Stewardship Reports

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Stewardship Reports

• Finance 300
• Portfolio Management Simulation

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Steward

• The title of Steward was sometimes given to the
  person in charge of a noble's domestic staff and
  household. In some countries, the duties of a
  steward became more substantial, and included the
  management of finances and property. The House of
  Stuart, which eventually became the royal house
  of Scotland (and England), originally gained both
  its position and its name from their position as
  stewards to the king.
• Wikipedia (http//www.answers.com/topic/steward?me
  thod5linktextsteward)September 28, 2006

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Portfolio Management Simulation

• The Stewardship Report is an accounting document
  by which the Portfolio Manager(s)
• Reports to the client
• Audits the broker
• Lets his Manager/Company know he's doing a good
  job and won't get them fired or sued.

This is you
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CLIENT Nice person who pays you to manage his
portfolio
PORTFOLIO MANAGER
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PORTFOLIO MANAGER
UISES is your broker
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Professional Relationships
PORTFOLIO MANAGER
Client Relationship
Broker Relationship
CLIENT
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Stewardship Report
Boss (Professor)
Management Report
PORTFOLIO MANAGER
Stewardship Report
Email Correspondence
CLIENT
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Client Report

• Consists of
• Title Page
• Summary of Assets
• Transactions Record
• Income Statement

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Client Report

• Provides the client with a complete, accurate
  report of his portfolio.
• Acts as evidence that you are a thorough,
  trustworthy steward of the clients financial
  assets.

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Management Report

• Demonstrates to your Boss/Professor that you
  balanced the statement to itself and to UISES
  before you sent it to the client.

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Management Report
Thebrokerage Statement is a source document
changing the numbers on a source document gets
you an F (for Fraud)

• Consists of
• Management Report Summary
• Brokerage Statement

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Management Report

• Compares the numbers derived from the Stewardship
  report with the numbers on the brokerage report
  to make sure that they balance.

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Management Report
Each number in the Report column is taken
directly from the stewardship report.
Each number in the UISES column is typed in from
the UISES statement.
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Balance

• Balance means that two things are found
  equivalent.

Market Value
Market Value
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Out of Balance

• The Stewardship Report template contains balance
  points that raise a red flag if the balance
  condition is not met.

Book Value Out of balance
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OUT OF BALANCE

• Out of balance report F
• Out of balance report with the red flags removed
  to disguise the discrepancies J

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OUT OF BALANCE

• An out of balance flag is a symptom of a problem
  so dig out the cause of the problem, dont just
  paper over the symptom

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OUT OF BALANCE
Bernie Madoff -gt
lt- Sir Robert Allen Stanford
Bernie Ebbers -gt
lt- Andrew Fastow
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Stewardship Reports

• A perfect score on the stewardship report means
  that I could send it to the client as is. This
  requires
• that the report balances to itself and to UISES
• that the format is clean and professional

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Point Allocation Contracts

• Include a signed contract for point allocation
  out of 20.

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Survival Guide
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Template

• Remember that the template is a tool designed to
  assist you, it is not a plug-and-play guarantee.
  It is your responsibility to ensure that your
  stewardship report is clean and accurate.

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Font Size

• Use a font of no less than 8 pts. PRINT AT 100
  ON ALL PAGES If you print fit-to-page the font
  becomes microscopic and neither you, I, nor the
  client, can read it without using a magnifying
  glass. If in any doubt whatsoever stick with the
  Arial Narrow 10 in the template. Anything smaller
  will not be accepted. Print size is controlled in
  the FilePage Setup applet.
• Use a font of no less than 8 pts. PRINT AT 100
  ON ALL PAGES If you print fit-to-page the font
  becomes microscopic and neither you, I, nor the
  client, can read it without using a magnifying
  glass. If in any doubt whatsoever stick with the
  Arial Narrow 10 in the template. Anything smaller
  will not be accepted. Print size is controlled in
  the FilePage Setup applet.

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Font Size
Do not use fit-to-page
It's never a good idea to insult the intelligence
of your client by giving him tiny print inside a
huge white space
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Signatures

• Signatures

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Group Dynamics

• Two people prepare the report.
• Another member of the group audits it.
• Yet another member proofreads.

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Auditor

• The signature of the person who audited the
  report means that he takes responsibility for the
  accuracy of the numbers prepared by the group.
• The auditor also verifies the dividends.

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Proofreader

• The signature of the person who proofread the
  report means that he takes responsibility for the
  professionalism of the report. This includes
  sloppy printing, missing headers, unaligned
  decimal places, mismatched fonts and font sizes,
  margin sizes, etc.
• Make sure you proofread from the printed copy,
  not from the computer screen.

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Professionalism

• If the same person prepares, audits, and
  proofreads you won't catch the errors and
  omissions.

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Professionalism

• Having one person prepare, audit, and proof and
  then having different people sign as preparer,
  auditor, and proofreader constitutes fraud.
• If we don't get you, Sarbanes Oxley will.

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Stewardship Reports

• The End