Financial Scandals Of Enron, Worldcom, And Tyco Occurred Risk Management

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Risk Management After the major financial scandals of Enron, WorldCom, and Tyco occurred risk management became a high priority for companies. According to Brown, Steen, and Foreman (2009) risk management can be defined as the culture, processes, and structures that are directed towards taking advantage of potential opportunities while managing potential adverse effects” (p.547). To assist companies in the risk management process, companies are incorporating a risk management system, this helps to improve the management and mistreatment of opportunities, helps to improve the development and achievement of companies, improves information handling and communication, assists to enhance a company’s liability, guarantee, and governance, and lastly, it helps to improve a company’s character (Brown, et al. p. 547) Risk management assists companies by concentrating on company objectives by accomplishing activities while being aware of the risks involved. Background Brown et al. (2009), researched risk management after the global financial crisis occurred in 2001 and 2002. The authors found companies during this time had inadequate risk management processes and were all subject to becoming fraud victims (p. 546). Additionally, Brown et al. notes the board of directors and senior management is responsible for the implementation and enactment of risk management. The authors also note the responsibility of the audit committee and how corporate governance can play a role in

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