The management of risk has come a long way in the last 10 years. When the Faculty first wrote a guideline on the topic, the term 'risk management' was still evolving. There was still a narrow perception that risk management either meant insurance or complicated financial instruments. Now terms like enterprise risk management (ERM) are commonplace and the role of the chief risk officer (CRO), while still evolving, has been established.
The demands of additional reporting requirements relating to risk have increased and now include statements in annual reports about risk management and internal controls required by the Combined Code, discussions on risk as a result of the operating and financial review requirements and, for companies affected by US listings, statements about effectiveness of internal controls mandated by S404 of the Sarbanes Oxley Act. Because of this, listed and many other companies are now required to make some formal statement of their risk management procedures.
However, confusion remains on a basic level regarding risk and its role in the organisation. As finance professionals we are involved in risk on many different levels and, being in a central function, often (unknowingly) end up being the central risk manager.
In this special report Judith Shackleton, technical manager of the Faculty of Finance and Management of the ICAEW, offers an update on the basics of risk, before taking a look at some of the current issues in risk management today and concluding with a summary of some of the best resources which the Faculty has found to help you manage risk in your organisation.
Published by the Finance and Management faculty (SR10 - December 2005)
Business resources
Thought leadership, insights, technical resources and professional guidance to support ICAEW members working in industry with their professional development.
Risk management - a guide for finance professionals
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