Corporate Compliance to Risk Management Research Paper

Corporate Compliance to Risk Management - Research Paper Example The framework proposed by COSO helps companies to develop a successful and effective plan which meets the requirements and risk areas stipulated by COSO. The bigger the risk is, the greater is the prospect for gain-and for loss. Risk management plays an important role for a Pre-Paid Phone Cards company allowing management to predict and foresee possible dangers and solutions. Strategic objectives of the risk management plan are to cover all areas of Pre-Paid Phone Cards service and reduce risk situations and their negative impact on the company. Operations objective is to recognize that when a task is being done for the first time, the risk of not achieving budget, schedule, or specification targets is substantial. Also, the nature of new technology is that its development faces more than the usual levels of uncertainty. Reporting objective is to meet the established procedure and report all risk satiations. Compliance objective is to respond effectively to rules and regulations, financial reposting and corporate laws (Broder, 1999). Identify risk. Financial department will routinely scan the organization's internal and external environment to surface risk events that might affect its operations and well-being. Through this process, they develop a good sense of the bad things they might encounter in projects and operations. Examine risk impacts, both qualitative and quantitative. After financial officers develop a sense of the risk events they might encounter in Step 2, systematically determine the consequences associated with their occurrence. Think through hard-to-measure consequences by means of qualitative analysis. Develop risk-handling strategies: Now that financial officers know what risk events they might encounter (Step 2) and the consequences associated with them (Step 3), develop strategies to deal with them. Monitor and control risks. As projects and operations are underway, financial officers need to monitor the organization's disk space to see if untoward events have arisen that need to be handled. If the monitoring effort identifies problems in the process, then steps should be taken to control them.