Implementing Enterprise Risk Management: Case Studies and Best Practices

CHAPTER 26 Bim Consultants Inc.

JOHN R.S. FRASER

Senior Vice President, Internal Audit, and former Chief Risk Officer, Hydro One Networks Inc.

Bim Consultants Inc. is a medium-sized consulting firm. It is a corporation with 30 partners who own most of the shares. It has 10 offices across Canada with 3,000 staff, and has been in business for 30 years. Senior staff also own shares and participate in an annual bonus scheme. Salaries are generally on the low side, but bonuses in good years can be quite high. The balance sheet is sound (see Exhibit 26.1).

Bim Consultants Inc.
Summary Balance Sheet
As of December 31, 2014
2014	2013
Year ended December 31 (Canadian dollars in millions)	$	$
Current Assets
Cash and Short-Term Investments	12	7
Accounts Receivable	175	168
187	175
Current Liabilities
Accounts Payable	34	27
Short-Term Loans	100	110
134	137
Working Capital	53	38
Fixed Assets
Leasehold Improvements	196	178
Furniture and Equipment	100	94
Less Accumulated Depreciation & Amortization	(153)	(128)
143	144
Net Assets	196	181
Share Capital
Common Shares	100	100
Retained Earnings	96	81
196	181

Exhibit 26.1 Bim Consultants Balance Sheet

The company has always prided itself on its customer focus. “Customers are number one” has been the mantra from the chairman, Mr. Smooth, for many years. Recently, however, revenue has been stagnant, and the younger partners are getting restless, wondering if the older partners have ...