Navigating Risk with COSO ERM

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Before diving into an audit, it's crucial to identify and categorize risks. A well-executed risk assessment is a cornerstone in understanding the intricacies and needs of the risk assessment process. This precedes the identification and testing of controls to mitigate associated risks.

Risk assessments involve a comprehensive information-gathering process to pinpoint threats and vulnerabilities facing the organization. This includes determining the likelihood and impact of these threats, identifying existing mitigating controls, and designing audit procedures to test the effectiveness of these controls. Throughout this process, we collaborate extensively with the business functions and supporting services being audited.

What Sets Us Apart

At GCSAudit, we excel in considering and understanding the multifaceted layers of technology that underpin business functions. Our personalized approach focuses on your business and the people driving it. We believe in collaborating with various levels of your organization, from staff to management and C-level executives, to ensure risks are accurately identified.

The COSO ERM Framework

The COSO ERM Framework outlines essential enterprise risk management components, discusses key ERM principles and concepts, proposes a common ERM language, and provides clear guidance for enterprise risk management. PricewaterhouseCoopers, engaged by COSO to lead the study, was assisted by an advisory council comprising representatives from the five COSO organizations.

Our Value Delivery

Within the COSO ERM framework, risk assessment follows event identification and precedes risk response. Its purpose is to assess the magnitude of risks, both individually and collectively, to focus management's attention on the most critical threats and opportunities, and to lay the groundwork for risk response. Risk assessment is about measuring and prioritizing risks to ensure risk levels are managed within defined tolerance thresholds, avoiding overcontrol or the sacrifice of desirable opportunities.   

Events that may trigger a risk assessment include the initial establishment of an ERM program, a periodic refresh, the initiation of a new project, a merger, acquisition, divestiture, or a major restructuring. Some risks are dynamic and require ongoing monitoring and assessment, such as certain market and production risks. Other risks are more static and necessitate periodic reassessment, with ongoing monitoring serving as an alert for earlier reassessment if circumstances change.