Risks Of A Risk Management Program Essay

Risks Of A Risk Management Program Essay

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When you first think of risk management you think of having control, problems that may occur, or problems you can prevent from occurring. Risk management is a popular term and is very important when planning for a business. As an accountant, you always want to be very aware and alert. Given the economic landscape of the past years, a company’s business model is challenged constantly by competitors and events that could give rise to substantial risks (Byrnes, Williams, Kamat, & Gopalakrishnan, 2012). Not being aware of the business and risks that may take action can be a major loss for an organization. Most organizations have begun to realize how important it is to a risk management program especially with all the new technology and high turnovers many businesses are having. Not only has risk management been widely affective in many organizations but the United States Securities & Exchange Commission (SEC) also has authorized it ). In 2009, the SEC passed Rule 33-9089, which mandated risk oversight by company boards of directors (Gates, Nicolas, & Walker, 2012).
As many of us now are working in firms or other entities, we always have questions and are looking for answers right away. A great process to look toward would be enterprise risk management also known as ERM for short. This can get you answers to many of your questions. ERM is define as a process, effected by an entity’s board of directors, management and other personnel, applied in strategy-setting and across the enterprise, designed to identify potential events that may affect the entity, and the manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives (ucop.edu). This is such a broad definition but has ...

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...ther system the ERM should be evaluated and check periodically to ensure it stays effective for assessing risk. As we all is aware, things does change and by checking it, it’ll help stay up to date. Risk management is something that will never end as problems and threats will always arise and it is totally up to the organization how to handle them or carry the right systems that will actually help them prepare for problems that may occur.
As I stated above, ERM can be valuable to any organization. After doing my research I would strongly encourage all organization to get the ERM to help monitor your business. In order to have your employees following the policies and procedures, your managers need to be great role models for them as well as your company. ERM helps with the controls on the inside to help you as an individual and company have a great performance.

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