The Accountant-May-June 2017

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Finance and Investment Wherever, you find yourself, it is never too late, and like they say, there is always room for improvement. Whatever your level of current income, ensure you spend wisely (budget), Save regularly and invest smart establishment of clear guidelines on how we source for income and how we spend it. This is what we call budgeting. Budgeting It has been said that he who fails to plan, plans to fail. This is true in financial management. A story is told of a young couple that won a lottery. The excitement was great and as it happens with majority of people, spending begun without much thinking. Foremost in the list of things acquired was a car, followed by a holiday in another country for several weeks; in other words the couple was on a spending spree. After all, money was there in plenty. A few months down the line the now ex millionaires were back to the life they led before the windfall. All the furniture, car and other items they had bought were eventually sold to fund their living expenses. It does not have to be a windfall; even employment income, business income etc need discipline in spending. A budget is a tool that ensures discipline in spending. It is based on the notion that resources are scarce and therefore need to be prioritized. It is said, Rome was not built in a day. Equally a person or a business cannot do all possible things at once. If we budget well and in addition the budget is strictly followed, we will be able to release some funds towards savings. Savings Savings is a very good concept both in personal and corporate financial management. Loosely, savings may be described as keeping or putting some funds away for a rainy day. From the above discussed business life cycle, we realize that at some point the need for spare cash is inevitable. The money put aside during good times will come in handy during difficult times. It will help the business in its expansion endeavors. The same money can be invested to generate more income for the individual or the firm. It therefore becomes important even as we think consumption, we must think savings. If, the two men alluded to earlier on had kept some savings away, may be they would have lived longer. If the couple had kept some cash away and gone further to invest, they probably would still be millionaires. A story is told of the Kitengela BodaBoda operators who are proud home owners. This was possible through savings. Putting away ksh 100 per day, in the long run enabled them to acquire land and eventually construct their own homes. This goes a long way to prove that nothing is impossible and where there is a will there will always be a way. Our present sacrifices will yield much more tomorrow, if only we remain focused. Remaining focused means we have a plan in place and we are consistent in what we are doing. A great discipline is called for when it comes to savings. Investment When we talk of investment, one does not need millions of shillings to invest. Investment is a very broad term. In its simplest it entails anything that one does now for a promised return. When one starts buying and selling Sukuma wiki in the local market, he or she has invested in that business. He is expecting a return out of the operations. On a higher level when a business man buys millions of shares in a listed company, he is investing. A return is expected at the end of the day. We have as many investment opportunities as our imagination can fathom. Some investment opportunities will call for specialized knowledge while others are straight forward. When one is investing two things must guide him or her. These two things are risk and return. Expected return is influenced by risk. There d are different levels of risk and levels of risk appetite. Level of risk a. High risk b. Moderate risk c. Low risk Risk appetite d. Risk taker e. Risk indifferent f. Risk averse Appeal to artists in the creative industry To invest smart is to take calculated risks. However if one remains too conservative as pertains to risk, he or she will have minimal returns. In other words the greater the risk, the higher the expected returns. Therefore, any investment opportunity must be understood in terms of its expected return and the inherent risk. Are you an artist, in the creative industry? Maybe your career is at its peak? Are you suffering from the consumption disease that is inherent in the industry? Or are you among the smart few who have innovated beyond their core business? Wherever, you find yourself, it is never too late, and like they say, there is always room for improvement. Whatever your level of current income, ensure you spend wisely (budget), Save regularly and invest smart. The difference between you, who today is flying and the underdog in the industry is: d. Your spending (budgeting) e. Your savings f. Your investments If you are earning your income from singing, performing etc, nothing prevents you from investing in other areas to grow your income. Diversification is the term we use to refer to spreading your risk. It is looking beyond your initial income stream. Creating several income streams is imperative. Personal development is another key aspect. You need to be the best in the industry. Invest in yourself. Acquire more skills relevant in the industry, this will set you apart from the rest. Complacency, breeds dormancy and eventual death. Innovate, innovate and again I say innovate. 24 MAY - JUNE 2017
Information Technology DATA GOVERNANCE 101 Employees should know how to handle sensitive data By Albert Otieno, aotieno@co-opbank.co.ke Companies need to take a hard look at their data protection practices and consider altering existing strategies or replacing them altogether to prevent future breaches. These efforts are embedded in an organization’s data governance systems and procedures. Data governance includes but is not limited to: • In-depth system and network security audits must be conducted periodically to ensure that only authorized items are running on the company’s systems and network. Such audits can be done by internal system auditors with surprise system audits from external system auditors. This also detects any anomaly in the system that may cause system malfunctions. • Organizations need to develop an authentication and authorization policy that leverages best practices and historical information to help determine which users, processes, and applications have access to sensitive information. This also involves reviewing system rights of users every now and again; For example, reviewing rights of users who were in an acting capacity when the incumbent resumes duty. Also locking users who proceed on leave and sending to IT department list of employees on their last day of work for deletion in the system. • Employees need to be trained on how to securely manage sensitive data, and receive regular updates as new policies or solutions are put in place. Also frequent reminder of employees on dangers of sharing login passwords, leaving their machines unattended helps a big deal. Sharing stories of who became victims of fraud due to sharing passwords instills fear in employees and ensures they avoid such vices. • A third-party corporate breach and data security expert should be hired to analyze the level of risk and exposure. This could involve hiring ethical hackers to try get through the company firewall and access data. It also includes onsite and offsite data backup to ensure information is securely stored. • Implementing a data privacy solution can be done at multiple points within the enterprise. Choosing the point of implementation dictates the work ahead and significantly affects the overall security model. Encryption modes include network-level, application-level, databaselevel, and storage-level. For example, to avoid third party accessing calls in teleconference, the organization can be sending encryption codes to the people required in the call as a login measure. • When considering a data privacy solution, there are clear choices regarding the modes of implementation. Data security technologies include encryption solutions, access controls, authentication policy management and access, data integrity technologies, data loss prevention strategies and technologies, as well as the traditional endpoint security solutions. Companies should embrace biometric login credentials as they cannot be shared. The above basic data governance strategies can go a long way to help and organization in its data integrity and prevent fraud and or hackers or system invasions. Organizations need to develop an authentication and authorization policy that leverages best practices and historical information to help determine which users, processes, and applications have access to sensitive information MAY - JUNE 2017 25
Page 1 and 2: JOURNAL OF THE INSTITUTE OF CERTIFI
Page 3 and 4: TABLE OF CONTENTS 26 COVER STORY Wi
Page 5 and 6: EDITORIAL Dear Reader, The matter o
Page 7 and 8: Financial reporting and assurance T
Page 9 and 10: Financial reporting and assurance T
Page 11 and 12: Business Practice and Development I
Page 14 and 15: Business practice and development O
Page 16 and 17: Economy THE IMPACT OF HYPERINFLATIO
Page 18 and 19: Management THE POWER OF PERSUASION
Page 20 and 21: MANAGEMENT UNDERSTANDING THE RISK M
Page 22: MANAGEMENT Gor Mahia fans engaging
Page 25: Finance and Investment will also ne
Page 29 and 30: COVER STORY Daniel Susskind, a lect
Page 31 and 32: CPA Centre TO LET Structure • Ele
Page 33 and 34: governance the generation of a plan
Page 35 and 36: Public Policy Auditor General Edwar
Page 37 and 38: Public Policy and ensure government
Page 39 and 40: WORK PLACE If you are in the catego
Page 41 and 42: WORK PLACE Wherever, you find yours
Page 43 and 44: WORK PLACE Does this thought ever c
Page 45 and 46: WORKPLACE working remotely and bein
Page 47 and 48: WORK PLACE Being self-employed mean
Page 49 and 50: INSPIRATION don’t always come tru
Page 52 and 53: SOCIETY POSTPARTUM DEPRESSION IS A
Page 54 and 55: SOCIETY immediate family members an
Page 56 and 57: ENVIRONMENT Society in collaboratio
Page 58 and 59: HEALTH DEALING WITH CONSTIPATION Co
Page 60 and 61: HEALTH lower back, using your arms
Page 62 and 63: TID BITS Below are selected article
Page 64 and 65: BOOK REVIEW Reviewed by Angela Muti
Page 66 and 67: STAR OF THE MONTH STAY FOCUSED A gr
Page 68 and 69: TRAVEL By Clive Mutiso, clivemutiso
Page 70 and 71: KAMPALA ««««« PICTORIAL PROGRE
Page 72 and 73: ACCOUNTABLE RECIPES By Sharon Gaton
Page 74 and 75: PEN OFF questions effectively open

The Accountant-May-June 2017

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