| 1. |
Report on the 2010 Inspections of the Quality of Audits Conducted by Public Accounting Firms |
Date published: April 2011
Source: Canadian Public Accountability Board (CPAB)
Description: Since its incorporation in 2003, CPAB has issued seven annual public reports on its inspection results. The first five reports summarized inspection findings. Two years ago, CPAB changed its approach to focus on the root causes of audit deficiencies and to highlight the key recommendations that, if implemented, would have the greatest impact on improving audit quality.
In the past year, CPAB has enhanced its risk assessment capabilities and now uses a more robust risk analysis process to identify higher-risk firms and audit engagements, improving the effectiveness of its inspections. CPAB has also increased the frequency of its inspections of firms that audit fewer than 100 reporting issuers.
Key findings:
- The report states that audit quality in Canada continues to be sound.
- Despite the above finding, it is disappointing to note that the 2010 inspections showed no significant improvement in audit quality from the previous year.
- The report identifies the major areas where improvement would enhance audit quality. These include enhancing engagement supervision and review, enhancing the application of professional skepticism, improving substantive analytical procedures, providing sufficient audit evidence, improving communication with Audit Committees, preparing significant issues and completion memos and enhancing consultation on
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complex, non-routine transactions.
- CPAB has highlighted the key recommendations that will have the greatest impact on improving audit quality.
There are challenges for audit firms and reporting issuers such as the pressures being placed on audit firms due to the uncertain economic times and the transition to new standards.
Firms and reporting issuers are urged to maintain their focus on audit quality in the face of these pressures.
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| 2. |
Comparing Canadian and Global Trends – Global Corporate Counsel Survey |
Date published: 2011
Source: Deloitte
Description: The Canadian research findings of this report are based on a global survey and research conducted in 2010. Of the Canadian respondents, 49% are general counsel, chief legal officers or equivalent; 33% are senior legal counsel; 11% are legal counsel; and 7% fall into other categories.
Key (Canadian) findings:
- Approximately 80% of respondents
indicate that, at a minimum, they are members of their
organization’s management or executive team.
- General counsel are experiencing a
rising scope of responsibility, with 62% participating in
setting corporate strategic direction but less likely to serve on boards (3% now vs.
4% five years ago).
- 82% of respondents believe that general
counsel have a greater business influence than partners
of large law firms.
- In the past five years, corporate
counsel’s standing has improved in the legal profession
(72%), in the corporate community (66%), in the
organization (60%) and in the industry (51%).
- To provide value to the
organization, 61% of respondents say corporate
counsel must deliver the best outcomes to legal
problems.
- In 97% of the cases,
general counsel are contacted first when their
companies experience serious legal or regulatory
issues.
- 63% of respondents
say corporate counsel have some influence on the
way in which law firms provide legal services.
- In the past five years, 53% of respondents have decreased the amount of legal work they outsource.
- The primary reasons to
outsource legal work are to access special expertise
(88%) and to access additional resources (67%).
- Email is the method
preferred by 75% of respondents for receiving advice
from external firms and professional service firms.
- 52% of respondents agree
that their highest legal risk pertains to maintaining
regulatory compliance.
- According to 79% of
respondents, regulatory activity is on the rise.
- Regulatory
investigations focus predominantly on fraud (44%),
insider or other unlawful trading (41%) and stock
market disclosure (38%).
- 75% of respondents say
regulatory disputes are predominantly resolved
through negotiated settlements.
- While 84% of respondents have an
e-record management and retention policy, only
54% can confidently procure relevant e-documents if
required.
- The primary challenges
related to gathering and preserving information are
volume of electronic documents (76%), timeliness of
gathering information (61%), and cost of gathering
information (56%).
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| 3. |
Cloud Computing Survey: Cloud Adoption, Concerns and Motivations |
Date published: March 2011
Source: Bitcurrent Inc.
Description: This survey looks at the cloud providers people are using today, their main reasons for using utility computing, and the primary concerns around on-demand infrastructure. Approximately 150 responses were received from a relatively wide cross-section of industries, company types, and company sizes.
Key findings:
- The top motivators drawing companies into the cloud are:
- lower costs
- elasticity
- speed of deployment
- access to a wide set of services
- Concerns about clouds are:
- data privacy
- lack of control over infrastructure
- lock-in to a cloud platform
- poor performance
- inability to properly escalate a problem
- The research suggests that there is a significant variance in opinion about cloud adoption, motivations, and concerns across types of organizations, sizes, job descriptions, and industries.
- Regarding overall usage, public laaS and SaaS, along with other on-demand services, are the most prevalent.
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| 4. |
Risk and Finance Manager Survey |
Date published: 2011
Source: Towers Watson
Description: This second annual risk management survey examines certain
practices, including how North American companies use outside resources,
tools and frameworks to assist them in addressing risk.
Key findings:
- 43% of respondents have a formal process for
determining and communicating risk appetite, risk
tolerance and/or risk limits.
- 91% either do not consider or have
only slightly considered the impact of high-profile
disasters on risk modeling and business continuity
programs.
- 30% say that they don’t use statistical models
to evaluate risk control or claim management
strategies, and another 26% rely on risk control
and claim providers to manage for their companies
based on knowledge and experience.
- The data indicates companies’ attention to
network security and privacy issues would benefit from
purchasing a liability policy, an action taken by only
27% of respondents.
- Other findings indicate that what respondents want
most from their insurance brokerage services are
industry knowledge (with 52% ranking this their
highest priority) and market leverage based on
premium volume (22%).
- Companies are not doing enough to manage issues related to network security and privacy liability — a growing source of risk for virtually all organizations.
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| 5. |
Canadian Supplement to the 2010/2011 Global Family Business Survey |
Date published: 2011
Source: PricewaterhouseCoopers
Description: What family businesses have to say about their major concerns, the environment in which they operate, and the unique factors that affect their business.
Key findings:
- 70% of respondents said they believe that being a family business helped them get through the economic crisis.
- 97% of companies reported they are very or somewhat competitive in their markets.
- 56% cited recruitment of skilled labour as their top internal challenge.
- 74% cited market conditions as their top external issue.
- 95% of respondents were not aware of international inheritance tax implications.
- 66% are striving for growth and expansion in the next 12 months.
- 63% of family businesses surveyed do not export goods and services to foreign markets.
- 49% of participants have not chosen their next business leader.
- 29% said they had conflict resolution procedures in place.
- 33% of family business leaders who are anticipating a change of leadership plan to sell to a private equity investor.
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| 6. |
Many of the World’s Largest Public Companies Have No Women on Their Boards |
Date published: 2011
Source: GovernanceMetrics International/ESG Research
Description: The report includes statistics for countries in industrialized and emerging markets, supersectors and sectors, including the countries and sectors with the highest and lowest proportion of women on boards as well as discussions of several country-specific market developments that provide context to underlying data.
Key findings:
- Of the roughly 4,200 companies covered
from 2009 to 2011, the global aggregate percentage of board seats held by women has
shown a steady but modest increase from 9.2% to 9.8%.
- Overall, there has been little
change in board leadership: one in fifty companies covered had a female
chair in 2011; the same proportion as in 2009. The percentage of Canadian companies with a female chair remains stagnant at 2.3%.
- In 2011, 6.9% of audit committees, 6.4% of governance/nominating committees
and 7.0% of remuneration committees had a female chair. This is up respectively from
5.9%, 5.8% and 5.7% in 2009.
- There has been a general
increase in the percentage of key board committees with at least one female member,
but these percentages are around 30% of companies globally in each
committee category.
- The three countries with the highest
aggregate percentage of female directors were Norway (35.6%), Sweden (27.3%) and
Finland (24.5%).
- In Canada there has been minimal change in overall board diversity. The aggregate
percentage of women on boards has barely budged from 12.1% to 12.9% in the last
three years.
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| 7. |
Opportunities and Obstacles for Expanding the Finance Function |
Date published: March 2011
Source: KPMG/CFO Research Services
Description: This report examines senior finance executives' views on the role of the corporate finance function and the aspirations for the years ahead. Large countries around the world were contacted, and a total of 443 responded to the survey.
Key findings:
- Senior finance executives generally give finance high marks for meeting recent economic challenges, citing their high credibility with the C-suite, the board of directors, and other stakeholders; good management of internal costs; and effective service to clients elsewhere in the company.
- In the years ahead, finance executives will seek to further improve their ability to support the highest-value activities that lead ultimately to better business performance.
- On the role of the finance function, respondents see their companies in a strong competitive position that is tied to market-oriented innovation.
- More than half of finance executives surveyed say their company has an advantage over the competition in its product or service differentiation.
- Three out of four say their companies have either achieved better shareholder return than their rivals, or are at parity with them, while four out of five say their companies enjoy either better or equal profitability.
- Responses are more evenly split, however, on the issue of cost advantage compared with their competitors.
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| 8. |
Six Key Trends that are Shaping the Business World |
Date published: 2011
Source: Ernst & Young
Description: The report Tracking Global Trends looks at six broad, long-term developments that are shaping our world.
Key trends:
- Emerging markets increase their global power
- Cleantech becomes a competitive advantage
- Global banking seeks recovery through transformation
- Governments enhance ties with the private sector
- Rapid technology innovation creates a smart, mobile world
- Demographic shifts transform the global workforce
The three underlying drivers that have helped establish and perpetuate these trends are:
- Demographic shifts. Population growth, increased urbanization, a widening divide between countries with youthful and quickly aging populations and a rapidly growing middle class are reshaping the business world and society as a whole.
- Reshaped global power structure. As the world recovers from the recession, the rise of relationships between the public and private sectors has shifted the balance of global power faster than most could have imagined just a few years ago.
- Disruptive innovation. Innovations in technology continue to have massive effects on business and society. Emerging markets are now becoming hotbeds of innovation, especially in efforts to reach the growing middle class and low-income consumers around the globe.
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