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www.hanrickcurran.com.au
Risk Managementfor Professional Services
March 2017
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An introduction to the fundamental concept
Basics of Risk Management
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Source: Queensland State Archives, Customs House, c. October 1926
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Definitions for risk management are drawn from a number of different sources, but commonly are drawn from international standards.
Definitions for risk management
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Risk defined (Macquarie)
1. exposure to the chance of injury or loss; a hazard or dangerous chance
2. to expose to the chance of injury or loss, or hazard
Source: The Macquarie Dictionary
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International Standard
Risk is the effect of uncertainty on objectives
Source: ISO 31000:2009Source: ISO Guide 73:2009
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ISO Guide 73:2009
Definitions and vocabulary set out in the guide that accompanies the standards
Source: ISO 31000:2009Source: ISO Guide 73:2009
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Where risk standards are defined
Source: Standards Australia, www.standards.org.au
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Where risk standards are defined
Source: www.infostore.saiglobal.com and www.iso.org
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Risk Management Relationships
Source: ISO 31000:2009
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Risk Management Process
Identification
Analysis
Evaluation
Treatment
Monitoring
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Hanrick Curran’s journey into risk management commenced long ago but become more formal as the Firm responded to legislative and professional changes
The Risk Management Journey
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Audit partnership goes corporate
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APES 325
Preceded by ASQC1 about quality control for audit firms
Mandates risk management frameworks for accounting practices
Source: www.apesb.org.au
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CAANZ support
Source: Chartered Accountants Australian & New Zealand
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Establishing a Risk Management System (RMS).
Risk identification, assessment and mitigation.
Establishment of a RMS
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Place in the Firm
Source: Westpac Corporate Governance Statement
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Committee Membership
Practice manager
HR
Partners
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Meeting schedule
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
{}
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Primary purpose of the Committee
Ensuring clients get looked after
Protecting the partners investments
Monitoring
OversightAdvice
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Managing professionals
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David Maister“Are Law Firms manageable?”
Source: www.davidmaister.com
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How wrong can it go?
Source: ABC Learning Centres Ltd, 2007
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Establishing the risk register
Context
Identification
AssessmentResponse
Monitoring
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Risk categories
Business
Regulatory
Technology
HR
Governance
Stakeholders
Financial
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Risk Management Register
Source: Hanrick Curran Risk Register
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Risk management systems
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Professional Risk
Source: Hanrick Curran Risk Register
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International Standard
Risk is the effect of uncertainty on objectives
Source: ISO 31000:2009Source: ISO Guide 73:2009
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Professional Risk
Source: Hanrick Curran Risk Register
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Assessment criteria
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Professional Risk
Source: Hanrick Curran Risk Register
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Professional Risk
Source: Hanrick Curran Risk Register
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Professional Risk
Source: Hanrick Curran Risk Register
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Residual risk ratings
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Professional Risk
Source: Hanrick Curran Risk Register
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Risk response options
Source: Hanrick Curran Risk Register
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Professional Risk
Source: Hanrick Curran Risk Register
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Other risks
Data security
Office disasters / office damage
Social media fails
WHS issues
Failure of key clients / projects
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Benefits of risk management
Benefits Disadvantages
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When do you need to start this?
$2 million in revenue?
$5 million in revenue?
$10 million in revenue?
“Consider a phased approach to implementing a risk management system …
2 partners?
5 partners?
10 partners?
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Source: www.qls.com.au
What are the alternatives?
“Working on the practice, not in the practice …
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The process of establishing the ‘rules of engagement’ for clients, for setting expectations and agreeing what services we have been hired to provide.
Client Engagement
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Professional requirements
APES 110 Code of Ethics for Professional Accountants
APES 305 Terms of Engagement
ASA 210 Agreeing the Terms of Audit Engagements
Source: www.apesb.org.au and www.auasb.gov.au
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LPA requirements for client engagement
Source: Legal Profession Act 2007
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Client engagement
Source: “Karma Business” by Mike Keene and “The Trusted Advisor” by David Maister
Share
Refine
Propose
Deliver
Engage
Listen
Frame
Envision
Commitment
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Terms & Conditions
Source: Hanrick Curran standard terms and conditions (version 7, November 2016)
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Terms & Conditions
Source: Hanrick Curran standard terms and conditions (version 7, November 2016)
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Terms & Conditions
Source: Hanrick Curran standard terms and conditions (version 7, November 2016)
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Problems
Non-conformance
Client expectation
gap
Staff/Partner obstinacy
System complexity
Changing legal
requirements
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Some personal insights into a professional career, with some tips for survival.
Managing pressure & expectations
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Asset structuring
Of course …
“Who do you trust more, your partners or your wife?”
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The speed of email …
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Source: http://www.qls.com.au/For_the_profession/Love_Law_Live_Life
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Source: www.headsup.org.au
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Email notifications, set to off
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Kaizen
Source: David Allen & Stephen Covey
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Audit team reading list
Source: Hanrick Curran audit team reading list
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Summary …
Risk is dealing with uncertainty and its impact on objectives.
A risk management system can serve as a catalyst to formalising certain management systems.
You can start dealing with risk by simply putting the matter on the agenda for the next partners meeting.
The benefits of looking at, and thinking about, risk outweigh the loss of time involved.
It does make sense to document the issues that you are looking at.
Start by using some of the Law Society resources to identify areas for improvement.
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We welcome your questions regarding the contents of our presentation and the issues associated with risk management.
An opportunity for questions
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Matthew’s details
Source: LinkedIn
Matthew chairs the HC Risk Management Committee, with a focus on ensuring that HC is managing the risks attendant with the operations of the Firm.
Thank you
www.hanrickcurran.com.au
Hanrick Currant. (07) 3218 3900f. (07) 3218 3901e. enquiries@hanrickcurran.com.au
Level 11307 Queen StreetBrisbane Qld 4000
GPO Box 2268Brisbane Qld 4001
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Definitions from ISO 31000:2009
Resources
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
76experience. new thinking
Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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Source: ISO 31000:2009Source: ISO Guide 73:2009
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