Workplace Solutions - Internal Risk Reviews

INTERNAL RISK... NOT JUST FOR AUDITORS ANYMORE!!

To most managers the belief is that Risk Management is a credit or interest rate issue or it is an origination issue when loans are kicked out of trades. But rarely is there any thought given to the risks that exist within the internal operating environment of the organization. Those issues most frequently come to light when auditors, whether they be internal or external, point them out. Often that is too late, the damage is done, financial resources must be spent to clean-up the problems and once completed, the method for finding these problems leave with the auditors.

However, these risks don?t go away. Many times clients have stated how frustrated they are that they seem to be spending valuable resources on fixing the same problem over and over again. Why don?t they know when these same problems are starting to occur so that they can be fixed quickly? Why are they always getting nasty surprises when they thought the issues were under control?

Using Risk Management as way to identify and prevent these risks from causing unexpected problems and costs is the best way to answer these questions. An internal risk review program puts the accountability for these problems right where it belongs, in the hands of the managers. Reporting results to the senior management team gives them an on-going understanding of how well these risks are being managed BEFORE they become an expensive problem.

rjbWalzak Consulting?s approach to Internal Risk Reviews is focused on assisting managers in identifying these risks, understanding what controls they have in place, determining whether these controls are effective and prioritizing the risks based on the likelihood of them occurring and the impact if they do. Once this self-examination is completed, the results can be used as a template for managing these risks on an on-going basis. To complete the process, we will work with senior management to identify which risks are the most meaningful to them in understanding the overall risk profile of the organization.

Once developed, these indicators can prevent nasty surprises as well as become focal points for improvements or change. Ultimately, risks and costs can be reduced. Opportunities can be incorporated and you can TURN RISK INTO REWARD.