Standard

Repository : MSI 20000 [Market Standard Indicator – Index 20000]
Definition : International Standard for the Quality of the Financial Position of Economic Entities
Theme : Finance
Creation : 2008
Scope : Global

History

The MSI 20000 standard was officially created in 2008, between New York and Paris, driven by researchers and financial professionals, after the “subprime” crisis. Initially and following the bankruptcy of the American bank Lehman Brothers, on September 15, 2008, it was a question of identifying the soundest listed financial institutions, in order to avoid by construction and contagion effect, to reproduce the crash of 2008. But very quickly, given demand, the standard has been rolled out to all types of companies, listed or not, all sectors of activity combined. In 2017, the MSI 20000 standard became the international standard for financial quality; following a period of 100 months of experimentation, within a strictly supervised scope. In 2018, the standard was taken up and distributed by the world leaders in certification.

Fundamentals

Every company across the world, in all sectors of activity, whether it is a very small business or a multinational, is concerned with the establishement, at least annually, of its financial statements.

Financial statements reflect the accounting position of a business. The keeping of financial statements is generally of a legal and mandatory nature, allowing a structured financial representation of the company, according to usual and common reading standards.

Financial statements are considered in the life of a company, as one of the main decision-making tools and by definition, and an instrument for comparison over time of the financial situation, but also compared to other companies.

The financial statements serve as the basis for financial analyzes and diagnosis as well as for the resulting interpretations. It is precisely on this principle that the MSI 20000 financial certification is based.

Principles

The MSI 20000 certification is based on the financial assessment of economic entities, in particular through the analysis of their financial statements.

The MSI 20000 certification process is intended to be simple, clear and unconstrained. It is about issuing a reliable and concrete opinion, built on the analysis of the financial situation. The MSI 20000 analysis is neutral, objective and universal. A rigor permitted by the scientific approach of the methodology for evaluating the financial statements entrusted, guaranteeing the value of fairness and the principle of replicability of the evaluation.

A mechanism leading to the organization of the process, from the phase of collecting quantitative data (accounting and financial), to the evaluation phase in order to obtain the financial certification  MSI 20000.

Positioning

A comparative study on the theme of “Corporate Finance” makes it possible to precisely locate the positioning of the financial certification activity in the life cycle of a company.

It emerges that the financial certification is strategically located between the statutory audit and the financial rating. In practice, the Statutory Auditors, Financial Certification and Financial Rating are 3 central and essential activities in the life of a company. These activities are complementary to each other.

ACCOUNTING AUDIT

FINANCIAL CERTIFICATION

FINANCIAL RATING
PURPOSE Aims to ensure the veracity of accounting information, as well as the sincerity and regularity of the accounting and their ability to reflect a faithful image of reality. Certify compliance with the requirements of the international standard of financial quality for companies, according to their sector of activity. Evaluate the capacity of a structure to meet its financial commitments. The rating activity aims to assess the financial solvency risk of an economic entity or the quality of a financial product.
INTERESTS Assessment of the accounting system.
Examination of the accounting information.
Guarantee of the reliability of the accounting information.		 In-depth analysis and complete diagnosis.
Process for improving the financial situation and lever for progress.
Consolidation of financial attractiveness.
Management tool.
Positioning and sector comparison.
Issuance of certificates of conformity.
Valuation of financial activity, through a reliable and concrete marketing tool.		 Estimate the credit risk (risk of an issuer default).
Report providing information on solvency.
Consolidation of financial attractiveness.
Positioning and sector comparison.
STAKEHOLDERS Accounting firms. Certification bodies. Rating agencies .
TERMS AND CONDITIONS Intervention at the beneficiary office.
Work carried out in consultation with the beneficiary.
Objective vision.		 Few evaluation constraints : work carried out independently, with the certifier.
Intrinsic evaluation of the beneficiary.
The analysis is based on factual, accounting and financial data.
Comparative and sectoral approach.
Mathematical and Scientific Approach.
Objective vision.		 Intervention at the beneficiary’s offices.
Work carried out in consultation with the beneficiary.
Company information and information related to its environment, for work support.
Interpretations are based on analysts’ perception, on the future financial situation of the beneficiary, taking into account a set of parameters, internal and external, through complex and variable scales from one agency to another.
STAKEHOLDER ENGAGEMENT Mandate of a fixed term, renewable within a certain limit. System certification regulations: 3-year cycle. One-off operation or medium-term commitment.

MSI Observatory

The MSI 20000 financial certification is a collective project that brings together leading experts and skills from the international economic and financial sphere.

MSI Observatory, a non-profit NGO, scientifically carries the MSI 20000 repository.

MSI Observatory is the body in charge of disseminating and regulating the MSI 20000 standard. The mission of the Observatory is to update the novelties regarding the standard as well as to control its fields of application.