Enterprise Risk Management

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).

Enterprise risk management is a technique used by organizations to manage risks that have the potential to affect the company, both positively and negatively, altering

The ERM process applies to hazard, operational, financial and strategic risks throughout the community bank. The model involves five steps: scan environment, identify risks, analyze risks, treat risks, and monitor and assure. As CRO, he/she communicates and coordinates the risk management program to all thirty employees, establishing a holistic approach. Using the ERM process, five

ERM is applied every level and unit across the company and consider the risk at entity level;

With ERM, participants are given clear instructions on the kind of information needed, making sure everyone understands the parameters for key risk, risk categories, and scoring standards. Each participant is asked to identify key risks to Anthem (in this case, IT), the most likely worst case scenario if the risk occurred, and a score of how severe each occurrence would be for that scenario (Rosenblatt & Segal,

Risk refers to a likelihood, probability, a chance that a loss may occur in a given organization. Most of the times, there is a high risk when there is vulnerability. In this case, vulnerability refers to a weakness that the organization has. Risk assessment refers to the process of identification of potential hazards and proper analysis of the expected losses if those hazards occur (Homeland Security, n.d.). Risk assessment as a way of profiling risk according to impact to the organization. Some organizations have business impact analysis exercises geared towards determination of potential hazards based risk assessment approaches. Organizations’ risk differ depending on the size and the type of business they are doing. The disparity in organizations’ risk call for different adaptation of risk assessment approaches. Even with the disparities of the businesses, proper risk management not only ranks the risks according to the seriousness but also identifies the best methods to control risks in an organization.

Background- In its most basic sense, risk management identifies, allows assessment, and prioritizes risks that are associated and central to an individual project or organization. Risk management allows the organization to be proactive in preventing or mitigating risks, for improving certain processes within the organization, and with the hope of preventing fiscal exposure. However, in almost every organization there are risks individuals are unique and do not always perform at a high level of safety; mechanical or design failures exist, construction projects have supply or labor issues, there are uncertainties in computer or data modification, of course natural disasters, and even deliberate attacks from competitors, etc. Because this is such a common occurrence, national and even international standards have been developed in conjunction with the insurance and regulatory institutions to at least provide basic guidelines to minimize risks risk (International Organization for Standardization, 2009).

“Enterprise risk management (ERM) is the process of planning, organizing, leading, and controlling the activities of an organization in order to minimize the effects of an organizations capital and earnings.” (ERM2007-2018) There are differences in the way a healthcare organization might use Enterprise risk management compared to a non-healthcare organization. For instance in healthcare a ERM program could help the healthcare leaders focus on better management of patients safety risks as well as business risks and, in turn, it could increase value of the organization. It could help prevent financial loss or could aide that organization in the investment to expand the services offered by the health-care organization.

3.2.2. Assess risks: After the organization’s has identified the risks then likelihood of their occurrence is determined then multiplied by their influence on the organization's operations The team must develop an understanding of the nature of the risk and its potential to affect organization’s goals. The step assist in decision making thus to avoid spending too much money and time reducing risks that may pose little or no threat to organization.

According to COSO "support from the board of directors and senior management is need to get the right focus, resources and attention for ERM" The entire corporation from top to bottom must view risk management as a critical and strategic step towards prosperity. And even though it is not the job of the directors to implement or be a part of risk management activities, they demonstrate clear support for ERM measures. It is up to top management to ensure that the resources are available, the focus is clear and the tone is positive and motivating.

While it lessens the burden on organizations, reducing and shifting the cost and risk of its IT operation, security and management issues to an external service provider or vendor, outsourcing any portions of an organization's Information System has significant risks that can sometimes become detrimental to the outsourced organization. According to the Commission on Government Outsourcing, "when outsourcing an organization exposes itself to significant risks in terms of security, accuracy, and completeness of information (Holroyd City Council, 2008)". Comprised in the rest of this document is an

Enterprises are exposed to various risks that decrease the chances of achieving their business goals both internally and externally. Internally, there are company politics and mismanagement. Externally, factors such as economic environment, regulations and technology influence risks. It is important for an enterprise to build framework for good risk management, which is “the process of identification, analysis and either acceptance or mitigation of uncertainty in investment decision-making.” (Investopedia, “Risk Management”) This paper is on a widely-accepted enterprise risk management framework created by Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2004 and its impact on Accounting Information System (AIS).

*Nonetheless, in order to provide a structure for risk analysis, and to help with the allocation of the responsibility for managing the different types of risk, risks need to be categorized properly. In a manufacturing company the individual perspective of a risk management program would be to minimize injury to staff, to customers, or the local community. Otherwise, the focus may be on the financial risks, which is an important part of the business or the impact on shareholder financial returns. Many manufacturing businesses are motivated on keeping a good reputation, and any potential damage to the business reputation could have a long term effects, therefore, the risks could impact on the reputation of the organization which will need to be identified and controls implemented to reduce the potential risks. When a manufacturing business wants to understand and control their risks, every manufacturing process there will be a need for a

Unfortunately, scandals like Enron are not isolated incidents and the last decade has offered Americans a disheartening perspective with comparable scandals like that of WorldCom and Tyco, Sunbeam, Global Crossing and many more. Companies have a concrete responsibility not just to their investors but to society as a whole to have practices which deter corporate greed and looting and which actively and effectively work to prevent such things from happening. This

One well accepted description of risk management is the following: risk management is a systematic approach to setting the best course of action under uncertainty by identifying, assessing, understanding, acting on and communicating risk issues. In order to apply risk management effectively, it is vital that a risk management culture be developed. The risk management culture supports the overall vision, mission and objectives of an organization. Limits and boundaries are established and communicated concerning what are acceptable risk practices and outcomes. Since risk management is directed at uncertainty related to future events and outcomes, it is