In business, enterprise risk management (ERM) includes the methods and processes used by organizations to manage risks (or seize opportunities) related to the achievement of their objectives. ERM provides a framework for risk management, which typically involves identifying particular events or circumstances relevant to the organization's objectives (risks and opportunities), assessing them in terms of likelihood and magnitude of impact, determining a response strategy, and monitoring progress. By identifying and proactively addressing risks and opportunities, business enterprises protect and create value for their stakeholders, including owners, employees, customers, regulators, and society overall.

A Risk Based Approach

ERM can also be described as a risk-based approach to managing an enterprise, integrating concepts of strategic planning, operations management, and internal control. ERM is evolving to address the needs of various stakeholders, who want to understand the broad spectrum of risks facing complex organizations to ensure they are appropriately managed. Regulators and debt rating agencies have increased their scrutiny on the risk management processes of companies.

Think for instance how Information technology has revolutionized the way in which transactional data is generated, stored, summarized and reported. For many organizations, these changes have streamlined financial reporting. However, accounting and reporting efficiency aside, the complexity and interconnectivity of today’s accounting information systems introduces substantial risks and creates new assurance and compliance challenges. In fact, IT is considered an aggravating factor in fraud and financial misstatement, and is recognized as a substantial contributor to enterprise risk. Organizations place enormous faith in auditors to help them comply with internal, regulatory and industry standards, yet many lack the integrated technology and financial expertise. So how should management address the risks?

We Can Help!

As assurance specialists, we understand risk management, including internal controls and the regulatory and compliance issues in today’s environment. However, as information technology specialists and experienced business professionals, we are also qualified to assist in areas outside of accounting software.