Financial Risk

Jan 3, 2011

Impact of Risk Management Failures on the Financial Crisis

A report released by The Financial Crisis Inquiry Commission presents findings and conclusions related to the causes of the 2008-2010 financial and economic crisis in the United States. Failures of corporate governance and risk management at many systemically important financial institutions are among key causes of the crisis, as concluded by the Commission.

May 3, 2010

COSO Fraud Study 2010

The Committee of Sponsoring Organizations of the Treadway Commission (commonly known as COSO) has released the study, Fraudulent Financial Reporting: 1998-2007, An Analysis of U.S. Public Companies, that examines financial statement fraud allegations investigated by the U.S. Securities and Exchange Commission over a ten-year period. The study provides an in-depth analysis of the nature, extent, and characteristics of accounting frauds and provides helpful insights regarding new and ongoing issues that need to be addressed. The study examines nearly 350 alleged accounting fraud cases investigated by the SEC during the period, 1998-2007. Mark Beasley, Deloitte Professor of Enterprise Risk Management at NC State is one of the study's co-authors.

Mar 1, 2009

Ten Practical Lessons for Risk Management

Recent events have uncovered significant deficiencies in the way risks are managed at financial institutions and many other companies. Research into these deficiencies shows ten practical lessons companies can apply to address current weaknesses and strengthen risk management systems. By wielding appropriate authority, gaining support from senior management, and thoroughly examining the models and incentive systems used, risk managers can greatly improve companies' risk management systems.

Jan 1, 2009

Limitations of Traditional Risk Models in Forecasting Risk

The current economic crisis has upset many common assumptions about the global financial system and shaken investor confidence. While there are unique aspects to this crisis, it is important to understand that severe economic crises in general are not rare events. Traditional methods of modeling risk often fail to reflect the frequency of declines and when these declines will occur. It is important for investors to rely on more than the output from traditional risk models in assessing the potential risk associated with investments.

Apr 1, 2007

Integrating SOX and ERM- Truths and Myths

For most organizations, the efforts being made to meet compliance regulations are not tied to current ERM processes. Procedures should be put in place to integrate compliance functionality into existing risk management plans.

Sep 30, 2005

Evolution of ERM

Business professionals have varied personal definitions of enterprise risk management (ERM) based on their limited exposure to the new idea and their specific encounters with its effects given their roles within their companies. However, in order to better understand risk management, and especially ERM, risk itself must be better understood with greater uniformity than that with which it has been understood in the past. Misconceptions have kept business professionals from understanding risk as measurable in both negative and positive outcomes, as existent even without the occurrence of an event, and as affective of businesses in many areas, not just in the consideration of insurance.

Sep 1, 2005

Best Practices for Structuring ERM Within the Organization

In order for the risk management division to function properly, it is essential to structure it properly within the firm. The risk management division should be placed in high stature within the firm and should report directly to the CEO. Risk managers should have a deep understanding of the company's business in order to effectively communicate with risk takers in the firm. Structuring the risk management division properly will ensure a more holistic view of risk within the organization.

May 1, 2005

Role of the Chief Risk Officer

The Chief Risk Officer (CRO) is rapidly becoming one of the most crucial members of the management team. CROs are involved with managing many types of risks faced by a business including regulatory risks, product development risks, and strategic risks.