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Hi,
I am thinking about starting the OBU project but still undecided about the topic area. I currently work in one of the Big4 audit firms in my country and was thinking of using the company as my subject for the project.
I am currently debating on three topics:
(1) Topic 8 – Financial and non-financial analysis over a three year period. Obviously studying ACCA, it was my first go to topic as most people doing the project. The topic is easier and more confident to analysis and discuss. However being such an easy target, I am questioning the benefit of choosing such topic.
(2) Topic 16 – The financial and operational risk management. Being an audit firm risk management is a critical daily task for everyone in the firm. Therefore I would assume I would have the access to the necessary information to at least get me started on the project. However my issue is that being an audit firm, risk management might be too broad and might find it difficult to focus on a specific area. As well, financial risk might be a bit complicated given the size of the firm. What i was think as well was to focus on one department only instead of the whole company, but then again financial risk might not be so straight forward (not that i am expecting the project to be straightforward).
(3) Topic 17 – the importance of corporate governance. Then again being one of the Big4 audit firms, CG is paramount in our company. However, the subject is not my strongest point, such as financial analysis of a company. Therefore I am not sure on how to structure and on howto focus the project. But I am confident that once i get started and do my research it should be fine.
Therefore any kind of input and opinion would be appreciated as I am almost completely lost.
@yanaborda – love the Topic 16 idea particularly (as a forensic accountant I would, wouldn’t I?) I will respond in greater detail in a day or two as I am a bit tied up at the moment. Try to think how you can do some original evaluation of the situation – not just restating what the firm does as that is the main issue with this topic
Topic 17 usually gets better grades than Topic 8 unless you do a really good evaluation with Topic 8 . In my opinion Topic 8 is only for those who have no other viable choice (oh dear! I am usually impartial but obviously my bias is coming through here 😀 So better stop now )
Thanks a lot for your input 🙂 To tell you the truth I am more inclined towards risk management as well, given I am an IT auditor so risk management is more of a strong point for me as well. So I can understand your bias 😀
Great! @yanaborda – we are singing from the same hymn sheet then! 😀 A challenging topic but probably one of the most interesting of the lot.
I realise that you are working in this specialist field and some of these notes are more generalised (as I try to address a wider audience e.g. students who may be interested in the topic, what to know more about it and don’t share your knowledgeable background), so please ignore the obvious but I hope it gives you some ideas and something to plan your work appropriately at this stage.
Most of your the introductory part of your RAP – (see Section 7 of the Info Pack as it gives some idea of these) will be fairly similar regardless of which topic you undertake (so I am not going to elaborate on this further)
However Information gathering and approach to analysis vary a little more depending on whether you use primary or secondary data or a combination of both. At this point – as mentioned previously – you need to consider how you intend to evaluate the financial and operational risk management as this will dictate both your research and your information gathering approach. The evaluation and analysis section is the most critical part of your whole RAP (in all senses of the word “critical”):
“In order to produce a successful RAP you have to evaluate and / or analyse
information from a range of sources. This means creating some meaning of what you
have found, or making a judgement or coming to a conclusion. If you only report the
information that you have found or generated, you will not pass the RAP. The ability
to evaluate and / or analyse information is a very important graduate attribute and the
grade that you are awarded for your RAP will be significantly influenced by ‘how well’
you demonstrate your evaluative and / or analytical skills in your RAP.”It is incredibly IMPORTANT that you use your information to evaluate and not just describe the situation as is. The words “creating some meaning of what you have found” is a small phrase but means a lot in terms of what grade your RAP will get and in fact whether it will pass at all.
You can use some basic quantitative analysis (emphasis on the word ‘basic’ – you are not doing a statistics degree!) for some topics and this may be one of them so that is a possibility perhaps although qualitative analysis is also acceptable provided it is supported by independent evidence (drawing parallels, citing cases that were common in some respects but had implications from which others should learn for example that sort of thing – all properly referenced – but referencing is a separate issues so I don’t want to digress too much here about it).
So your mission at this stage @yanaborda is how to answer the question “exactly how will I be able to evaluate the information I gather?” what can I do with the information I collect from my research? – because although you may certainly use the findings from others (all good research does by the way) you cannot just state someone else’s findings and leave it at that. So you are in the interesting situation where you will be assessing the reliability etc of the risk assessment process in your chosen organisation and critically reviewing it possibly by evaluating different points of view of others and / or by conducting some primary research.
I am still fairly tied up but think this is enough food for thought for now. I hope you will come back with a few ideas and I can then give you my thoughts on whether they sound viable. Sorting out this issue at this stage in outline will determine how you structure your research and the best planned RAPs that approach the evaluation with intelligent thought are the ones that pass with good grades 🙂
@yanaborda – while doing a reply to Alfred yesterday on the Topic 17 Forum it occurred to me that if you are struggling to come up with ways of doing an objective evaluation for Topic 16 that for you, given your particular background you like me, would possibly be interested in CG at banks (or rather apparent lack of it 🙁 !). While it would be great if you can do Topic 16, if you are having problems with it, you may like to consider doing Topic 17 in the context of one of the major ‘delinquent’ banks as a possible interesting alternative…. just a thought 🙂
It could be an interesting topic evaluating the CG at banks, however I am worried I won’t have enough information available since I don’t work at a bank.
I have given some more thought to Topic 17 based on the audit firm I work at. I thinking of evaluating the effectiveness of the risk management (by looking at the brand recognition in the market, any complaints with the authority, litigation, etc) and the efficiency of risk management (as in the cost of implementing and monitoring such controls, the impact on the audit fee, pressure on resource available, etc).
As for operational risk management I was thinking of going into the AML procedures, client & engagement acceptance and continuance, EQCR, partner reviews, independence checks, training provided to personnel, Letter of engagement, access controls to files, a bit of information security etc. I would like to determine the cost of having such controls in place weighted against the risk assessment and exposure.
Hopefully this will lead and open the financial risk part of the project as the financial cost of having external reviews, the impact on the audit fee, etc. Hopefully i would have access to some time recorded information and determine the time allocated on average towards the above mentioned areas (file reviews, acceptance forms), and how in turn these where invoiced to the client and the average fee recovery.
Furthermore, I was thinking perhaps assessing the effectiveness of the controls (and an additional financial risk) if the firm was subject to any legal claims, penalties, licence suspensions or warnings from the authority (indicating that the operational risk management is actually not that effective).So basically that is a quick overview of what I have in mind at the moment, hopefully more formal process and ideas will come to mind when I start collecting the information.
@yanaborda. That all sounds good. My fear with this and some of the other topics (including Topic 11 Auditing) is that students are great at describing what goes on but then don’t do sufficient (if any) analysis. OBU has stressed that the RAP is a Reasearch and ANALYSIS project so if you don’t analyse and evaluate you can’t pass as you haven’t fulfilled the requirements . So I just want students to recognise this upfront so that it doesn’t become a problem. However you have now addressed this. Analysing the costs or doing some sort of expected value of the potential losses less the costs of implementing procedures that plan for the risk will show you have covered this element. The only other thing that you need to do is for the assessment criteria 1 & 2 is to bring in a risk assessment model of some sort – a theoretical one that you can apply. I mentioned Risk Assessment Based Auditing techniques recently to a student who had failed Topic 11 so if you haven’t got anything in mind yet – take a look at that by using the search facility for Topic 11.
Thanks a lot for the reference it was a really helpful starting point for my research 🙂 the paper was really interesting and I also read some of the further readings mentioned in the paper you suggested in topic 11.
I was thinking of about trying to collect or discuss the risk management process at my company, so that once I have a more clear picture of the methodology used I would then be able to focus on assessing the methodology used. However I suspect that the risk management process used at our firm it will definitely be similar to RBIA.
@yanaborda Glad to hear the planning for the RAP is going really well.
Not a problem if the risk management assessment process is similar to RBIA. Just remember to reference all sources you use as referencing is (a) easier if you start doing it right at the beginning (apparently you set up microsoft Word to do this for you – so that makes life a lot easier!) and (b) if you do not reference fully you will fall foul of the information gathering and referencing criteria.
Keep the Topic 16 title in mind as you plan (as the markers do not take too kindly to modifications!) so make sure that the focus is on it and ensure as you go along that you will cover all aspects of the title and won’t just be discussing a general review of risk assessment (nag! nag! 🙂 ).
I always think it’s a good idea to consult the Assessment Criteria too (Appendix 1 of the Info Pack) from time to time. A quick look at the Fail column tells you in principle what you need to avoid and the A grade shows you what to aim for ideally. Just avoid veering too much towards describing and try to be as objective and critical as possible when doing your evaluation. You never know, you may actually come up with a few recommendations that you may be able to put forward to your organisation! 🙂
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Hi.I am planning to submit my RAP in May 2015 and I am thinking of doing either topic 16/19.however I am more inclined towards topic 16.the reason being access to primary information as I plan to base the research on the central bank in my country.Being a central bank I’m sure they manage a lot of financial and operational risk so I’m thinking I won’t run out of things to write about.was also thinking about a mining company back home.im confused really.the main reason I dropped topic 19 was lack of access to primary information.is it possible to do good a good RAP on that topic without primary information?please advice
@imaan – Primary data relates to conducting questionnaires, interviews and personal observation. Unless you work for the bank or the mining company you are unlikely to be able to have these opportunities and you will have to rely on secondary data. Secondary data is information that is already in the public domain: financial statements, reports, articles etc.
Please take at look at the FAQs on our home page http://www.opentuition.com/obu
where I discuss in brief some of the things you should consider when making your topic choice. For T16 and T19 to do this successfully you will probablyneed some inside information (i.e. primary data) so unless you have this yourself or contacts who can access it for you (with the company’s permission) then you are going to struggle with doing the relevant analysis.
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Thanks.i do have contacts in both organizations .however I am currently abroad where I plan to complete the RAP so that means I would have to put a lot of reliance on my contacts to get things done.for eg distributing and collecting questioneers.do you think this is a good idea or should I just choose another topic for which primary info is not critically important .
Another question I have about topic 16 is the evaluation bit.im I suppose to assess the organisation using risk management frameworks for example using coso/iso3100? Or should it be about how good they were at managing the risks they identified.should the evaluation be over a certain period of time if so how many years do you think is appropriate to do a proper evaluationThanks again 🙂
@imaan – These are tough questions for anyone to answer as the choice of topic and organisation has to be yours but as I have said frequently elsewhere on our forums, the best RAPs are produced by passionate students who are really interested in both the topic and company. As you will have gathered from this particular forum I think T16 is a great topic but make no mistake it will be challenging. If you are up for it – go for it. You could try it and if you don’t get all the relevant primary information you could cut your losses at that stage and perhaps (so that your efforts are not completely wasted) ‘switch horses’ and go for T17 as there will be some overlap in the information gathering. (I have tried to set out in quite a lot of detail on the T17 forum – the various elements to consider so take a look).
As for assessing risk the main consideration is that you have to “add some value” to your work – as I have tried to stress above – you must put in some of your own original analysis. Either of the approaches you suggest should be satisfactory if you remain objective and do some questioning and critiquing rather than meekly accepting the situation (point out the pros and cons if you can of what you find). If you have sufficient words you could even go for both approaches. As for the number of years – I would normally say at least 3 but with a bank it might be appropriate to look at the situation since the 2007/2008 banking crisis.
Hope that helps 😀
I have not yet decided any topic and i am nto sure that from where i should start writing my RAP for P32. I am thinking to select topic 16 about risk but i have no idea that what type of content i suppose to write in my RAP?
It is great to see that you want to start BSc Hons. RAP.
First action for RAP is to properly read BSc info pack: https://www.accaglobal.com/content/dam/ACCA_Global/Students/bsc/IP2015-16.pdf
Then you will have to select your topic, organisation and mentor. You can find mentors at:
https://www.oxfordbrookesmentoring.co.uk/.Once, you are done with this, have first meeting with mentor and start your RAP.
Please ensure you are eligible for BSc Hons. and also you complete professional ethics module by 31 March 2016 if you want to submit RAP in May 2016.
Regards,
Hammad Ahmed Qureshi – OBU Registered Mentor.Take a look at our existing posts for Topic 16.
Topic 16 is not a pushover and usually requires some inside knowledge of the organisation. Have a good read through to see what is required
[Alternatively you could do T17 but choose a company that has fallen down on CG (quite a few of those about if you read the Business Press!!)]
Analysis & Evaluation of financial & Operational Risk
of a company.Its my first Time to do the RAP and i would appreciate guidelines for Chapter 16.I have the topic because of availabilty of materialsI want to go with Topic 16 for period 32 but i am not sure that what type of content i supposed to collection, for example those people who are writing on topic 8 will go through to the financial statements of the organization and write down their analysis but what about topic 16? I want to know that what type of reports i supposed to go through to know about the risk management policy of the organization.
BTW selecting a public bank would be a great idea for topic 16 or not?
“A critical evaluation of the financial and operational risk management within an organisation”
The Topic and its Significance:
The topic focuses on the factor of “Risk”, further dividing it into two categories
1) Financial Risk
2) Operational RiskIn general terms, risk is any activity, when taken will lead to an undesirable outcome. Decision making is a vital process in any business and every decision has an element of risk. For example, if we agree on a merger with Company A, what affect will it have on our employees? There is a risk that the two different cultures don’t settle in and thus lead to key employees leaving.
Above is just risk in general. This topic specifically looks at financial risk and operational risk. It doesn’t look specifically at the risk but rather it requires you to evaluate how the organization manages that risk.
Financial risk is any risk that is caused due to financing activities. For example, if we invest in a company that has a high gearing, there is a financial risk that the invested company might eventually go bankrupt and thus we lose all our investment.
Operational risk looks at the internal activities of the organization. Unfortunately, operational risk can mean a lot of things and its not as specific as financial risk. It relates to the company operating and it can range from loss of data to breakdown of manufacturing machines.The above is an explanation of risk. Remember, the topic wants to know how the organization manages it so for example, how does the organization prevents itself from losing important data?
Regards,
Hammad Ahmed Qureshi – OBU Registered Mentor.I suggest that you read all the above posts to get a good overview of the subject.
I think a bank could be a good subject for this topic. As banking lay at the heart of the 2008 crisis you should research what the main causes of the crisis were and how regulators have attempted to prevent a re-occurrence of these. How has your bank specifically been affected?
I suggest that you research the Basel accords and specifically apply the CAMELS model Also consider other risks that the sector can be prone to in relation to your bank e.g. money laundering, rate fixing – what policies does your bank have to deal with these? In many jurisdictions it is now mandatory for companies (not just banks) to publish risk assessment reports. If there is one this should be examined and also the composition of the risk committee.
See the attached link for a document published by the Financial Action Task Force (FATF) that looks at the risks posed to banks by criminal activities. https://www.fatf-gafi.org/media/fatf/documents/reports/Risk-Based-Approach-Banking-Sector.pdf
Again in certain jurisdictions there are specific regulatory bodies (such as the Financial Conduct Authority in the UK) and you should visit their websites as you may be able to glean appropriate information from there that is relevant to your case study. An important area that you should look at is cyber-security at the bank and the risks attached to its IT system.
You could also look at how outside agencies rate your bank’s finances e.g Moody’s, Standard & Poor’s or Fitch.
Hay Boss, could we connect. My number is +23276450072 on whatsapp and Voice. reply and lets chat.
ThanksOur forums are intended to be a platform for everyone and to share ideas. If you have a particular query please post it on the appropriate forum thread and I shall reply to you there
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For the financial risk management which aspects would we need to consider, are they any models which could be considered if one is to take up this as a RAP .
As a pure theoretical outline of a diagramatical model take a look at the Risk Management House on p.5 of this
https://triplejump.eu/wp-content/uploads/2016/04/Case-Study-Leveraging-Risk-Management-for-Future-Growth-Published-Fi….pdfFor actual practical models read the following that will give you more background into the potential issues and resolutions:
https://www.theirm.org/media/1454276/IRM_Operational-Risks_Booklet_hi-res_web-2-.pdf
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thanks Gillian
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