Mike Ella, CPA, CA, was recently published on the Business Journals network for his article, Understanding the Risks of the Business.
All businesses have risks. Identifying them, ranking them and putting plans into place to lower them are crucial steps in the drive to maximize a company’s potential value. Enterprise risk management is a formal process of doing just that—evaluating business risks. Both business owners and management should be involved with interpreting the business risks as part of the enterprise risk management process—this allows more insight from employees who are involved in the day-to-day operations.
This article summarizes each step in the enterprise risk management process, from identifying risks at the outset, to ranking them and ultimately, putting plans into place to lower risk levels. Finally, the article underscores the importance of annual business risk reviews, which are used to consistently evaluate existing risks, and identify new risks. To read the full article, click here.