MSI 20000

PRESENTATION

Fundamental

Each company, whether SME or multinational, is supposed to prepare its financial statements, at least annually. The maintenance of financial statements, which is the guarantor of a structured financial representation, is generally legally binding. The financial statements reflect the financial position of an entity. Financial statements are among the main tools of decision-making that contribute in the comparison of the present situation of a company to its past situations and to other companies.
The financial statements provide the basis for financial analysis and diagnosis and the resulting interpretations. It is precisely on this principle that financial certification is based.

Principles

Financial certification is by definition neutral, objective and universal.
The mathematical logic that makes up the evaluation process and the resulting measurement patterns follow an exclusively scientific reasoning, that guaranty the fairness and uniqueness of the certification.

Definition

The certification is a procedure whereby a third party, the certification body, provides assurance that an entity complies with a list of requirements specified in a standard specification.
The MSI 20000 certification is the certification dedicated to financial quality.

STANDARD MSI 20000®

Origin

Conceived since 2001 to the day after the Enron business, the MSI 20000 standard began to emerge among an elite of finance professionals. The standard is officially launched in 2008, following the subprime crisis. Initially driven by European players, the idea was to identify the healthiest values in the financial markets.
Today, the standard has become widespread for any company wishing to measure the quality of its financial activity and to promote it; whether listed or not, any sector of activity can be a part. The MSI 20000 certification is presented as a complete financial diagnosis followed by an index placed at the disposal of the market and its stakeholders (shareholders, investors, creditors, partners, customers, suppliers, etc.) that are looking for reliable and independent benchmarks.

Construction

MSI 20000 for Market Standard Indicator – Index 20000, is the standard of financial quality.
The MSI 20000 specification sets the requirements for the financial quality of a structure, depending on its sector of activity. The list of requirements as a guideline serves to support certification, which is based on 2 axes: solidity and financial performance. Two fundamentals guaranteeing every company: profitability, solvency and long-term sustainability.

Vocation

A certification, at a given referential, is an initiative of accreditation at a particular moment of an evolutionary system. The financial certification demonstrates conformity with a set of financial management criteria. Thus the MSI 20000 standard provides information on the quality of governance, in terms of financial management.

MSI 20000® CERTIFICATORS

INTERNATIONAL CERTIFICATORS IN THE SERVICE OF FINANCE
The Certification Bodies that deliver the MSI 20000 standard, are authorized to do so under very precise selection criteria. International certifiers, SGS and DEKRA, have been authorized to issue certificates of conformity according to the MSI 20000 standard. The SGS and DEKRA organizations, respectively Swiss and German, are among the world leaders in certification.
The MSI Organization, Swiss NGO, is the body responsible for disseminating and regulating the referential.
MSI gathers international expertise and experts in corporate and market finance.

MSI 20000® CERTIFICATION

Procedure

The MSI 20000 certification procedure is carried out as specified in the regulations of the MSI 20000 standard, in accordance with ISO 17021. This certification standard provides the requirements and principles of competence, consistency, impartiality and independence related to certification work


Competence

The MSI 20000 auditors are selected for their expertise and experience in the field of financial analysis and evaluation. Audit coordinators are chosen for their qualifications and their business expertise, in each sector of activity.

Consistency
The evaluation procedure is carried out on the basis of the financial statements approved by the statutory auditors; guarantee of the authenticity of the information provided.

The MSI 20000 measurement diagrams are based on mathematical and objective criteria, based only on scientific reasoning.

Impartiality
Evaluation is carried out with strict neutrality, with procedures strictly supervised and standardized on an international scale. The whole financial diagnosis carried out within the premises of the certifier, without the intervention of the beneficiary. For reasons of impartiality, audit coordinators are the only ones with whom the entity audited should deal with.

Independence
The procedure is carried out by an independent third party, having the statutes of a certification body. The MSI 20000 is an authorized certifier under the official MSI license, according to a number of pre-established criteria.
For reasons of impartiality, audit coordinators are the only ones with whom the entity audited should deal with. Their mission is to relay the activities between the two parties (certifier and beneficiary) during the audit process. The whole mission takes place at the certifiers’ premises, without the contribution of the beneficiary, which therefore does not mobilize any resources and space.

Processus

According to the international regulation of system certifications: a certification is issued following a specific and strictly supervised audit.
Audits have as base for their work: specifications and procedures.
As part of the financial certification, procedures are applied in accordance with the ISO 17021 standard. The specifications address carefully, by sector of activity, a set of financial instruments and models based on criteria of reliability and relevance.
The certification is issued according to the following procedures:

Major audit
The purpose is to measure the financial quality of an entity (company) in order to determine its conformity with the requirements of the MSI 20000 standard.

Certification
When the major audit reveals conformity, the audited entity is granted the certification. A certificate of conformity with the MSI 20000 standard is then issued to the entity. In accordance with the international regulations in force: certificates of conformity have a validity period of three years, from the date of grant and once the beneficiary remains representative of the certification.

Follow-up audit
For each certification cycle, the certifier performs, throughout the period of validity of the certificates, annual audits to make sure that the certified establishment is still in conformity with MSI 20000 requirements, by the year.
Within a three-year certification cycle, there are two follow-up audits (in n + 1 and n + 2).

Methodology

The MSI 20000 standard certification is based on the assessment of the conformity of the financial management system, by measuring the financial quality of an entity. To this end, the MSI 20000 specification mentions 3 steps, summarized below:

Data collection
The certifier is in charge of collecting the data that will be used for the audit from the beneficiary.
The main analytical source is the financial statements of the last few years, approved by the statutory auditors. Data collection takes place within the premises of the beneficiary, while the document review and the data processing take place at the certifier’s.
Any data transmitted or information communicated in connection with the certification missions is subject to confidentiality. The relationship between the stakeholders is fully confidential.

Technical diagnosis
The evaluation of the financial quality of an enterprise is measured via the axes of soundness and financial performance on the bases of financial statements and the MSI 2000° protocol understanding.
The evaluations take the form of a comprehensive and detailed financial analysis, exploring theme by theme, components and subjacents that directly or indirectly relate to the financial quality of a company. Each theme is taken individually by a selection of instruments, depending on the sector of activity.

AXES THEMES
SOUNDNESS Asset Management
Cash Management
Management of liabilities
Risk management
Human Resource Management
Operations Cycle Management
PERFORMANCE Commercial profitability
Economic profitability
Financial profitability
Overall Profitability
Operating profitability
Profitability and value creation

Table varying according to the sector of activity

Interpretation
It consists in comparing the results of the financial analysis with the benchmarks recommended by the standard MSI20000. This comparison makes it possible, with a scoring system, weighted by coefficients and gap reading algorithms, to measure and locate precisely the financial quality of a company and thus determine its ability to be certified.

The MSI standards are set on the basis of an international sectoral benchmarking, adjusted according to the specificities of each sector of activity.

BENEFITS OF THE CERTIFICATION

MSI 20000 has multiple benefits and can be introduced under two titles:

MSI 20000 business Expertise

From an internal point of view the evaluation reports describe in details the strengths and weaknesses of a company’s financial management.
The specifications of the MSI 20000 are the result of continuous work, created according to the most sophisticated financial evaluation schemes. Thus, through its predictive models, the relevance of the methodology leading to the MSI 20000 certification makes it possible to optimize the financial management processes by detecting deficiencies and anticipating future malfunctions. The issuance of alerts, together with recommendations to remedy them, is a constructive and practical approach to further development.

The MSI 20000 standard seeks to advance good financial governance practices by providing the company with, a financial information system, and reliable procedures and assistance, and decision-making schemes.  

The MSI 20000 communication vector

From an external point of view, a certification, as a vector of communication, is a reliable and concrete argument, reflecting the conformity of a system, with a set of requirements.
The financial certification is a commitment and strong initiative of accreditation at a given moment of an evolving system, according to a standard of excellence.
The use of MSI 20000 conformity marks is an indicator, directly contributing to the process of enhancing and improving the attractiveness of a company, by opening up the financial qualities of a company to the market.

In an environment in constant evolution, the MSI 20000 standard presents itself as a common index to economic actors and financial operators looking for financial benchmarks both nationally and internationally.

Advantages of the MSI 20000 Certification

  • A sectoral comparison of financial activity and its international positioning (via benchmarking)
  • A guide to conducting and supporting decision
  • making on financial strategies
  • A practical financial information system and perennial financial schemes
  • A valuation of the activity and the financial situation
  • A lever for the growth of good financial practices
  • An indicator of solvency and profitability
  • An index of risk control and integration of sectoral financial precautions
  • A commitment to a continuous improvement in financial attractiveness
  • A reliable and concrete benchmark, a guarantee of financial quality, for market operators and economic and financial partners
  • An undeniable competitive advantage- Taking a position at the international scale

Trademarks of conformity
User Manual MSI 20000
Logotype MSI 20000

ORGANISATION MSI®

OBJECT

MSI 20000 is a collective project bringing together skills from the international economic and financial spheres.
MSI organization is the referential dissemination and regulation authority
The MSI Organization is a Swiss NGO.
The role of the Organization is to update the referential and to monitor its scope.

Contact Information

Web : www.organisationmsi.org
Address: 3 Boulevard Georges – Favon – 1204 Geneva – Switzerland

Scientific Committee

comite-scientifique