Organisations need to break out of the compliance cocoon and evolve into a fully fledged leadership role that delivers real value to the business. In the current economic climate, the biggest risk for most companies is not a failure to meet compliance requirements, but a failure to meet strategic targets.

The study also assessed last year’s top 10 business risks. In it, the analysts ranked the aftershocks of the credit crunch and the deepening global recession as the most important business risks, displacing regulation and compliance from the top spot.

Still more evidence that the Internal Audit profession demands an expanding skill set and well-rounded people with experience in more varied aspects of business. Auditors are going to have to continue to push themselves outside of their comfort zone in order to provide the greater value that shareholders require of the function.

How does your IA department stack up?

The research found a dramatic improvement in ethical behavior with just a few spritzes of citrus-scented Windex.

The researchers see implications for workplaces, retail stores and other organizations that have relied on traditional surveillance and security measures to enforce rules.

“Companies often employ heavy-handed interventions to regulate conduct, but they can be costly or oppressive,” said [Katie Liljenquist, assistant professor of organizational leadership at BYU’s Marriott School of Management], whose office smells quite average. “This is a very simple, unobtrusive way to promote ethical behavior.”

I wonder if the persistence of a citrus smell at a business would affect the assessment of audit risk for that business? Maybe a cost-effective way to justify reduced audit testing? I can see it now: “Well, the assessment says we test a sample of 25, but does anyone else smell lemons?”

The study is at this point still “soon to be published,” but the article at BYU’s website details the tests performed to support the conclusions.

The site is called NotchUp and allows employers to pay to interview job candidates who otherwise wouldn’t be looking for a new job.

Associated Press has the lowdown:

How it works: You plug in your industry, job, pay and experience into a calculator on the site to help you set your pay for an interview. (NotchUp recommends a range between $200 and $500.) Then you submit your profile to the site.

If a hiring company is interested in you, it deposits the money with NotchUp and talks to you. If you seem like a real, engaged candidate, NotchUp will transfer the money to your PayPal account once the interview is over.

Interesting twist on the usual way things are done, and potentially a great way for employers to snatch up quality candidates. No mention of course on whether accounting firms are using the service yet, but it’s probably only a matter of time.

The Rothstein Kass report, The Compensation Conundrum, makes clear that even for non-investment professionals, hedge funds pay better than both Wall Street and corporate America.

For instance, senior accountants at surveyed firms earned $71,000 median salary for 2007 and were expected to receive bonuses centering around 50 percent – adding up to total pay of $106,000. Total compensation ranged from $96,000 to $124,000, varying little with firm size.

Those are pretty impressive numbers. This is no doubt going to continue to create pressure on public accounting firms and companies trying to hang on to their professionals.

I don’t personally know anyone who has left public accounting to go to a hedge fund, but with salaries like those above, it won’t be too long before I do. Salary shouldn’t be the only reason one leaves public accounting, and indeed I don’t think it often is. There are certainly some for whom the almighty dollar is the sole reason to leave, but most go somewhere they believe offers a better long-term career opportunity, and possibly work-life balance improvement.

Work-life balance is one area where I don’t think hedge funds have an advantage, even over public accounting, which is notorious for the long hours and demoralizing “busy season”. At a hedge fund you still work for clients, as in public accounting, which is the main reason why things get as hectic as they do. My peers would be wise to keep that in mind when they consider the seemingly greener pastures of hedge funds.

The booming oil price is fuelling an accountancy recruitment crisis in Aberdeen as other firms struggle to match the salaries being paid by the cash-rich energy companies.

Multinationals such as BP, Shell and Schlumberger are taking advantage of the near-record price of a barrel to pay top dollar for professional services as the North Sea continues to thrive.

Here in Canada the tar sands in Alberta are driving incredible economic growth in that province, leading to a shortage of accounting professionals. It isn’t just accountants, of course, who are being wooed west — the region could use all kinds of labour.

It hasn’t come to the point where I’m receiving phone calls from recruiters with jobs in the oil patch, but I have a feeling those already out west are. I know there are plenty of opportunities within my firm to move west and help reinforce our offices in the province.

Ontario has been particular hard hit by the rising loonie, as it is Canada’s manufacturing heartland. Many businesses here depend on exports to the US, and these days their products are much more expensive than they used to be down south.

I have a feeling we’re just beginning to feel the effects of the rising price of oil combined with a weak US dollar, here in Canada and around the world.

I am not sure how effective this will be at increasing staff productivity – which is presumably the intended effect. To be consistent I guess they also need to ban personal telephone calls and emails during office hours. Personally I prefer to trust people.

That’s a breath of fresh air coming from someone in his position. I would expect the employees of Stoy Hayward appreciate being treated like responsible adults. From the comments, by “russell”:

Rather than banning things companies should look to understand what makes it such a powerful medium and explore opportunities to engage with employees through such social networking sites.

He’s on the mark with the sentiment, which some businesses have already taken to heart. Especially in the profession, where potential employees are already users, keen on new technology, especially when it helps them meet people and build relationships, and looking for something to differentiate between what are essentially different flavours of vanilla.

Banning any site sends existing employees the wrong message, and failing to leverage the social network will hinder the growth of the firm when it comes to attracting the top young minds entering the profession.

Over the past five years, the United States has been struggling with declining economic conditions, including crippling deficits, that have pummelled the greenback against a large number of major currencies. It did not help, either, that U.S. interest rates have been lower than most of the rest of the world, making the currency less appealing to investors who want yield.

All this results in weakened demand for Canadian exports, which puts a lot of pressure on Canadian manufacturers that depend on business with the US. The “declining economic conditions” mentioned above are also going to drive down demand from Americans for Canadian goods, so businesses here would do well to continue diversifying their customer base in other markets.

As for me, I’m going shopping in Buffalo.

At 37signals, a company with just eight employees whose Web-based collaboration software is used by thousands of small businesses, there isn’t time to sit around a conference room sipping latte and deconstructing memos. Come to think of it, there isn’t even a company conference room. There are just a couple of cubicles, loads of brainpower and three simple goals: make useful business software, make it easy to run, make money selling it. Repeat.

Fraud too pervasive to roll back SarbOx

In a new examination of 374 companies accused of securities fraud between 1997 and 2002, an average of seven people were implicated in each case… CEOs were implicated in nearly 90% of the cases examined. Next came CFOs, 78%. Then board directors, 40%; vice presidents, 36%; COOs, 20%; controllers, 19%; and general counsels, 7%. Big accounting firms were implicated in 18% of the cases.

The End of Independent Advice & Counsel

When a consultancy offers solutions, it has made its bed with a handful of technology or other vendors that will provide some portion of the service/product combination that will be sold to clients. When a consultant is truly independent and objective, they are solution independent and will help clients select the best solution for the client (not for the integrator).

PwC: Internal Auditors May Be Missing Risks

Between departments and across the enterprise, more parties have gotten involved in assessing risk and contributing to the company’s risk management process. That has led to some confusion and overlapping of responsibilities. One-third of the internal audit managers surveyed said their companies conduct multiple risk assessments across the organization, but the majority do not coordinate their work or results. The effect is inefficient and redundant presentations before audit committees.

Must I Play Golf To Get Ahead?

In a 2004 survey of 1,000 women golfers, 73% said that the game had helped them develop important business relationships, and over half said that being able to talk knowledgeably about golf had contributed to their success.

But it was Bloomberg’s that really impressed me, because he doesn’t technically have an office. He eschewed Giuliani’s former digs and instead filled a large room with low-walled cubicles and called it “the Bullpen”.

The enormous, newsroom-style office houses 50 of his senior staff and aides. “I’ve never understood why anyone would want to seal himself off from the rest of the organization. In the Bullpen, there are no walls, no gatekeepers, and no communication barriers,” explains Bloomberg.

This is the ideal situation in my opinion, and it’s like that at a lot of accounting firms. We even call our version of that room the bullpen as well, so I hope Bloomberg doesn’t consider the name original. The problem with my firm’s office is the walls around everyone’s desks are too high. You have to stand up to see the desk beside you.

Having an office like this is good because you see everyone more and although noise may occasionally be a problem, that can easily be overcome by having some actual offices available for individuals or groups to set up in to have a more secluded session. For general use, the bullpen is best.

What are other accounting firms’ setups like? Do we all have bullpens? Is this the best way to organize an office to enhance communication between colleagues, or does it just hinder productivity? Tell me in the comments!

(Via kottke.)

So it was with great interest that I read about the Indoor Playground, “a next generation co-working environment … for the entrepreneur who needs an office space on occasion as well as a community centre for collaboration.” They’re even using Ning for their web presence!

It sounds pretty cool. They have 14 smaller meeting rooms averaging 100 square feet, four larger shared meeting spaces, and a breakfast bar with shared room for working.

There’s an article in BusinessWeek.com about the phenomenon called co-working that features Indoor Playground:

One of the newest co-working facilities, for-profit Indoor Playground, opened in Toronto on Feb. 1 with a mission statement focused solely on supporting local entrepreneurial activity. The space’s hanging dividers and movable desks allow for reconfigurable work areas that can accommodate growing businesses as well as community events. Those events are planned by members themselves, both in person and through wikis.

I’ve toyed with the idea of setting up an accounting firm in a similar manner, with both private and shared working areas, but no assigned cubicles or desks. It’s not that far out, since work tends to come in somewhat “discrete units” in the accounting business. It would encourage employees to move around and enable more interaction amongst departments that wouldn’t normally be situated together.

Tell me in the comments what you think of the idea.

(Via Maple Leaf 2.0.)