What are Risk Management and Control? Predicting threats and boosting profit.

Date: 2021/04/12 | By: | In: Uncategorized | Home > What are Risk Management and Control? Predicting threats and boosting profit.

What are Risk Management and Control? Predicting threats and boosting profit.

Ensuring that a company is shielded from vulnerabilities and failures is a way to improve reputation and value comparing with competitors. In this scenario, risk management and internal control emerge as a set of rules, structures, processes and systems to mitigate risks and help companies to reach their objectives. This type of management recognizes opportunities that make it possible to increase the market value and improve infrastructure of a business as a whole.

Risk Management

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    Defined as a set of coordinated activities that prevent and monitor a company against potential threats, Risk Management is closely linked to planning of human and material resources, working preventively or prescriptively.

    In the first category, actions aim to predict and avoid situations that may harm processes; the second group include effective actions to handle threats when they are already materialized. The Risk Management steps include:

    • Organization of the environment
    • Identification of risks
    • Risk measurement
    • Risk response
    • Monitoring of risks

     

    Internal Control

    According to COSO (Committee of Sponsoring Organizations of the Treadway Commission), Internal Control’s scope is providing a degree of reliability for the achievement of strategic objectives, resource effectiveness and efficiency, security of financial data and its fulfillment.

    Based on this list of objectives, companies can define a internal control system with a set of practices that is expected to be adopted by the company’s managers, aligning expectations to achieve the expected results.

    Why are risk management and internal control important for business?

    The answer is not as complex as it appears to be. The union of these two fronts, combined with Identity Governance (link) and access certification (link), brings organizations to a much more secure and manageable level, making operations and processes much more transparent. However, they need to consider that risks may arise even with all these measures.

    Basically, Internal Control provide relative protection for companies to operate with risks at tolerable levels. In order to establish a Internal Control system, companies need to define which risks must be controlled, thus assuring reasonable security in accordance with compliance rules, requirements and laws, and operational effectiveness and efficiency. The benefits of Risk Management and Internal control include:

    • Perpetuation of ethical and integrity values
    • The company’s increased market value due to effective governance
    • Exponential mitigation of unwanted risks
    • Effective and fast management of risks arising as a result of subjects and processes
    • Increased levels of governance
    • Optimization of human and technical resources in the integrated risk management
    • Uniform processes, knowledge exchange and continuous improvement with mapped and formalized processes
    • Decisions based on performance indicators
    • Better defined scope of work for employees based on their activities and the inherent risk management

    These are just some of the positive impacts that Risk Management and Internal Control can bring to your organization. Do you want to know more about our IT solutions tailored for your company? Click here and visit our website.

    CAP2AM is an Identity Governance and Administration (IG&A) solution that establishes an integrated and effective flow among the main corporate systems and resources, ensuring a full synergy among governance, usability, integration and auditing.

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