Issue 26: The Risks of Bad Luck

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The Opening Bell

After making just one pass attempt, four-time MVP quarterback Aaron Rodgers tore his Achilles tendon in his New York debut on Monday.

Some pundits blamed the Jets' offensive line, others asked questions about the playing surface.

You can always prepare for the worst, putting steps in place to mitigate its effects. But there's one thing risk managers and the commentariat can agree on: there's always a risk that you'll be met with bad luck. .

With growing interest from regulators, the financial services industry is eager to find short-term talent.

In this week's edition of Top of Book, we speak with MBK Search CEO Spencer Knibbe, who explains why hiring interim GRC talent is more appealing than ever. Read more.

• The FDIC has outlined a series of steps it plans to take to provide regulatory relief and assist FDIC-supervised banks and their customers in Georgia recover from Hurricane Idalia. ?
• Should big US companies be forced to disclose their China exposure? Ex-SEC chair Jay Clayton proposes mandated risk reporting to inform investors and policymakers. But would this pilot program provide transparency or stir up litigation?
• The UK government has abruptly ordered schools with reinforced autoclaved aerated concrete to close over collapse fears. Insurers warn that rushed remediation could be costly and complicated. But can a proactive approach mitigate risks and ensure public safety in affected buildings?

To identify emerging risks, Richard Chambers recommends a collaborative PESTLE analysis assessing political, economic, social, technological, legal and environmental factors. But can anticipating challenges build organizational resilience in a time of "permacrisis"?

• Can crypto companies achieve compliance by paying refugees in digital assets? Anna Poliakova proposes what she calls a ‘win-win tactic’, arguing it could aid refugees while legitimizing cryptocurrencies. But does this legal loophole truly offer a pathway to regulation?
• Europol warns that lax compliance at online banks risks enabling money laundering. Virtual IBANs, tech support scams, and metaverse crime are emerging as powerful new threats. But can tighter regulations and asset seizure boost recovery and management, or will criminals stay a step ahead?
• The Biden administration has reportedly struck a deal to free 5 Americans jailed in Iran in exchange for 5 Iranians held in the US. The agreement also unfreezes $6 billion in Iranian assets. But will the controversial prisoner swap a poisoned chalice?

Shaping a strong corporate culture is an ongoing challenge, say Rich Kando, Sean Dowd, Robert Coffey, and Clark Perry. But real change starts from the top. Actions speak louder than words and CEOs must align business strategy with ethical behavior to foster an environment where employees choose to do the right thing.

• The IRS halted most enforcement during COVID-19, causing lingering impacts. Now field collections have resumed, but when will notices and campus enforcement restart?
• The PCAOB has proposed expanded auditing standards to identify corporate non-compliance risks, citing major impacts of legal violations. But if adopted, could these rules pull ESG matters into audit processes and costs?
• With limited external oversight, UK parish councils urgently need competent internal auditors to ensure accountability of public funds. Could ensuring transparency at the most local level be a satisfying second act for accountants?

PwC plans to restrict consulting for US audit clients, forfeiting millions in revenue to reduce conflicts. The voluntary move challenges rivals to follow suit amid global debates over ensuring accounting independence. But will other Big Four firms accept lower profits?

• Abbott's recall of 155,000 Proclaim neurostimulators was deemed Class I by the FDA after leaving some patients unable to restore therapy, with 73 injuries reported so far. Can Bluetooth precautions avoid additional surgery?
• An FDA panel unanimously agreed phenylephrine oral decongestants like Sudafed don't work. With $1.8B in sales at stake, could the FDA ban OTC use?
• Though promising, deploying digital health tools poses hurdles for life sciences companies, from data strategies to end-user adoption. By involving experts early and walking the user journey, can developers accelerate approval and ensure real-world implementation?

The FDA updated its biocompatibility guidance, clarifying ISO 10993-1 use in device reviews. With new recommendations on risk-based testing, nanomaterials, and intact skin contact, can manufacturers smoothly adopt the changes?

The Audit Podcast meets JT Erwin, Data Analytics Lead and?Internal Audit at?First Horizon, to detail the most significant outcomes stemming from the integration of analytics in the internal audit process.