How can we use modelling?

Challenging preventative controls

Events only occur when preventative controls fail. Preventative controls are those controls that are intended to stop an event from happening. A count of the number of events will therefore give a good indication of the quality of a firm’s preventative controls. This of course assumes that all events are reported to a central capture area, commonly the risk management department. In order to ensure that all events are reported, many firms reconcile on a monthly basis the value of events that has been written off in the General Ledger to the value of events that has been reported to risk management. This allows management to be confident that all events have been captured.

Table 10.2 ...

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