Internal controls and societe generale sa

Reference no: EM1350918

The importance of internal controls ... a little side trip due to current events: This is an article that highlights the importance of internal controls in managing financial functions (and by extension to managing all business functions). Can you read this article:

https://www.bloomberg.com/apps/news?pid=20601087&sid=a2NmAKy7H6sY&refer=home

Societe Generale SA, a major French financial institution, has suffered a 4.9 billion euro (more than $7 billion) loss due to internal control breakdowns that allowed one trader (in these situations, always described as a`"rogue trader" for some reason) to take on far more risk than was prudent. A number of prior incidents of this type are mentioned in the article. A prior incident, not mentioned in the article, caused the actual failure of Barings Bank some years ago. Volkswagen had a similar incident in its history. Many other such incidents have occurred usually, of course, not of this magnitude.

Please give me your thoughts on the article.

Reference no: EM1350918

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