Mitigating Risk with Internal Controls
SummaryThis blog takes a look at mitigating risk with internal controls and provides an informational primer on implementation approaches
Risk is exposure to a potential loss as a consequence of uncertainty. There are global risks and risks in every phase and stage of a business process, with certain risks of greater importance during each stage. Understanding the types of risk faced in the within each process sets the foundation for the development of risk-based controls.
All companies, regardless of size, structure, nature, or industry, encounter risks at all levels within their organization. Risks affect each company’s ability to survive, successfully compete within its industry, maintain financial strength and positive public image, and maintain the overall quality of its products, services, and people. Since there is no practical way to reduce risk to zero, management should determine how much risk should be prudently accepted, and strive to maintain risk within acceptable levels by considering the implementation of risk- based controls. Refer to the attachment, “Ten Tips for Implementing Risk-Based Controls,” to get more information on the