Median Loss by Position


Employee Fraud(Opportunity)

• Experienced employee• Lack of segregation of duties• Uninterrupted service–Annual vacations not required

• Weak management oversight


Client Risk Assessment(Centralizing the Process)

• Risk assessment committee• Must be willing to reject prospects and

terminate existing clients


Cyber Liability


First Party vs. Third Party

Employees

Accountant/Owner

ClientNon-client

First Party Third Party


Professional Liability vs. Legal Liability


Notification Letter• WISP• Notification laws• Best practices policies– Portal usage


Thank you!

www.naplia.com

Stephen [email protected] linkedin.com/in/stevevono @naplia

Www.naplia.com Copyright 2013 Risk Management Stephen Vono, Principal NAPLIA.

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