I had a great conversation with the public relations manager at the Institute of Internal Auditors (IIA) the other day. As much as I have been involved in the past with this organization and as much as I have reached out in the past and offered to speak, write, teach, consult…
“…Mr. St. Denis said he resigned on Oct. 1, 2007, and that later that month, AIG’s chief auditor, Michael Roemer, asked him why and said he would report those reasons to AIG’s audit committee. Mr. St. Denis wrote that he told Mr. Roemer about Mr. Cassano’s comment. That would indicate that a key AIG executive last fall was aware of Mr. St. Denis’s concerns….”
From my very first post on the scandal in January 2008:
The Société Générale 2006 Annual Report devotes quite a few pages to the subjects of risk management and controls.
First, they discuss the elaborate internal control organizational structure and its interaction with the Audit Committee. Pages 89-95 describe the internal control organization and how the internal audit function carries out inspections.
On page 99, we see the report on internal controls prepared and signed by the dual auditors under French law who review Société Générale’s books and records and have provided a clean opinion, agreeing with management’s assessment of internal controls. There were no exceptions cited. Société Générale has the benefit of both Ernst and Young and Deloitte to assist them in making sure everything is in order and functioning to produce financial information that is valid, true and complete.
There’s an entire chapter, pages 127-150, of the annual report devoted to Risk Management. This section covers all the risks they face and the myriad of policies, procedures, organizations and systems they, theoretically, have in place to manage them.
So what happened?