PraxIS March/April 2002

Managing reality in Information Systems - strategies for success

Systems Modelling Ltd. http://www.sysmod.com

IN THIS ISSUE

Welcome

Euro features 

Review of the introduction of euro notes and coins
FEE Survey results
Survey:diffusion of coins through the euro area

Risk Management 

Allied Irish Banks: the Ludwig report
"Spreadsheet Roulette: The Hidden Corporate Gamble"

7 Web links in this newsletter

About this newsletter, Feedback, and Archives

Disclaimer

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WELCOME

This is a mid-month update because I will be on holidays on the last week of March and first week of April. The next issue should be out by mid-April 2002.   As a number of people asked for more euro coverage, this should fill a gap.

For those who asked for the free download of Andrew Hughes Hallett's 36-page PDF paper "Britain and the Euro: A Study in Reluctance", he would be glad to hear any comments. If anyone would like to see the paper, email HHPAPER (at) SYSMOD (dot) COM  with the word "REQUEST" in the subject line.

Patrick O'Beirne, Editor
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EURO FEATURES

Review of the introduction of euro notes and coins

http://europa.eu.int/comm/economy_finance/publications/euro_related/eurorelated_communication0302_en.htm 
Communication from the European Commission to the European Council.  (6 March 2002) (pdf files 140 Kb) 

The purpose of this communication is to review in detail the physical introduction of the euro and to summarise the findings of the Eurobarometer surveys into how the change of currency has been perceived by individuals and firms. The following points are examined in turn:

the actual introduction of notes and coins;
related matters (price stability, counterfeiting, production quality, security measures and conversion of coin-operated machines);
the reactions of individuals to euro notes and coins;
the changeover preparations made by SMEs.

FEE Survey results

http://www.ipf.co.uk/europe/signpostview.asp?theme=tbleurope&id=128 

22 February 2002 Initial results from report into business euro changeover Federation des Experts Comptables Europeens
The survey, which was conducted through the FEE web site, applied only to Eurozone companies and about 170 companies replied. The replies were received during the last half of January 2002. Whilst those companies who have completed the survey appear to be well prepared, the survey provides evidence that companies with whom they deal are not necessarily as well prepared.


Survey:diffusion of coins through the euro area 

A group of professors of mathematics at Polytechnic University of Madrid are interested in all kinds of diffusive phenomena (epidemics, migrations, popular rumors, etc). By January 1, 2002, the new euro coins have entered into circulation and thus a unique and irreproducible opportunity to study the diffusion of coins through the euro area with well controlled initial conditions has occurred.

They have brought about a net of collaborators in the twelve countries that have adopted the Euro. When any foreign coin arrives to heir hands, they are asked to submit the date, city and coin denomination through a web-based survey form http://matematicas.montes.upm.es/eurodif.html 

Additional details are available at this site. In exchange for this collaboration, you have free access to the data collected for research purposes. For any comments and/or suggestions, please send an electronic mail to Juan C. Nuño : jcsn (at) montes (dot) upm (dot) es (Universidad Politécnica Telephone: 34913367107 )

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RISK MANAGEMENT

With Enron and Allied Irish Banks in the news, this topic is getting a brush-down from people who have not looked at it since Y2K.  

http://www.onbusiness.ie/redir/business/2002/0314/aib.html  
AIB has dismissed six Allfirst employees following the announcement of the findings and recommendations of its internal report into the Allfirst trading scandal, which lost the bank $691m. You can download the report by visiting www.aib.ie and following the links from the "Press room":

AIB and Allfirst implement actions to address issues raised by fraudulent trading activities: Click here to download the Ludwig Report in PDF format

The control deficiencies included:
The failure of the back office to attempt to confirm bogus options with Asian counterparties
The failure of the middle and back offices to obtain foreign exchange rates from an independent source
Internal audit of treasury operations undertook no sample of Mr. Rusnak’s transactions to see if they had been properly confirmed.
Failures of Rusnak’s superiors to adequately supervise his activity
Inadequate responses to issues with Rusnak’s trading that were identified
No policy and procedures review

A clear lesson of this situation is that proprietary trading (and perhaps all trading) activities are an extremely high risk activity no matter how small the activity appears to those in the senior levels of a bank’s organization.

I recommend you download the report and consider how fraud can happen, and what it takes to prevent it. There are lessons for us all there.

Roy Davies' site gives a quick summary of the most significant recent scandals: 

http://www.ex.ac.uk/~RDavies/arian/scandals/classic.html 
Classic Financial Scandals BCCI, Barings, Daiwa, Sumitomo, Credit Lyonnais, Bre-X ... etc. John Rusnak and Allied Irish Banks Enron The Nigerian 419 Scam

"Spreadsheet Roulette: The Hidden Corporate Gamble" 

European Spreadsheet Risks Interest Group July 2002 - Call For Papers Thursday July 18th - Friday July 19th 2002, Business School. University of Wales Institute, Cardiff Lecture Theatre 4, Cyncoed Campus, Cyncoed Road Cardiff, CF23 6XD, Wales, UK. The programme will concentrate on:

· raising the profile of the risks associated with spreadsheet use 
· the management and reduction of the risks associated with spreadsheet use 
· spreadsheet development methods 
· audit tools and methods

For submission instructions, details of formatting, handling of illustrations please contact David Chadwick at D.R.Chadwick (at) greenwich (dot) ac (dot) uk.  EuSpRIG welcomes papers and management summaries from academics, accountants, IT professionals, auditors and interested business parties. For further information about EuSpRIG, including registration details, abstracts from previous symposia and ongoing research projects, please see http://www.eusprig.org 

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Copyright 2002 Systems Modelling Limited, http://www.sysmod.com . Reproduction allowed provided the newsletter is copied in its entirety and with this copyright notice.

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Patrick O'Beirne, Editor
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ABOUT THIS NEWSLETTER

"Praxis" means model or example, from the Greek verb "to do". The name is chosen to reflect our focus on practical solutions to IS problems, avoiding hype. If you like acronyms, think of it as "Patrick's reports and analysis across Information Systems".

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ARCHIVES

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DISCLAIMER

This newsletter is prepared in good faith and the information has been taken from observation and other sources believed to be reliable. Systems Modelling Ltd. (SML) does not represent expressly or by implication the accuracy, truthfulness or reliability of any information provided. It is a condition of use that users accept that SML has no liability for any errors, inaccuracies or omissions. The information is not intended to constitute legal or professional advice. You should consult a professional at Systems Modelling Ltd. directly for advice that is specifically tailored to your particular circumstances.

Copyright (c) SML 2002

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