Learning outcomes

Students must be able to assess an internal audit function as well as the internal control system within an organization. They should be capable of independently and autonomously analyzing and evaluating sensitive situations that may arise in an operational and strategic context. Risk management is the key element.

Goals

-Introduce the stakeholders of Governance, Risk Management, Control and Internal Audit: the Board of Directors, the actual Management, the shareholders, the management and the functions of Internal Control, Internal Audit, Compliance, Risk Management and Fraud

-Present the principles of governance and describe the role of the 3 lines of defence in the governance process

-Understand the concept of risk and the stages of risk management and identify the key business processes of an organisation

-Identify the objectives, components and principles of the COSO internal control framework and present the main types and techniques of control

-Describe the fundamentals of internal auditing

-Explain the missions, areas of activity and principles of the Compliance function as well as the key elements of an AML/CFT system

-Present the fraud triangle and the principles of fraud risk management

-Get students to think about the organisation, its stakeholders (internal and external) and perspectives

-To enable students to apply, in a critical way, the concepts and tools seen in the course

Content

Internal control is the activity within a company that serves management by ensuring the control of operations through appropriate risk (and opportunity) management.

This activity concerns the organizational structure as well as the selection and implementation of methods and procedures aimed at ensuring effective risk management, sound governance conditions, asset protection, and the reliability of information.

After a general overview of the key governance stakeholders, the course will focus on presenting the principles outlined in the COSO framework.

The key element of the approach lies in risk analysis and effective risk management by operational management. An evaluation of the organization’s functioning, based on a risk management analysis conducted by the internal auditor, is also important.

By the end of the course, students should be able to understand the ins and outs of the COSO model and be able to illustrate it with examples.

In addition, they should be able to identify the various stakeholders involved and understand the interconnections between them.

Table of contents

After outlining the structure of a company where ownership and management functions are separated, various stakeholders are identified as playing a role in risk management and internal control. Based on the Belgian Code of Companies and Associations, as well as other relevant Belgian and European legal, regulatory, or normative texts, the interactions between these stakeholders will be analyzed to understand the role each one plays.

The second part of the course focuses on examining the COSO framework from different perspectives:

·       COSO 1992

·       COSO ERM 2004

·       COSO 2013

·       COSO ERM 2017

·       COSO and its application in SMEs

The impact of sustainability on internal control and risk management

Teaching methods

Presentations (with expected interaction) including practical illustrations.

The syllabus is divided into two parts, corresponding to the two sections of the course.


Presentation of the main characteristics of risk management and the implementation/monitoring of internal control procedures, by juxtaposing:

·       A theoretical overview of the principles prescribed by the COSO model;

·       The application of these principles through examples (case studies that participants will be asked to prepare in advance of the sessions);

·       The identification of key stakeholders involved in risk management and the implementation/monitoring of internal control procedures.

A specific focus will be placed on the role played by the audit committee (or supervisory committee).

Assessment method

Oral exam under closed-book conditions

Students will have 20 minutes of preparation, followed by a 20-minute oral examination.

The oral exam is worth 14 points.

A written assignment must also be submitted before the end of the course and is worth 6 points.

Sources, references and any support material

BERTRAND N. and DE RONGE Y. (2013), Contrôle de gestion: perspectives stratégiques et managériales, 2nd edition Pearson, Montreuil CORDEL F. (2016), Gestion des risques et contrôle interne - de la conformité à l'analyse décisionnelle, 2nd edition, Vuibert, Paris CORPORATE GOVERNANCE COMMISSION (2009), The Belgian Corporate Governance Code 2009, www.corporategovernancecommittee.be IGALENS J. and POINT S. (2009), Vers une nouvelle gouvernance des entreprises, Dunod, Paris PIGE B. (2009), Audit et contrôle interne, 3rd edition, EMS, Paris PLOIX H. (2006), Corporate governance for all, managers, directors and investors, Pearson Education France, Paris RENARD J. (2002), Théorie et pratique de l'audit interne, 4th edition, Editions d'Organisation, Paris REDING K.F & al (2015), Internal audit manual - improving the effectiveness of governance, internal control and risk management, 3rd edition, Eyrolles, Paris

Language of instruction

French