Linking Operational IT Failures to IT Control Weaknesses

Operational IT failures have significant negative effects on firms but little is known about their origins. Building on accounting research linking adverse operational events to SOX-disclosed control weaknesses (CWs) over financial reporting, we study the origins of IT failures in relation to IT-CWs. We use a sample of 212 operational IT failures where the confidentiality, integrity or availability of data assets and functional IT assets (hardware, networks, etc.) has been compromised. We find that IT failures are linked to a relatively small set of IT-CWs, where each IT failure type is linked to distinctly different IT-CWs. Moreover, IT failures more harmful to the firm are found to be associated with IT-CWs that are more sever and difficult to remediate

Modelling and managing reliability growth during the engineering design process

[This is a keynote speech presented at the 2nd International Conference on Design Engineering and Science, discussing modelling and managing reliability growth during the engineering process.] Reliability is vital for safe and efficient operation of systems. Decisions about the configuration and selection of parts within a system, and the development activities to prove the chosen design, will influence the inherent reliability. Modelling provides a mechanism for explicating the relationship between the engineering activities and the statistical measures of reliability so that useful estimates of reliability can be obtained. Reliability modelling should be aligned to support the decisions taken during design and development. We examine why and how a reliability growth model can be structured, the type of data required and available to populate them, the selection of relevant summary measures, the process for updating estimates and feeding back into design to support planning decisions. The modelling process described is informed by our theoretical background in management science and our practical experience of working with UK industry

An overview on the development of internal control in public sector entities : evidence from Kosovo

Purpose: The development and implementation of Public Internal Financial Control (PIFC) in the management processes plays an important role in providing sound financial management, transparency, efficiency and effectiveness in the public sector entities. Design/Methodology/Approach: In this paper we have analysed the annual reports on the functioning of the PIFC system in the public sector of Kosovo for the 2014 – 2017 period. The analysis has been completed even more, based on the annual reports of National Audit Office, progress reports published by the European Commission, showing the progress achieved under the EU directives as well as the data from the monitoring reports of SIGMA (Support for Improvement in Governance and Management). Findings: The findings show that the implementation of rules and procedures for internal control in budget organizations lags behind the development of the overall framework. Practical Implications: Continuous improvements in the field of Public Internal Financial Control are important steps in the process of European integration, while Kosovo has made considerable efforts to develop the control environment and implement the PIFC principles, particularly by establishing the appropriate legal, and institutional framework to support the PIFC system. Originality/Value: PIFC development is a continuous process and is part of the public administration reform, hence this paper contributes in identifying possible gaps and weaknesses in the system of internal control in Kosovo and provides recommendations for their improvement.peer-reviewe

Banks, knowledge and crisis: a case of knowledge and learning failure

Purpose – Regulators such as Turner have identified excessive securitization, high leverage, extensive market trading and a bonus culture, as being major factors in bringing about the bank centred financial crisis of 2007-2009. Whilst it is inevitable that banks adopt procyclical business strategies, not all banks took excessive risks and subsequently had to be rescued by taxpayers. The paper examines the extent to which individual bank outcomes can be attributed to systematic differences in banking knowledge concerning the primary risks and value drivers of their organisations by bank board directors and top management. Design/methodology/approach – The paper reviews a wide range of theoretical, historical and empirical literatures on banking models and detailed case analyses of failing and non-failing banks. A framework for understanding the role and application of knowledge in banking is developed which suggests how banks, despite their pro-cyclical business strategies, are able to institutionalise learning and actively create new knowledge through time to improve bank organisation, intermediation and risk management. Findings – The paper finds that a lack of basic knowledge of banking risks and value drivers by the boards and senior managers of the failing banks were implicated in the banking crisis. These knowledge problems concerned banks' understanding of their organisation, intermediation and risk management in an active market setting characterised by rapid economic and organisational change. Thus, the failing banks ignored or were unaware of this knowledge and hence experienced acute difficulties with learning the new knowledge needed to address the new problems thrown-up by the financial crisis. Practical implications – The analysis suggests that addressing this knowledge gap via the institutionalisation of banking knowledge ought to constitute an important element of any sustainable solution to the problems currently being experienced by the banking sector. By ensuring greater bank learning, knowledge creation, and knowledge use, governments and regulators could help reduce individual bank risk and the likelihood of future crisis. Originality/value – In contrast to the claims made by some politicians and banking insiders, the analysis indicates that the banking crisis and its severity were neither unpredictable nor unavoidable since some banks, by institutionalising banking knowledge and history of past crises, successfully avoided the pitfalls experienced by the failing banks

Warranty Data Analysis: A Review

Warranty claims and supplementary data contain useful information about product quality and reliability. Analysing such data can therefore be of benefit to manufacturers in identifying early warnings of abnormalities in their products, providing useful information about failure modes to aid design modification, estimating product reliability for deciding on warranty policy and forecasting future warranty claims needed for preparing fiscal plans. In the last two decades, considerable research has been conducted in warranty data analysis (WDA) from several different perspectives. This article attempts to summarise and review the research and developments in WDA with emphasis on models, methods and applications. It concludes with a brief discussion on current practices and possible future trends in WDA

Risk Management by the Basel Committee: Evaluating Progress made from the 1988 Basel Accord to Recent Developments

This paper traces developments from the inception of the 1988 Basel Accord to its present form (Basel II). In highlighting the flaws of the 1988 Accord, an evaluation is made of the Basel Committee’s efforts to address such weaknesses through Basel II. Whilst considerable progress has been achieved, the paper concludes on the basis of the principal aim of these Accords, that more work is still required particularly in relation to hedge funds, liquidity risks, and those risks attributed to non bank financial institutions. Further, the paper highlights existing problems with Basel II through a reference to capital measurement problems which were revealed in the aftermath of the Northern Rock crisis

Improving irrigation project planning and implementation processes in Sub-Saharan Africa: Diagnosis and recommendations

Irrigation programs / Planning / Financing / Financial institutions / Irrigation management / Operations / Maintenance / Privatization / Cost recovery