Adding value to your ship management business. Shipping & Transport PRECISE. PROVEN. PERFORMANCE.

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1 Adding value to your ship management business Shipping & Transport PRECISE. PROVEN. PERFORMANCE.

2 2 Shipping & Transport

3 Adding value to your ship management business The management of risk and implementation of robust corporate governance is an increasingly important aspect of global business. Regulation is becoming ever more complex and daunting, while stakeholders, including customers and suppliers, are expecting greater transparency. The pressure on senior executives and boards is to not only adhere to these requirements, but to ensure that such systems are aligned with business objectives, strategies and internal functions. Companies that approach risk from a purely compliance point of view do not appreciate its value to sound business practice. However, those who embrace a formal framework to structure and organise their risk environment, will reap the benefits, providing value and empowering the business to achieve its goals. The process of assessing the existing environment and implementing procedural and control change can be an educational one, allowing those charged with governance to truly understand their business and the way it functions. Our services Service organisation reviews (ISAE 3402, SSAE16) SORs As use of third-party or outsourced services increases, ship owners need assurance over the extent and effectiveness of the controls their service providers have in place. SORs are designed to meet this need. International Standard on Assurance Engagements (ISAE) 3402, Assurance Reports on Controls at a Service Organisation, is a global standard developed by the International Auditing and Assurance Standards Board. How do ship managers benefit from commissioning a SOR? The reviews help to retain and attract international business. Clients, particularly public interest or listed companies, increasingly ask to see these reports in order to gain assurance on the quality of controls being operated by the service supplier. This may even be a pre-requisite for doing business. Regulation is becoming ever more complex and daunting, while customers and suppliers are expecting greater transparency. Regardless of your chosen framework, with our expertise in the shipping sector as well as governance, risk and assurance services, Moore Stephens is perfectly positioned to support your business through a hugely rewarding exercise. Our services are designed to ensure ship management businesses comply with regulation, achieve best-practice and add value to their ship-owning client base. Clients auditors can also use the reports to gain assurance on the quality of controls in place, rather than each audit firm visiting the ship manager s premises to conduct their own verification and testing. Shipping & Transport 3

4 Adding value to your ship management business There is an increased awareness amongst investors and private equity firms of the need for robust and effective internal controls at the organisations they invest their money with and many clients are now asking for reports detailing this information as part of their investment appraisal process. Forward-looking ship managers can use their review report as a marketing tool to gain competitive advantage over rivals by showing that effective controls have been implemented and, depending on the type of report, operated effectively over a given period. The reviews can also play a part in risk management concerning the delivery of services to clients. Directors can gain peace of mind as to the operational effectiveness of their controls and hence their ability to provide services consistently and securely. What types of report are produced following a review? Ship managers can choose to receive a Type 1 or Type 2 report: Type 1: this looks at the design and implementation of the controls in place in the organisation. Type 2: as well as looking at control design and implementation, the report addresses the operating effectiveness of those controls over a given period (not less than six months). What is involved in an ISAE 3402 review? The process begins with the directors preparing a report documenting the procedures and controls they believe to be in place. If seeking a Type 2 report, the directors should also make sure there is an audit trail so that the reporting accountants will be able to find evidence concerning the operational effectiveness of the procedures and controls over the specified period. How do the reporting accountants convey their findings? ISAE 3402 sets out a standardised approach for how the accountants should report their findings. In the case of a Type 1 report, the reporting accountants will express an opinion on whether the directors description fairly presents the organisation s control system, and whether the controls were suitably designed. In a Type 2 report the accountants will also express an opinion on whether the controls operated effectively throughout the specified period. Where the accountants have found some exceptions such as controls not operating effectively these will be reported. How often are ISAE 3402 reviews performed? Organisations that commission an ISAE 3402 review typically seek to have them performed annually, so that they have ongoing and up-to-date assurance on the operation of their controls. 5 Shipping & Transport

5 How can I find out more? Moore Stephens dedicated Shipping & Transport team have a wealth of experience of the challenges of operating in the current shipping markets and regularly support clients reporting to their investors and stakeholders. Please contact a member of the team to discuss this further. Other specialist services Operating cost benchmarking reviews Our unique annual vessel running costs benchmarking service is now established as the primary source of operating cost information for the international maritime industry. We continue to add new information and new lines of analysis, providing data on the running costs of over 3,300 ships within 24 vessel types, allowing users to benchmark and compare vessel running costs with industry averages and identify cost saving areas. Our reports can assist ship managers to benchmark their costs against peers and identify areas of concern. Rhiza: our risk management software Rhiza is our bespoke risk management software developed by Moore Stephens. Combining professional risk management expertise with intelligent design, Rhiza is an easy-to-use, customisable and cost effective software solution which can help overcome the practical difficulties of managing risks at an enterprise level and ensuring compliance with listed company requirements. Technology risk & integration Technology plays a critical role in business success. When performing well, IT systems support management in fulfilling the business strategy, providing timely, reliable information in a secure environment; at their worst they drain investment resources and hamper efficient decision-making and operations. At all times, but particularly in a difficult economic climate, management need to be confident that they are getting value for money from their IT investments. They require their systems to produce accurate data. They also need confidence that their IT systems are secure, able to withstand external or internal threats. And in this increasingly uncertain world, they also seek assurance that their business can cope with a disaster and continue operations effectively. Our IT assurance and advisory experts can help ship managers understand and manage these challenges. Cyber and information security The risk of cyber-attack is growing exponentially as the opportunities presented by technology and improved systems connectivity grow. This threat to information security is an existential threat to many organisations. Our cyber security services are unique in that they focus on using our expert staff to help you balance opportunity and risk. We can help educate, train, test or even run your information and cyber security programme. Maritime document and accounting database Moore Stephens have for many years been providing bespoke computerised database systems. More recently, we have combined this technology-based service with our long standing experience of the shipping industry to provide a complete accounting and document solution. Our approach is to take the data and documents and create two separate but linked secure databases. The first is a documentary database which scans (digitises) all hard copies of the spreadsheets and creates a library of electronically searchable documents. The software we use enables sophisticated search techniques to be used in follow up investigation work. From the documentary database a separate accounting database is created by extracting the financial data from the scanned documents. This separate accounting database records all the financial transactions down to their lowest element. Once the accounting database has been created and validated it can present the information in any format required, for example by analysing all costs by supplier and then by supplier s invoice. SOX compliance It has never been more important for shipping businesses to have robust systems Shipping & Transport 5

6 Adding value to your ship management business and controls underpinning their operations. This materialises itself most obviously in SEC registered entities which are required to comply with the Sarbanes Oxley Act of 2002 and the more recent COSO 2013 framework. Working with management and using our in house SOX specific risk management software, we can help implement and maintain sustainable compliance programmes by assessing the existing environment, providing recommendations and valued feedback, documenting the procedures and testing the controls. We establish clear lines of communication with management and the external auditors to ensure that this challenging process is as streamlined as possible and that issues are highlighted and addressed early before they become problems. Moore Stephens can help you through the process, which is summarised as follows: risk assessment; identification of key internal controls designed to mitigate those risks; documentation; testing of key internal controls; and reporting. Key global shipping and transport contacts Africa Europe South Africa Durban UK London Jochen Faber Michael Simms Americas Cyprus Limassol USA New York Christos Christodoulou Michael Halkias Greece Piraeus John Repetti Costas Constantinou Brazil São Paulo Monaco Sérgio Lucchesi Filho Andrew Gallagher Asia Netherlands Rotterdam Hong Kong Michael Bick Helen Tang Norway Oslo Singapore Bjørn M. Naustheller Chris Johnson Middle East UAE Dubai John Adcock 6 Shipping & Transport

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8 About Moore Stephens Moore Stephens is a top ten accounting and advisory network, with offices throughout the UK and member firms across the globe. Our clients range from individuals and entrepreneurs, to large organisations and complex international businesses. We partner with them, support their aspirations and contribute to their success. In-depth understanding of our clients allows us to deliver focused accounting and advisory solutions, both locally and globally. Clients have access to bespoke services and solutions, including audit and assurance, business support and outsourcing, payroll and employers support, business and personal tax, governance and risk, corporate finance, forensic accounting, wealth management, IT consultancy, and restructuring and insolvency. Our success stems from our industry focus, which enables us to provide an innovative and personal service to our clients in a range of sectors. Moore Stephens globally Moore Stephens International is a top ten global accountancy and consulting network, headquartered in London. With fees of over US$2.66 billion and offices in 106 countries, clients have access to the resources and capabilities to meet their global needs. By combining local expertise and experience with the breadth of our UK and worldwide networks, clients can be confident that, whatever their requirement, Moore Stephens provides the right solution to their local, national and international needs. Contact information If you would like further information on any item within this brochure, or information on our services please contact: Sarah Hillary Partner Sarah is Head of the Governance, Risk & Assurance department, and boasts a wide range of commercial, not-for-profit and public sector experience. She has worked with organisations ranging in size from PLCs to SMEs and owner managed businesses. Sarah specialises in delivery of controls assurance specialist services and is the lead partner for our work on ISAE 3402 reviews. In 2000, Sarah established and was the joint owner of a specialist governance, risk and assurance consultancy practice prior to merging her business into Moore Stephens LLP in January Sarah is a Chartered Accountant and has 20 years post qualification experience. sarah.hillary@moorestephens.com Alex Traill Director As a Director within our Governance, Risk & Assurance department, Alex manages our controls assurance offering with specific experience in family offices, financial services and shipping sectors. With 12 years experience working in his chosen sectors, Alex deals with ISAE 3402 reviews, Sarbanes Oxley advisory services and other tailored controls assurance assignments. Alex helps clients establish robust control environments and often assists management in their monitoring and testing to ensure clear, transparent and responsible reporting. He has an accounting background and has worked as an external auditor, so has the ability to see things from the client s perspective rather than an outsider looking in. alex.traill@moorestephens.com Amin Musa Audit Manager Amin is ACCA qualified and has undertaken a wide variety of assignments in both the private and public sectors. These assignments include auditing, fraud investigations, risk assessments and governance reviews. Amin has a strong grasp of governance, finance and risk issues in the public sector. He leads the audit team responsible for delivering the ISAE3402 reviews for clients including property management companies and other organisations. amin.musa@moorestephens.com Moore Stephens LLP, 150 Aldersgate Street, London EC1A 4AB T +44 (0) We believe the information contained herein to be correct at the time of going to press, but we cannot accept any responsibility for any loss occasioned to any person as a result of action or refraining from action as a result of any item herein. Printed and published by Moore Stephens LLP, a member firm of Moore Stephens International Limited, a worldwide network of independent firms. Moore Stephens LLP is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Authorised and regulated by the Financial Conduct Authority for investment business. DPS31475 March 2016