November. 2008

                                                           http://www.china-investigation.com

Recently, Steele has conducted adjustments to SBCS and GJGW, the two websites the company holds, which will complete the introduction on the risk management services of Steele and facilitate the viewers.

Semi Annual Conference of CALI (California Association of Licensed Investigators) will be held on November 6-7, 2008 in Long Beach , CA.

PRMIA is pleased to announce that the Associate PRM exam donated by David R. Koenig, former Chair of the PRMIA Board of Directors and former PRMIA Executive Director, is now available to be taken in nearly 4,000 testing centers in 140 countries around the world in the period from September 16 – December 31, 2008. The participation is available at the agent for the exam in China.

2008 Pacific Rim Fraud Conference of ACFE (Association of Certified Fraud Examiners) will be held on November 16, 2008 in Melbourne , Australia. 

The database of Bribery Files Sharing has been set since October 16, 2008 in East China (including Shanghai and six provinces Jiangsu , Zhejiang , Shandong , Anhui , Fujian and Jiangxi ). Bribery records of East China are available by inquiring relevant files at any place within the region.

Supervision Bureau of Public Information & Network Security, the Ministry of Public Security announced on October 20, 2008 that the occurrence of information & network security events fell down a little in this year after three yeas of rising. The occurrence of information network security events is 62.7%, which has dropped for 3% and the occurrence of computer virus infection is 85.5%, which has dropped for 6%.

The 10th Forum on Practice of Civil & Commercial Law of China—2008 Annual Conference of Civil Committee of China Bar Association will be held on November 14-16, 2008 in Shanghai discussing on the topic of “Profession and Service Innovation”.

 Martin S. Pinales, Former Chairman of National Association of Criminal Defense Lawyers (NACDL) and Vice President of Lawyer Aid Board of NACDL, as the leader of Delegacy of National Criminal Defense Lawyers, paid a visit to Beijing Bar Association together with his group of 14 members. The two parties exchanged their opinions on criminal trails, rights notification and silence retention of criminal suspects, procedure of criminal suing and expert evidence etc.  

How to Build Risk Controlling System for Commercial Bank

From China Economic Times

Reviewing the running and developing of commercial banks of China , the risks perform in the following aspects: credit risk, liquidity risk, financial risk, marketing risk, internal operation risk, and rate risk, exchange rate risk, high liability risk, credit card risk and financial fraud risk existed as well. They will be actualized easily if they are not well handled. Controlling the risk at a lower level is an urgent demand for the developing of commercial banks in China . The practice of modern commercial banks indicated that the risk controlling and development of commercial banks has an intimate relationship, which includes:

1. Establish risk controlling framework of complete and vertical. There can be a risk controlling committee set at the head office of the bank, appointing the chief risk controlling officer at the head office as the chairman of the committee. Risk controlling officers shall be at every operation department and every branch, responsible not to the operation department of the same level but to the head of the risk controlling officer.

2. Stable the independence of risk controlling. It is not only response to independence of risk controlling from marketing, but also response to procedure controlling, internal audit and legal management. Head to procedure controlling, it includes adoption of proper audit policy, certainty of proper proportion for bad debt reserve, internal and external reports. Head to internal audit, it includes establishment of controlling and managing policies, testing of controlling procedure categoricalness and confirmation of the matching of internal operation and external supervision. Head to legal management, it requires that the action of the bank shall obey the laws, be connect with supervision department, offer contracts documents for operation activities, and caution of default risks.

3. Form corresponding risk controlling parameters system. The realization of risk controlling depends on the scientific risk control parameters system, which includes various parameters such as the safety, fluidity and profitability of assets of the bank. And corresponding alarms signals shall be provided to strict control and eliminate the risks.

4. Establish and complete the rules and regulations of risk controlling, close checking on various risks. Establish an efficient risk controlling system step by step, which includes the completion of asset liability managing system aiming in the integrated risk controlling; warrant and credit extension, separation of audit and loan, duty performance and responsibility restriction bearing local risk controlling; risk managing policy coring on risk controlling and evaluation; guarantee the transformation of the risks. Regarding the evaluation of increment and stock of the loan, it shall firstly adhere to the rules of first person liable. When dealing with the stock, not only the fluidity rate of the loan shall be closely watched, but also the risk of about to be or already been shall be clearly obligated. Through the completed rules and regulations, it allows the operation departments be restricted, supervised mutually to each other. Give the operation department the authority it deserved, and avoid the centralized power to one specific department.

5. Establish proper reward and punishment policy for risk controls. The main parameter assessing the performance of a risk controlling manager is the quality of the assets. The quality of the assets is integrated by separated operations on single asset. Accordingly, the condition of the total assets quality and the single asset quality shall be recorded in details. The bank shall pay certain rewards to those risk controlling officers who performs the risk control strictly and accurately. If the active negligence is found in the process of loan operation by audit and investigation, the staff of the marketing or the risk controlling officer will be punished respectively regarding to the seriousness of the case.   

6. Establish special risk culture. Consider the risk control as a culture and a spirit in the financial business. The corporate culture what we considered is the thought and soul rules the action of an enterprise. And risk culture is an important contain of a mature commercial bank culture, which is survive suffers risk. While engaging various operations of the bank, every person, every position and every department bear risk and risk dealing. It is demanded that every staff considers the risk consciousness as a concept, a self-knowledge and principle and treats it as an anchor of work. So, for a better living, you shall be positively affront of the threat and disarm it.

Introduction to the Sarbanes-Oxley Act

In 2002, due to the continuous financial frauds such as Enron nightmare and WorldCom event and the severe damage the frauds coursed to the world investment market, the capitol hill set out Public Company Accounting and Investor Protection Act of 2002, which was also called the Sarbanes- Oxley Act aiming strength the company operating and recovery the credit of the investors. The Act comprehended the rules of listing company sustaining internal controls, and demands the governor confirm and the accountant witness the efficiency of the actions. 

The Sarbanes- Oxley Act contains 11 sections, ranking Public Company Accounting Oversight Board, Auditor Independence, Corporate Responsibility, Enhanced Financial Disclosures, Analyst Conflicts of Interest, Commission Resources and Authority, Studies and Reports, Corporate and Criminal Fraud Accountability, White Collar Crime Penalty Enhancement, Corporate Tax Returns and Corporate Fraud Accountability.

According to the rules, the Act will be effective on August 29, 2005 to the America local companies and on July 15, 2006 to overseas company and small-middle sized America companies. After the Sarbanes- Oxley Act was set out, France and Japan all announced similar acts to enhance the supervision. China also increases relevant regulations.

At certain level, to the demand of Sarbanes- Oxley Act, domestic companies has to put the establishment of internal controlling system on schedule, the discuss from internal controlling to risk management is rising up domestically. Prospectively, the set out of Sarbanes- Oxley Act declares that the establishment and completion of internal controlling system and risk management system are the trends of scientific operation and secure management for an enterprise.

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