Uncertainty has always accompanied business operations. It cannot be avoided; it must be faced. Management and boards should openly recognize that the pace of change has increased and become more interconnected and global in nature, with the audit committee playing an active role in risk…
The 2013 COSO Internal Control-Integrated Framework acknowledges those changes. The 2013 COSO Framework retains the principles-based internal control components found in the 1992 COSO Internal Control Framework while re-codifying 17 concepts associated with those components. That enables…
The most direct cost of that fraud may be measured by the amount of assets stolen or in the difference between actual financial performance and what was presented in misstated reports. Costs may extend to stockholders, current and retired employees, vendors, customers and others.
Responding to risks and lowering vulnerabilities enables an organization to sustain itself and thrive amidst the continual internal and external changes it faces. That function accompanies the organization’s business strategy and provides a strategic advantage itself.
Organizations vary in their business strategies. A manufacturer may seek to enhance efficiency through outsourcing production to overseas contract manufacturers. A distributor may focus on becoming a one-stop supplier source for prospective customers.
The business climate has changed amidst the recent economic difficulties most organizations have experienced. New risks that influence business success have arisen. These challenges illustrate the importance of identifying and assessing strategic risks.
Addressing risks at the process level represents a continuation of the emphasis organizations place on recognizing and reducing vulnerabilities, an emphasis first directed toward threats accompanying business strategies.