Risk and Control: Ideas for a better tomorrow
A contrarian view on Risk and Control to make tinkle curiosity leading to creative and critical thinking.
Inventory of contracts is often overlooked area which can give rise to risk to organization. A typical organization with decent size may have the following departments: Sales Department Marketing Department Purchase Department Stores Department Human Resource Payroll Administration Commercial Accounts (This is a very simple list. MIS used by organization would give a clear picture) […]
Continue ReadingRevenue Assurance is becoming a favorite subject of all Internal Audit Professionals. Revenue Assurance is made popular by telecommunication industry due to ever-increasing plans offered to consumers. Revenue Assurance, is being practiced in a different forms by companies for a long time: Lost Sales analysis Opportunity lost Delay in project execution Shipments without order Provision […]
Continue ReadingBusinessdictionary.com defines risk response as “Appropriate steps taken or procedures implemented upon discovery of an unacceptably high degree of exposure to one or more risks. Also called risk treatment.” The purpose of risk response is to bring the risk to the acceptable level of Risk Appetite. Risk response is connected with Risk appetite that in […]
Continue ReadingQuestion 4: Risk Assessment? Organization need to find the factors that are giving rise to risk to the goals of the organization. Risk Assessment comprises of processes for: Identifying Analyzing and Evaluating risks. Risk Identification: Organization can use varieties of techniques for risk identification. These techniques can be used either in isolation or in combinations. Following […]
Continue ReadingBusiness Objectives and strategy drive Risk Appetite. If organization has profitability in mind, they will have low risk appetite. However, if organization will have higher risk appetite if they have market share in mind. Risk appetite can be: 1. A certain number, 10 Lac, 100 crore, etc., 2. Certain ratio (No profit, no loss, till […]
Continue ReadingQuestion 2: What is risk tolerance?Risk tolerance is ability to absorb risk. Risk tolerance is the ability to face/ bear/ absorb the negative side of uncertainty on goals. Investopedia defines Risk tolerance as “The degree of uncertainty that an investor can handle on a negative change in the value of his or her portfolio” ISO […]
Continue ReadingRecently I got the honour of becoming course coordinator for ‘Certificate Course on Enterprise Risk Management’ conducted by Institute of Chartered Accountants of India www.icai.org. This course is spread across 6 week-ends followed by an exam. It is interesting to see that Risk Management is still in infancy and the concept though becoming popular, is […]
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