Risk Management In Business

Today’s business setting is changing, and fraudulent practices are evolving with it. Businesses can profit from applying an all-inclusive fraud framework constantly innovating in fraud management strategies. Accepting the nature of the organization’s intentions and the types of possible risks under consideration is vital to determining the scope of the risk assessment. Risk assessment should not be a mere checklist or a separate process from the decision making of a business. It should be an integral part in business process to provide management with prompt and relevant risk information. It should be a continuous process that is owned and embedded in the business cycles from strategic planning to business process and execution and finally

It the height of the financial crisis businesses with risk-focused cultures, leadership, and organizational structures were seen to have outperformed their peers in surviving the crisis (PwC, 2011a). The first step is to assess the company’s culture, unambiguously defining the business ethics and actions. For risk management to be effective there must be a corporate culture that seeks to motivate, promote and support the policies and procedures of risk management to avoid the long term and far reaching effect that results from loss of fraudulent activities. An aspect of building an effective risk management is to put in place sufficient governance that details the organizational structure, roles and responsibilities as well as policies and procedures (PwC, 2011). In addition, the culture should be supported by a system of values and incentives–including tone at the top, talent, and compensation (Vona, 2008 pp. 38-39). To ensure this culture is established, businesses can gather anonymous feedback from large group of people simultaneously that can highlight critical insight into ethical culture. This can help to quantify the internal impact of the fraud and ethical risk management. The survey for feedback can be designed around awareness of relevant policies and follow-through, issues

An important link that acts like an adhesive to a strong anti-fraud programme is timely internal communication. Companies should collect and share information regarding prevention, detection, investigation and remediation of fraud, corruption and misconduct, identified risks, strengths and weaknesses of anti-fraud control activities, allegations of misconduct and remediation efforts (PwC India, 2011). These are aided by current development in technology. Relevant business data is available and analyzed through common support tools to analyze the impacts of key business decisions and enhance decision making outcomes. Highly advanced technological and data analysis tool may be required to effectively achieve the fraud risk management goals of the entity. Most times, simple technology of rule-based solutions may not be sufficient to help entities achieve fraud risk management goals. Identifying the specific fraud related issues in a company can help in focusing the efforts on identifying and implementing a tailored technology solution. This is vital as retailers normally operate in an environment that is rich in data such as data from daily transactions and activities in accounts payable, sales projections, purchasing, warehouse movement, POS, employee shift records, returns and store-level video and audio