Accounting Case: Baring Bank
3. Internal Audit of operations: If the managers of Baring bank would have instituted internal audit of operations then they would have been able to uncover Leeson teeming and lading acts, Fraudulent cover up and grave misjudgment made while undertaking his duties.However this was not in place and their isn’t evidence of any manager who undertook to review Leesons work as they viewed Leeson to be independent.
4. Background Review: Due to the fact that the management of Baring Bank had created a wrong impression of Leeson they failed to investigate him even to the claims of the 88888 account letting the culprit handle the case and do a report to them. This was wrong and led to Leeson falsifying documents to cover up his tracks.
5. Limits to …show more content…
Duties and responsibilities: Baring Bank had not issued specific job descriptions to its staff and this greatly affected the staff perfomance as they was uncertainity in what the firm expected them to do. If duties were properly spelled out Baring bank employees would have been able to question Leeson on the roles that were out of his job description and help the firm mitigate risk of loss.
10. Accounting role: Bank reconciliation is an accounting role. Baring Bank failed to hire an accountant to man bank reconciliation and check the bank balances. By giving this power to Leeson, he was able to carry out fraud and falsification of documents without the knowledge of accounting department.
Information communication and Reporting:
1. Timely communication: Baring bank did not have a plan of timely communication. Delay in respond to important issues led to the company suffering from mistakes that would have been completely addressed. The internal audit department had made recommendations to the management on risks posing to Bank but the were not timely worked out (“Lessons Arising”, 14.31).
2. Effective communication and Mitigation: The bank had an internal audit department that conducted operations of the banking and securities market separately. If the two departments had communicated both their findings the weaknesses would have been effectively acted upon and risk avoided.
4. Background Review: Due to the fact that the management of Baring Bank had created a wrong impression of Leeson they failed to investigate him even to the claims of the 88888 account letting the culprit handle the case and do a report to them. This was wrong and led to Leeson falsifying documents to cover up his tracks.
5. Limits to …show more content…
Duties and responsibilities: Baring Bank had not issued specific job descriptions to its staff and this greatly affected the staff perfomance as they was uncertainity in what the firm expected them to do. If duties were properly spelled out Baring bank employees would have been able to question Leeson on the roles that were out of his job description and help the firm mitigate risk of loss.
10. Accounting role: Bank reconciliation is an accounting role. Baring Bank failed to hire an accountant to man bank reconciliation and check the bank balances. By giving this power to Leeson, he was able to carry out fraud and falsification of documents without the knowledge of accounting department.
Information communication and Reporting:
1. Timely communication: Baring bank did not have a plan of timely communication. Delay in respond to important issues led to the company suffering from mistakes that would have been completely addressed. The internal audit department had made recommendations to the management on risks posing to Bank but the were not timely worked out (“Lessons Arising”, 14.31).
2. Effective communication and Mitigation: The bank had an internal audit department that conducted operations of the banking and securities market separately. If the two departments had communicated both their findings the weaknesses would have been effectively acted upon and risk avoided.