What is business risk management?
Business risk management, also called ERM, is a concept that has a relatively simple definition and a much more complicated implementation. It is a business financial term described by risk management methods - risk identification and opportunine - within the company. This concept is wide and can be quite complex for large companies. Before the Sarbanes-Oxley law in the United States and later the International Risk Management Standard (ISO 31000), business risk management was largely optional, and although many businesses used risk management strategies, instructions were much more vague. Aspects of business risk management may include identifying business objectives and creating a strategic plan to achieve them; Assessing how likely it is to succeed in the plan or part of the plan; and creating a plan of response and progress evaluation.
Strategic planning can be a definition as formulation and implementationThe plan of the whole organization that allows those who are in it to take decisions that focus only on achieving the goals of set organizations. In business, risks must usually be subjected to achieve maximum achievement of the goals set by the company. Management of business risks is how businesses and organizations control these risks. Part of the risk on the occasion is to know that they may not pay off; The whole invested time, money and resources could be lost. For example, the Sarbanes-Oxley law introduces audit laws so that companies can keep in mind what an acceptable level of risk is. The aim of the audit laws is to protect the parties to the parties and to ensure that corruption in the organization can be stopped from the cause of irreparable harm.
Some examples of common types of risks that the company may face includes loan, insurance, legal, accounting, audit, quality and other types of risk. Sarbazakon o nes-oxley requires US companies to have a SPR management systemIkian risks and therefore frames were created. The two main frameworks in the United States were compiled by Officeta -Mytuarial Society (CAS) and a committee of sponsoring organizations (COSO). The COSO frame is more often accepted. It states that business risk management is an internal control process that the whole society must share and that people in society must know their acceptable level of risk. The outline of CAS is more focused on the risk management so that the value of the company is increased by its stakeholders. Through many aversion events that occur in the business world, legislators and entrepreneurs have also been aware that the system of business risks management, which includes all departments of the organization, is the best way to protect the parties and thus protect themselves.