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ACC 333 (82)

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ACC 333
Douglas King

Risk ManagementInternal control systems are useful because they identify and correct accountingrelated fraud or errorsHowever internal controls are useless if risks associated with an organizations routine decisions are not monitoredEnterprise risk management ERM focuses on risks to an organizations operations and ensures controls are in place to eliminate mitigate or compensate such risks Additionally ERM identifies and assesses risks related to managements objectives by evaluating internal control components control environment risk assessment control procedures monitoring and information and communication Control EnvironmentAn effective control environment primarily defines organizational structure commitment to competence assignment of authority and responsibility and internal audit functionsControl environments are important any type of risk approach because it establishes organizational tone the foundation of organizational internal control and its response to risk Risk AssessmentRisk assessment is the process used to estimate the likelihood and impact of risks on managements objectivesRisk assessment generally includes riskresponse After potential risks are identified they become part of an organizations risk portfolioRisk response is then used to evaluate correlations and total impact and make changes to optimize the risk portfolioControl ProcedureControl procedures are actions taken by management to eliminate mitigate and compensate for risksThe most frequently used control procedures are performance reviews segregation of duties physical controls and informationprocessing controlsPerformance reviews gives management the o
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