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Protection notice / Copyright noticeConfidential / © Siemens AG 2009. All rights reserved. Oversight and Compliance Public and Private Sector models Mark.

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Presentation on theme: "Protection notice / Copyright noticeConfidential / © Siemens AG 2009. All rights reserved. Oversight and Compliance Public and Private Sector models Mark."— Presentation transcript:

1 Protection notice / Copyright noticeConfidential / © Siemens AG 2009. All rights reserved. Oversight and Compliance Public and Private Sector models Mark Gough Deputy Head Compliance Investigations Corporate Legal and Compliance, Siemens AG IAS Conference, Brussels, 13 October 2009

2 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 2 Overview 1.History 2.Audit and Investigation – Differences; Standards 3.Feeding Investigations 4.UN Model 5.Siemens Model 6.Lessons learned 7.Going Forward

3 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 3 History The Gough Experience – History Repeats United Nations 1996 – 2008 (Investigations Division) - building the unit; conducting/managing investigations; anti-corruption strategies Siemens AG 2008 to date (Compliance Investigations) - Building the unit; conducting/managing investigations; anti-corruption strategies

4 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 4 Audit and Investigation Differences: Audit = control of systems and regulations; lacunas in controls; inferential; consultative IAA Standards: Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. Investigation = control of organizational behaviour and ethics; lacunas in ethical and/or moral behaviour; evidentiary; defensive/adversarial and consultative Investigation is a legally-based, fact-gathering process to identify personal culpability for violations of internal rules, regulations and national laws and make recommendations for sanctions.

5 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 5 Audit – Dealing with Fraud (IIA Standards) 1210 - Proficiency 1210.A2 - Internal auditors must have sufficient knowledge to evaluate the risk of fraud and the manner in which it is managed by the organization, but are not expected to have the expertise of a person whose primary responsibility is detecting and investigating fraud. (IIA International Standards for the Professional Practice of Internal Auditing)

6 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 6 Feeding Fraud and Corruption Investigations Audit Support for Successful Investigations -Heavy reliance on input from experienced colleagues (friendly) -Audit reports and auditors - rich veins of information -Information collection tasking of audit groups – yes or no? -Formal or informal audit reporting to investigations -Audit cycles and joint activity

7 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 7 The United Nations Model Internal Audit Division The internal auditing function is an independent, objective, assurance and advisory activity designed to add value and improve the Organization's operations. Internal audits help the Organization to accomplish its objectives by bringing a systematic, disciplined approach to evaluating and improving the effectiveness of risk management, control and governance processes. According to United Nations Financial Regulation 5.15, OIOS is responsible for conducting independent internal audits in accordance with the International Standards for the Professional Practice of Internal Auditing. Internal audit reports contain recommendations intended to address shortcomings identified while reviewing specific management activities or operational areas. Implementation of the most critical audit recommendations by management is carefully tracked. Programme managers are expected to promptly act on the audit findings and recommendations and to also report to OIOS on the status of implementation. OIOS follows up and monitors its audit recommendations until they are fully implemented.

8 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 8 The United Nations Model

9 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 9 The United Nations Model – Feeding Investigations Internal Audit Division Manual: B.3.1.1 Identification of Fraud Indicators - IAD staff shall immediately report to the Director any possible cases of fraud or other major irregularity that comes to their attention, and which may require investigation by the OIOS Investigations Division. In addition to providing the Investigations Division with information and documentation on any such cases, the auditor may, if required, be asked to assist in the investigation itself.

10 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 10 The United Nations Model – Issues for consideration Common Management – Investigations and Audit - need for separation? Debates in OIOS - money, people and influence Support to Investigations: - Formalised - Is this correct? Implementation of Recommendations – does it happen?

11 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 11 The Siemens Model The mission of Siemens Corporate Audit (CF A) is to add value and improve the worldwide operations and processes of Siemens AG and its Affiliated Companies (Siemens), by independently and objectively evaluating and reporting on Siemens' financial reporting integrity, the effectiveness of risk management and internal control systems, and the adherence to Siemens' compliance policies in a systematic and disciplined manner. CF A shall conduct – in accordance with an enterprise-wide, risk-based schedule established in agreement with the Managing Board and Audit Committee – the following audits, including, but not limited to: (i) financial audits, (ii) operational audits, (iii) information technology audits, and (iv) compliance audits in coordination with the Chief Compliance Officer. The results of these audits will be reported to the Managing Board and the Audit Committee, as deemed appropriate. The audits conducted by CF A will meet or exceed the International Standards for the Professional Practice of Internal Auditing issued by The Institute of Internal Auditors.

12 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 12 The Siemens Model Audit Historical Problems in Detection Complete Revision of Structure (Financial Audit, Operational Audit, Compliance Audit, Forensic Audit, IT Audit – plus Operational Review) Resourcing and Management - Separated – 500 audit staff worldwide in 4 hubs (USA, China, India, Germany) - 600 Compliance staff worldwide (17 investigators plus pool) Remediation responsibility – only in Compliance function Support to Investigations – Not so formalised – but connected

13 Protection notice / Copyright notice

14 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 14 Global Compliance Organization – Corporate Functions Corporate Units Compliance Officer Sector Compliance Officers Compliance Policies, Communication & Training Compliance Program, Projects & Reporting Compliance Operating Officer Disciplinary Sanctions Compliance Helpdesk & Monitoring Compliance Investigation Regional Compliance Officers (RCOs) Compliance Legal Division Compliance Officers (DCOs) Chief Compliance Officer Cross Sector Compliance Officers (DCOs) Compliance Global Coordinators Compliance represented in Managing Board Embedded in business units and regions Member of the Managing Board General Counsel

15 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 15 Lessons Learned – Successful Audit and Investigation Independence of Audit and Investigation: - Must be real - not perceived - Must have funding to mirror responsibilities - Must be able to independently determine audit plan Management of Audit and Investigation: - Must be committed to strategic common interest - Must be audit or legally trained - Must be open to information sharing (need to know concept) - Must be investigation savvy

16 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 16 Going Forward Which model feeds investigations best? Are they different? Audit Specialisation – Forensic and IT Audit data collection (+++) Notification System formalised Reduction of Competition Agreed Common Goals

17 Siemens Compliance Protection notice / Copyright notice Copyright notice 2009-10-13Mark GoughPage 17 Thank you for your attention! Confidential / © Siemens AG 2009. All rights reserved. Mark Gough Deputy Head Compliance Investigations Siemens AG Corporate Legal and Compliance CL CO I Wittelsbacherplatz 2 80333 Munich, Germany Phone: +49 89 636 32844 Fax: +49 89 636 1332844 Mobile: +49 1522 8874914 E-mail: mark.gough@siemens.com


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