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It is an exciting, but potentially stressful time of year. December is a fast and frantic month that may include the annual office bash and Christmas shutdown, and is a time when many people have fun; renewing their energy and optimism for the year ahead.
At Ash Shaw we are always thankful for the support we've received during the year and 2006 is no exception. We would particularly like to mention the following:
- the help we receive from our clients. For example, looking after our teams while we are on your premises and for working in partnership with us so we can meet your goals and targets;
- the feedback we receive from our friends of the firm. You give us so many useful ideas and take time and trouble to help us improve the resources we offer in our Trustees Toolkit. Our latest helpsheet, The Ash Shaw 20 Minute Auditor Healthcheck would not be as good as it is without the constructive comments from our trusted group of friends. Thank you!
- our newsletter contributors, whose input is so valuable to our readers;
- you, our readers, especially those who make contact with us or recommend our free monthly newsletter to others. We really value your feedback, suggestions and constructive criticism. If it's good let us know and we'll keep doing it. If we don't hear anything, then we are likely to try something different. If we hear you don't like something, then we will change that too. Here are a few examples of what we've done.
| You said |
Our response |
| "Inspire us" |
We introduced our quote of the month.
Our 30 Day Challenge (that's 30 days from the start of your audit to your auditors giving you clearance) is a benchmark we're proud of and it has helped clients produce their accounts up to 4 months earlier.
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| "Make us aware of things that are myths or just bad practice" |
We've introduced heard at focus groups to share some common myths and misconceptions.
Our Accounting Pitfalls highlight some common errors – and give you practical clues on ways to spot them in your Scheme.
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| "Your telephone answering service doesn't fit with your personal style" |
We agreed. In April, we moved to London. Our phones are now answered by Andrea (except when she's on holiday).
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Last but not least, we would like to thank our team and our suppliers for their help and inspiration over the last year. At the start of the year, we said that this would be our best year yet and, judging by your feedback, we've met our goal. We could not have done this without all of you so here's a huge thank you for your help and support. We wish you all a Merry Christmas and prosperous 2007!
Please note this is a condensed version of the 1300 article written for the investment community, which is available at www.complianceonline.co.uk The AAF 01/06 report is a useful means for pension administrators to demonstrate that they have had an independent review of the effectiveness of their internal controls.
A helping hand: the AAF 01/06
New reporting environment for service organisations holding financial data
The ICAEW has issued new internal control guidance for pension administrators, custodians, and investment managers – the AAF 01/06. It replaces FRAG 21 reports and is effective from 31 March 2007. It places third party service organisations which hold financial data under greater scrutiny.
The new guidance offers more potential value than previous reporting formats because it sets out minimum control objective criteria for directors and enables the reporting accountant to give a positively worded opinion on how fairly and suitably described are the control procedures set out by the directors and how they operated. Previously FRAG 21s only stated factual test results.
Under the new guidance the AAF 01/06:
- clarifies the expected responsibilities of directors and reporting accountants;
- sets out a minimum set of control objectives to be described, tested and reported on;
- gives detail on the control objectives for specific financial service activities namely custody, investment management, pension administration, property management, fund accounting and transfer agency;
- issues an opinion by reporting accountants as to the adequacy of the control description, design and operation of controls; and
- makes reports more consistent and easier to compare from one period to another and from one service organisation to another.
Directors of service organisations such as pension administrators are responsible for:
- stating their responsibility for internal controls;
- evaluating the effectiveness of their organisation’s control procedures;
- supporting their evaluation with sufficient documentation and evidence; and
- providing a written report of their control environment and the effectiveness of their control procedures for the period under examination.
Next steps It would be prudent for service organisations to make an assessment of their state of readiness for a potential AAF 01/06 review. Particular challenges may be the documentation of control design and operations and the collection of evidence throughout the period under examination.
Are you ready? For further information, you can read the full article. To speak to our expert on this topic, Andrew Riley, simply contact us on 020 7917 2987 or email Andrew Riley.
In no particular order, here are the best 10 tips.
- Induction trustee training is essential. It results in higher standards and more confident trustees.
- Highlight additional training needs by completing Law Debenture's self-assessment.
- Reviewing your advisers raises standards and can keep costs down.
- Good governance and risk management processes lead to better use of time, but do make sure that you manage your agenda and delegate some tasks to sub-committees.
- Trustees need to manage conflicts of interest.
- Many trustees have signed up for The Pensions Regulators Toolkit, have you?
- Trustee Knowledge and Understanding is not an option. Trustees like The Pensions Regulators' e-learning (it's free and accessible to all). Once you've completed all the modules, don't forget to print your certificate.
- Save time and money by extending the final accounting period so that you only need to produce one set of accounts. The maximum period for a set of accounts is eighteen months.
- Simple processes that take weeks should be automated. Why not speak to your advisers/consultants and see if there is scope for improvement?
- Look ahead and have a formal accounts preparation plan and then review your plan by obtaining feedback. At the end of the process, do get feedback. As the phrase goes, "What gets measured, gets done!"
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