Enterprise Risk Management - 3381 Words

Enterprise Risk Management In the 21st Century, the news of corporate scandals involving corruption enormously spread across not only the country but across the globe also. Accounting firms, investors, lenders, corporate managers and innocent bystanders were all embroiled in the chaos with the extent of corporate malfeasance being indeterminable. Collateral damage inflicted by scandals involving corporations such as Enron, Arthur Andersen LLP, WorldCom, Adelphia Communications, etc, was shocking. The occurrence of such business and audit failures led individuals in a state of contemplation. How did such situations occur; what could have been done to prevent them? This is where Enterprise Risk Management (ERM) comes in effect. As†¦show more content†¦Once this is underway, the first step is to assess the risks faced by the company. The goal of ERM is to manage and mitigate as much risk as possible. With this in mind, the ERM function of a corporation should attempt to accurat ely locate these risks. This can be accomplished through a top-down evaluation followed by a bottom-up evaluation. Top-down evaluation of risk involves speaking with upper-management and moving through the chain of command to determine how integral each unit of the company is to the company’s successful operation. Not all business units are made equal as far as their possible impact on a company; therefore, this exercise will determine which departments are essential to the operation of the company. Bottom-up evaluation is at the heart of a company’s ERM risk valuation. In this process, managers at all levels of the company should be interviewed, beginning with the lowest level and progressing upward. At each level, the management for a business unit will work with the ERM staff to brainstorm all risks that the unit faces. It is important that there be no punishment for the unveiling of a risk. Instead, bonus compensation should be tied in, so that no undeclared, fores eeable risks occur within a unit. Through the determination of risks at this atomic level, each risk needs to measured closely so that work can later be done to install mitigating controls, which will bring residual risk to an acceptable level. MeasuringShow MoreRelatedEnterprise Risk Management1609 Words   |  7 PagesAbstract This paper discusses how a company can successfully implement the Enterprise Risk Management based on COSO guidelines. This paper discusses a step by step process of the implementation plan at Dell Inc, the responsibilities of the workforce and management, the risk mitigation approach and how to monitor the activities successfully. Enterprise Risk Management In the wake of all the financial scandals, a variety of laws and regulations have been passed which makes the board of directorsRead MoreRiordan Enterprise Risk Management Plan1294 Words   |  6 PagesGeorgia, Michigan, and China. Their products include beverage containers, plastic fan parts, and custom plastic parts. Riordan prides themselves on their industry leading research and development (University of Phoenix, 2009). The following Enterprise Risk Management (ERM) plan was developed for Riordan Industries, Inc. and its subsidiaries. The goal of this plan is to help mitigate any legal liability on the part of Riordan by implementing the Committee of Sponsoring Organizations of the Treadway CommissionRead MoreA Research On Enterprise Risk Management Essay1909 Words   |  8 Pagespresident, Theodore Roosevelt, said, â€Å"Risk is like fire: If controlled it will help you; if uncontrolled it will rise up and destroy you.† This comparison of fire and risk remains true for political means but also the everyday operations of any company. A company is confronted with decisions demanding the assessment of risk every day. Enterprise risk management is a framework for handling the assessment of risk that companies may encounter. The enterprise risk management process is a formula for employeesRead MoreEnterprise Risk Management1504 Words   |  7 PagesEnterprise Risk Management The Non-Linear Pro salesman told the manager of Quick Takes Video that the editing system leased would allow the employees to edit material twice as fast after only a day and a half of set up and training. After all employees received the one-day training course, completed the video tutorial, and read the manual, problems with the equipment stopped production of a Quick Takes Video project. During an attempt to insert a CD, an employee cut her finger on a sharp edgeRead MoreEnterprise Risk Management4038 Words   |  17 PagesEnterprise / Operational Risk Management IT Audit Manager City National Bank California State Polytechnic University, Pomona Enterprise risk management (ERM) is a relatively new discipline that focuses on identifying, analyzing, monitoring, and controlling all major risk classes (e.g., credit, market, liquidity, operational risk classes). Operational risk management (ORM) is a subset of ERM that focuses on identifying, analyzing, monitoring, and controlling operational risk. The purpose ofRead MoreAnalyzing Risk With Enterprise Risk Management1114 Words   |  5 Pages Analyzing Risk with Enterprise Risk Management Paper Flora Azinge University of Phoenix Risk Management DHA/712 Dr. Mary Jo Brinkman June 29, 2015 MEDICATION ERROR INCIDENT REPORT DESCRIPTION OF THE INCIDENT: Nurse was passing medication at a particular room in a given hospital in the state of California. There were about four patients in the room as was approved by the regulation. Nurse mistakenlyRead MoreEnterprise Risk Management ( Erm )1531 Words   |  7 Pagesabout the Enterprise Risk Management (ERM). How much risk can be taken so that gain can be increase as risk is directly associated with gain Answer 1: Enterprise Risk Management (ERM) has great potential to provide organizations with new competitive advantages. Enterprise Risk Management (ERM) is designed and disciplined approach to deal with strategy, processes, people, technology and knowledge by the motive of evaluation of management of uncertainties which are faced by the enterprises and generatesRead MoreEnterprise Risk Management ( Erm )1741 Words   |  7 Pages Introduction âž ¢ What is Enterprise Risk Management (ERM)? Enterprise Risk Management (ERM) is process of planning, organizing, leading, and controlling the activities of an organization in order to minimize the effect of risk on an organizations capital and earnings. ERM expands the process to include not just risks associated with accidental losses, but also financial, strategic, operational, and other risks. âž ¢ Benefits of Enterprise Risk Management In Finance †¢ Financial IncentivesRead MoreEnterprise Risk Management ( Erm )1166 Words   |  5 PagesLiterature Review Enterprise Risk Management (ERM) In light of the fraud scandals that took place in 2001 and 2002 companies all over the world have been introduced to a new system to help incorporate corporate governance, risk management, and the requirements made by the SOX. That new system is known as Enterprise Risk Management (ERM). The ERM system has been suggested to be the new system to help companies predict risk and help achieve their overall objectives (Arena, Arnaboldi, Azzone, 2011)Read MoreThe Ethics Of Enterprise Risk Management818 Words   |  4 Pages â€Å"Enterprise risk management views all risks to the firm as subject to management and control† (Fraser Simkins, 2010, p. 351). As we have learned, Enterprise Risk Management has three primary principles, which are: ensure organizational survival, provide social responsibility, and increase the organization’s value, while engaging employees in performance and maintaining their well-being (Bethel, 2016). In its simplest terms, legal risk equates to financial loss (Smith, 2008). In researching