Irline Financial Management: Internal Audit

The Chief Financial Officer wants to establish a separate Treasury Department reporting to the CFO, to manage the company s,
Foreign currency cash flows,
Foreign currency risk,
Interest rate risk,
Investment of surplus funds,
Negotiate loans, short -term and long term.

You are the manager of the company s Financial Internal Audit Department whose responsibilities include  to monitor and review the integrity of the company s systems and financial operations to ensure they minimize the possibility of loss through mismanagement or fraud .

The CFO has asked for your advice on how best to organize, regulate and manage the operations of the new department and what reports the department should issue and how frequently.

Write a report to the CFO with your recommendations.

Topics to be included:
(1) Establishing and approving objectives for Treasury.
(2) Methods of approving risk management strategies and methods, particularly for the use of derivatives. A good essay will identify the need to provide some form of education in treasury matters to senior managers.
(3) How Treasury operations will be monitored. The form, frequency, contents and timing of reports. A good essay will identify the different parties who should receive a report and differences in the content of the reports.
(4)The allocation of responsibilities and duties to introduce checks and balances must be discussed.

OPTIOANL Key Resources:
1) Smith T. Accounting for Growth
2) Hall J.C. Options, Futures and other derivatives
3) Gordon A. Risk Financing
4) Gorrod M. Risk Management Systems
5) Standard Audit textbook such as Spicer and Peglers Practical Auditing
6) Journals such as Journal of International Financial Management and Accounting.