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Inside Internal Controls

News and discussion on implementing risk management

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enterprise risk management

Silos are thriving even in ERM programs

You are the captain of a ship that is sailing from Singapore to Auckland with a cargo that needs to be kept cold and will lose its freshness if you don’t arrive within a few days of your schedule.

 

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New report on the cost of a cyber breach

You may be surprised to hear that the average cost of a data breach is just $3.9 million. That sounds far different than indicated by the alarm bells screaming at you from all sides.

 

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Finally some good advice on risk for boards

While I still disagree in some areas, I applaud Jim DeLoach for his latest piece for the (US) National Association of Corporate Directors, Revamping Risk in the Digital Age. Please read the entire piece, but here are points I especially like, with my highlights:

 

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Do risk appetite statements add value?

Whilst the majority of firms had risk appetite statements that were set by the Board and which were supported by relevant metrics, 50% of respondents noted that their risk appetite statements did not link to the firm’s strategy or to the actual underlying risk the firm faced, and did not provide a forward looking view of risk.

 

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An ERM horror story

Does it make sense to aggregate risk levels for a variety of risk sources, including cyber, compliance, credit, liquidity, competitor, and internal control over financial reporting?

 

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Insight into effective risk management

I need to draw your attention to a provocative piece by his firm (presumably by him): The risks of risk management. (My thanks go to Tim Leech for tweeting about it.)

 

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CEOs are not idiots when it comes to risk management

If you consider the small number of organizations where risk management is considered as providing a strategic advantage, one of these alternatives must be true:

 

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If risk management is the answer, what is the question?

We need to stop coming up with new words and phrases when all we need to address is the effectiveness of management. So stop talking about ERM, IRM, or even objective assurance, and start thinking about how to obtain reasonable assurance that the management of the organization, including how it sets objectives and makes related execution decisions, is effective.

 

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Time (again and still) for the IIA Standards to be correct

Internal audit can assist management by facilitating a fraud risk assessment. Management should make the decision both on the level of risk and whether it is acceptable. Internal audit can provide their opinion and advice on both.

 

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The accountants’ role in risk management

The International Federation of Accountants (IFAC) has published an interesting and useful piece, Enabling the Accountant’s Role in Effective Enterprise Risk Management.

 

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Excellent advice for all of us involved in managing risk

The International Federation of Accountants (IFAC) has published a first class document, Enabling the accountant’s role in effective enterprise risk management.

 

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The role of internal audit in risk management

If we are stressing that risk management is really all about effective, informed and intelligent decision-making, shouldn’t internal audit start focusing on the quality of decision-making processes?

 

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Why do we need risk management?

Risk management is about helping an organization achieve its objectives in the face of uncertainty.

 

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What is your consolidated risk exposure?

This article discusses consolidated risk exposure and different risk management tools.

 

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Are you managing risk or are you managing the organization?

Stop managing risk – manage the business. Stop talking about accepting or managing risk and start talking about taking the right risks through informed and intelligent decisions.

 

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