University of Phoenix Online
David Weischadle, II
May 15, 2008
Corporate Compliance Report
Enterprise risk is part of every organization whether small or large. Every corporation needs to have a plan that justifies financial records. Enterprise risk has to do with internal controls and making sure organizations follow the rules. An enterprise risk management program is to provide senior management with an understanding of the key business risks and associated risk management practices (Ahold, 2007). 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 risk on an organization's capital and earnings. Enterprise risk management expands the process to include not just risks associated with accidental losses, but also financial, strategic, operational, and other risks (SearchCIO, 2007). External factors have fueled a heightened interest by organizations in ERM. Industry and government regulatory bodies, as well as investors, have begun to scrutinize companies' risk-management policies and procedures. In an increasing number of industries, boards of directors are required to review and report on the adequacy of risk-management processes in the organizations they administer (SearchCIO, 2007).
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) has formulated Enterprise Risk Management – Integrated Framework which expands on internal control, providing a more robust and extensive focus on the broader subject of enterprise risk management. While it is not intended to and does not replace the internal control framework, but rather incorporates the internal control framework within it, companies may decide to look to this enterprise risk management framework both to satisfy their internal control needs and to move toward a fuller risk management process. (Flaherty... [continues]
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