Coso Framework

Enterprise Risk Management (ERM) is a series of processes used to identify risk, implement strategies to address risk, and monitor impact on the organization. Indeed, an effective ERM will consist of a corporate profile, which is a record of key risks that would hinder the organization in achieving their key objectives (Fraser & Simkins, 2010). Ideally, the risk profile is created as a tool to communicate with the Board of Directors, but may be used as a means of communication with all levels of management (Bethel, 2016). Typically, there are variations of the risk profile based upon the level of management, such as duration, types of risk, and purpose (Fraser & Simkins, 2010).

Internal controls are vital to any company’s business and financial sustainability. Internal controls consist of measures taken by a company safeguarding against fraud, and theft. Internal controls ensure accuracy and reliability in accounting data, and secure policies within the organization. Further, internal controls evaluate all levels of performance. These are addressed with five principles

LJB Company inquired about new internal control regulations required if they choose to go public. This report will discuss the regulations

For Riordan to adopt COSO Enterprise Risk Management (ERM) practices in a new initiative, they are more likely to have a successful implementation if they have the full support of the board and chief executives. The ERM plan should not only be compatible with existing organizational goals, it must also be integrated into the culture so that risk management can become salient at all levels of the organization. Even though risk management should be spread throughout the culture, the aims of the program should be concise and focus on a small number of the top risks. Two of these risks that should definitely be among the top of the list are compliance and legal liability that might arise from the company's operations. This report will outline some of the key concepts that should be embodied in the new COSO strategy at Riordan.

Enterprise risk management, also known as ERM, was introduced in 2004 as a strategy to manage risk within a company to avert future outcomes that can negatively affect the company and/or industry. As the concept, ERM spread it became widely accepted. According to the Embracing ERM, Practical Approaches for Getting Started, many companies thrived from adopting and implementing risk management. It was adopted by many to prevent systematic risk by planning, organizing, and controlling the companies’ activities. The 2013 COSO Enterprise Risk Management – Integrated Framework is not the same as the COSO Internal Control – Integrated Framework. The COSO Internal Control – Integrated

Assessed current state processes and developed solutions and applications that would minimize risks by evaluating entity’s internal control systems

This paper examined the cost-benefit of SOX, looking specifically at the potential for a lower cost of equity as a result of lower information risk. The findings indicate that, after controlling for other risk factors, firms with internal control deficiencies have significantly higher idiosyncratic risk, systematic risk, and cost of equity. Moreover, remediation of internal control deficiencies was found to result in statistically significant and economically important changes to the cost of equity (from 50 to 150 basis points). This study is important to my research since it supports the idea that effective internal controls are valued by the equity market with good reason.

When establishing internal control, it is important to remember the necessary components: control procedures, risk assessment, information system, monitoring of controls and environment (Miller-Nobels, Mattison, & Matsumura, 2016). The control procedures range from hiring trustworthy employees though securing digital information. Risk assessment deals with assessing the company and identifying the risks involved in operating the company. With rapid advancements in technology, information systems must be secured, information being a valuable resource. Monitoring of controls is another component that should not be overlooked. Internal and external audits can help safeguard the company’s assets. Finally, the environment can be thought of as the culture of the company. Top executives leading by example in honesty helps create a fraud resistant culture (Miller-Nobels, Mattison, & Matsumura, 2016).

An overarching process to mitigate risk would be to institute an internal audit process. This role would report to senior management within the company or to the board of directors. The responsibilities would be to evaluate and improve the overall processes, policies and procedures for internal controls and risk management. The auditor(s) would move through each department, request the current policies and procedures, and then review the them for potential vulnerabilities or loop-holes. The audit would continue with reviewing how the policies and procedures are followed by the staff performing those functions. A report would be generated providing objective advice and guidance on risks and issues identified from the review of the policies, procedures, processes, and systems. Internal audit will provide assurance that current operations and management are performing as

The company’s internal control systems and risk management are intended to manage and mitigate the risks rather than eliminate the risk of failure to accomplish business objectives. The systems are designed to provide reasonable guidance and not absolute assurance against material misstatement and loss.

Although they contribute to the implementation of an effective and reliable internal control system, both frameworks are subject to the same general limitations. First of all, they are not able to eliminate every risk, but rather to ensure a reasonable assurance and control over the substantial threats (Romney & Steinbart, 2015). The reason for this is that not all events are under direct control of the company. Moreover, there is always the pitfall of human mistakes and flawed decision-making, especially as the application of the frameworks requires some professional judgement. Lastly, the resources of every organisation are limited and therefore cost-benefit considerations might affect the structure of the internal control system as well. (COSO,

In order to effectively treat risk, firms must first apply a risk management framework and process. The enterprise-wide risk management process provides a broad approach to address and manage all of an organizations risk. Furthermore, this technique is comprised of four components, lead and establish accountability, align and integrate, allocate resources, and communicate and report. When implemented together these components are the essential to achieving an organizations goals. Moreover, five risk management steps reinforce the enterprise-wide framework process and begins with scanning the environment, identifying the risks, analyzing the risks, treating the risk and lastly, monitoring the risks to ensure they are being controlled and eliminated (Elliott, 2012). Banks in particular have a variety of risks which can be addressed using enterprise-wide risk management techniques. For example, ABC Community Bank would be subject to a number of financial risks, including interest rate risk, liquidity risk, credit risk and price risk. With just 30 employees and one location, the organization is small and the company’s ability to absorb financial risks and survive is improbable. Therefore, the organization must take the necessary steps to address the company’s financial risks to ensure continuous survival and goal achievement.

Our experience indicates that organizations achieve results from risk in three interrelated ways. Some companies focus on mitigating overall enterprise risk, while others focus on efficiency, reducing the overall cost of controls. Still others look to create value, often through a combination of

Authors have introduced a country of origin framework which has 3 different dimensions of COO which impacts consumer’s perceptions, those 3 dimensions are called “Affective”, “Normative” and “Cognitive”. This framework was heavily used in modern research of COO effects on brand equity, therefore I will employ elements of this framework in conducting my own research.

The assets of the company need to be protected. In order to do so, the company needs to review for risks. The company needs to develop a plan for what internal control measures they would want to put into place. Internal controls will help guide how we protect our