The Rogue Trader

Topics: Barings Bank, Internal control, Management Pages: 4 (1489 words) Published: February 3, 2014
Have you ever told a lie? In most causes after telling one small lie another lie follows. After time passes and the lies began to seem like the truth, you dig yourself into a pool of lies which eventually contradicts your first lie. The same truth happens to Nick Lesson and his 8-8-8-8-8 account. It all started with 20,000 that turned in to millions that turned in to billions that lead to the collapse of Barings Bank.

Although Nick Lesson was to blame, the direct blame goes to the board of supervisors and management of Barings. According to the Committee of Sponsoring Organizations of the Tread way Commission internal control is defined as the procedure, introduced and put into action by the executives of a company, which is designed to make available reasonable assurance of the, competence and usefulness of operations; trustworthiness and dependability of fiscal reporting; conformity to concerned rules and regulations. The process of internal control comprises of five interconnected components. These components are Control Environment, Risk Assessment, Control Activities, Information and Communication and Monitoring. These make up for a highly competent framework for investigating and evaluating the system of internal control that is put to use in a business. In this report I will be examining Barings Banks collapse based on the movie “Rogue Trader” will comparing the banks structure to the COSO internal control framework. Control Environment

The first component, Control Environment, is the foundation for all the other internal control components. It is the tone setter of a company and influences the control awareness of the employees. It is sometimes referred to as “internal control environment.” Control Environment is expressed in many different forms such as management style, corporate culture values, philosophy and operating style, the organizational structure, and human resources policies and procedures. Barings Bank board members...
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