Enterprise Risk Management - 1609 Words

Abstract This paper discusses how a company can successfully implement the Enterprise Risk Management based on COSO guidelines. This paper discusses a step by step process of the implementation plan at Dell Inc, the responsibilities of the workforce and management, the risk mitigation approach and how to monitor the activities successfully. Enterprise Risk Management In the wake of all the financial scandals, a variety of laws and regulations have been passed which makes the board of directors solely responsible for the financial results of their company. Sarbanes Oxley Act of 2002 was one of them, but this covers only a part of the total risks that a company faces. A much wider range like strategic, operational and hazardous risks†¦show more content†¦The company can prioritize risks according to their importance. Those risks that can threaten the shareholder value can be assigned a higher rating. At present, the main risk facing Dell Computers is the risk of revenue loss due to increase in competition. Dell was a market leader in their industry. But the competitors have improved their sales and marketing techniques. They also offer competitive pricing. Another risk the company recently faced was the risk of non-compliance with the Sarbanes Oxley Act of 2002. Due to SEC allegations, Dell Inc conducted an internal investigation of their accounting practices. The investigation identified several accounting errors and showed evidence of misconduct. Dell falsely reported some of the earnings to make the company more attractive to investors. It was also clear that the internal control of the company was weak and needed some attention. Due to this issue, the company had to reinstate some of their financial statements from prior years. So the main goal of this program should be to identify the most important risks that can threaten the shareholder investments and take appropriate actions before it gets out of control. Risks can be integrated using ‘Risk Map , which shows the risk on the basis of frequency and severity (casact, 2003). By prioritizing risks according to their frequency and severity, the company can concentrate on the most important risks and take stepsShow MoreRelatedRiordan Enterprise Risk Management Plan1294 Words   |  6 PagesGeorgia, Michigan, and China. Their products include beverage container s, plastic fan parts, and custom plastic parts. Riordan prides themselves on their industry leading research and development (University of Phoenix, 2009). The following Enterprise Risk Management (ERM) plan was developed for Riordan Industries, Inc. and its subsidiaries. The goal of this plan is to help mitigate any legal liability on the part of Riordan by implementing the Committee of Sponsoring Organizations of the Treadway CommissionRead MoreA Research On Enterprise Risk Management Essay1909 Words   |  8 Pagespresident, Theodore Roosevelt, said, â€Å"Risk is like fire: If controlled it will help you; if uncontrolled it will rise up and destroy you.† This comparison of fire and risk remains true for political means but also the everyday operations of any company. A company is confronted with decisions demanding the assessment of risk every day. Enterprise risk management is a framework for handling the assessment of risk that companies may encounter. The enterprise risk management process is a formula for employeesRead MoreEnterprise Risk Management3381 Words   |  14 PagesEnterprise Risk Management In the 21st Century, the news of corporate scandals involving corruption enormously spread across not only the country but across the globe also. 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Enterprise Risk Management (ERM) is designed and disciplined approach to deal with strategy, processes, people, technology and knowledge by the motive of evaluation of management of uncertainties which are faced by the enterprises and generatesRead MoreEnterprise Risk Management ( Erm )1741 Words   |  7 Pages Introduction âž ¢ What is Enterprise Risk Management (ERM)? Enterprise Risk Management (ERM) is process of planning, organizing, leading, and controlling the activities of an organization in order to minimize the effect of risk on an organizations capital and earnings. ERM expands the process to include not just risks associated with accidental losses, but also financial, strategic, operational, and other risks. âž ¢ Benefits of Enterprise Risk Management In Finance †¢ Financial IncentivesRead MoreEnterprise Risk Management ( Erm )1166 Words   |  5 PagesLiterature Review Enterprise Risk Management (ERM) In light of the fraud scandals that took place in 2001 and 2002 companies all over the world have been introduced to a new system to help incorporate corporate governance, risk management, and the requirements made by the SOX. That new system is known as Enterprise Risk Management (ERM). The ERM system has been suggested to be the new system to help companies predict risk and help achieve their overall objectives (Arena, Arnaboldi, Azzone, 2011)Read MoreThe Ethics Of Enterprise Risk Management818 Words   |  4 Pages â€Å"Enterprise risk management views all risks to the firm as subject to management and control† (Fraser Simkins, 2010, p. 351). As we have learned, Enterprise Risk Management has three primary principles, which are: ensure organizational survival, provide social responsibility, and increase the organization’s value, while engaging employees in performance and maintaining their well-being (Bethel, 2016). In its simplest terms, legal risk equates to financial loss (Smith, 2008). In researching