Organisation and Policies

Question 1

What is segregation of duties?

Answer 1

• control put in place in order to reduce risk of fraud or error.
• four eyes principal- no employee should have the ability to commit and conceal fraud/error in the usual course of their duties.

Question 2

How is segregation of duties achieved?

Answer 2

• Split of treasury into front office and back office.

Question 3

What are some duties which should be segregated?

Answer 3

• ability to make and authorise payments/ transactions.
• recording/ accounting for transactions.
• execution of fx deals and confirmation on f the details to the counterparty.

Question 4

What are the reasons for outsourcing?

Answer 4

• lack of specialist skills in-house.
• more efficient, lower cost processing of transactions (e.g outsourcing payments to a country with lower wages).
• freeing up more time for strategic decision making.
• saving the high cost of keeping up with technology advances.

Question 5

Which functions should NOT be outsourced?

Answer 5

• core competencies.
• areas in which the business has superior competence and therefore generates added value.
• strategic decision making.

Question 6

What is a business critical function?

Answer 6

• a function of which the failure of would jeopardise the capacity of the organisation to operate.
• I.e IT, HR, Treasury

Question 7

What is the key role of the capital markets and funding area of Treasury?

Answer 7

• the financing of the organisations activities.
• this could include raising bank loans, funding from bond markets, or equity from existing or new investors.

Question 8

What is the key role of the Corporate financial management area of Treasury?

Answer 8

• the practice of developing strategies and plans and making investment decisions that positively affect the value of the corporate.