Operational Risks Identification of Fattening Company Business: Enterprise Risk Management (ERM) Approach

Operational risk is defined as the potential losses resulting from events caused by inadequate or failed processes, people, equipment, and systems or from external events. One of the most important challenges for the management of the company is to improve its results through its operational risk identification and evaluation. Most of Enterprise Risk Management (ERM) scholarship has roots in the finance/risk management and insurance (RMI) discipline, mainly in the banking sector. This study proposes an innovative operational risk assessment methodology (OpRAM), to evaluate operational risks focused on telecommunications companies (TELCOs), on the basis of an operational risk self-assessment (OpRSA) process and method. The OpRSA process evaluates operational risks through a quantitative analysis of estimates which inputs are the economic impact and the probability of occurrence of events. The OpRSA method is the “engine” for calculating the economic risk impact, applying actuarial techniques, which allow estimation of unexpected losses and expected losses distributions in a TELCO. The results of the analyzed business unit in the field work were compared with standardized ratings (acceptable, manageable, critical, or catastrophic), and contrasted against the company’s managers, proving that the OpRSA framework is a reliable and useful management tool for the business, and leading to more research in other sectors where operational risk management is key for the company success.

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Management Accounting And Risk Management Practices In Financial Institutions

Jurnal Teknologi ◽

10.11113/jt.v51.159 ◽

2012 ◽

Author(s):

Siti Zaleha Abdul Rasid ◽

Abdul Rahim Abdul Rahman

Keyword(s):

Risk Management ◽

Financial Institutions ◽

Management Practices ◽

Management Accounting ◽

Enterprise Risk Management ◽

Chief Financial Officers ◽

Operational Risks ◽

Enterprise Risk ◽

Budgetary Control ◽

Contemporary Management

Tujuan kertas kerja ini adalah untuk melaporkan hasil kajian terhadap amalan perakaunan pengurusan dan amalan pengurusan risiko di institusi kewangan. Data dikutip menggunakan borang soal selidik yang dihantar kepada 106 institusi kewangan yang tersenarai di dalam website Bank Negara Malaysia, di mana Ketua Pegawai Kewangan atau pegawai terkanan di jabatan kewangan institusi–institusi tersebut dilantik sebagai responden kajian. Analisis amalan perakaunan pengurusan berdasarkan kerangka IFAC (1998) menunjukkan bahawa amalan yang lazim diguna pakai adalah amalan di peringkat pertama, diikuti dengan amalan selepas era 1995. Dapatan ini menunjukkan bahawa amalan perakaunan pengurusan tradisional masih diguna pakai secara meluas oleh institutsi-institusi kewangan di Malaysia walapun amalan–amalan kontemporari (peringkat ke 4 dan ke atas) telah diperkenalkan. Bagi amalan pengurusan risiko, kebanyakan institusi telah melaksanakan kerangka Enterprise Risk Management (ERM) secara menyeluruh atau sebahagian. Amalan perakaunan pengurusan berkaitan penyata kewangan dan analisis nisbah dianggap sebagai memberikan sumbangan utama kepada pengurusan risiko. Kawalan belanjawan, belanjawan dan pengurusan strategik juga dianggap penting dalam pengurusan risiko operasi. Kata kunci: Perakaunan pengurusan; pengurusan risiko; institusi kewangan The aim of this paper is to report the results of a study on management accounting and risk management practices in financial institutions. The research method involved administering a questionnaire to 106 financial institutions listed on the Malaysian Central Bank’s website and the respondents were the chief financial officers (CFO) or the most senior positions in the finance department of the institutions. Based on the IFAC’s (1998) framework, it was found that the most widely practiced were the management accounting practices at Stage 1, followed by practices of Post 1995. This finding shows that despite the emergence of contemporary management accounting practices (Stage 4 onwards), traditional management accounting that focuses on financial performance and budgetary control is still widely practiced by financial institutions in Malaysia. As for the risk management practices, most of the firms have either implemented a complete or partial Enterprise Risk Management (ERM) framework. The findings from the survey showed that management accounting practices related to financial statement and ratio analysis were perceived to contribute most towards risk management. Budgetary control, budgeting and strategic planning were also perceived to be important in managing operational risks. Key words: Management accounting; risk management; financial institutions

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Operational Risk Assessment of an English Academy in Yogyakarta

Jurnal Entrepreneur dan Entrepreneurship ◽

10.37715/jee.v9i2.1442 ◽

2020 ◽

Vol 9 (2) ◽

pp. 5-12

Author(s):

Anastasia Filiana Ismawati

Keyword(s):

Risk Assessment ◽

Risk Management ◽

Data Analysis ◽

Operational Risk ◽

Enterprise Risk Management ◽

Operational Risks ◽

Long Run ◽

Enterprise Risk ◽

Operational Activities

This research was conducted for the risk assessment on the operational activities in order to assist PT. XYZ in managing the operational activities which leads to the goals of the firm. The use of Enterprise Risk Management (ERM) can help the organization to manage the risks holistically using the intergrated methods. This research focused on the risk assessment in PT. XYZ, especially for its operating, and provided a strategy of improvement from the existing risks. The methodology used in this research is a case study with triangulation of sources as the tool to conduct the data analysis. The informants of this research are the Operational Manager of PT. XYZ and five teachers. The data was obtained by conducting interviews and there were six operational risks found which would be best to respond and to manage as soon as possible for minimizing the risks. The result of this research is to hope that PT. XYZ shall be able to manage the risks by using the ERM methodology in order to have the business in the long run and to be successfully competing in the market.

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Features of enterprise risk management associated with operational risks

Revista Amazonia Investiga ◽

10.34069/ai/2021.46.10.1 ◽

2021 ◽

Vol 10 (46) ◽

pp. 9-19

Author(s):

Andrey S. Boyar-Sozonovitch ◽

Alexey Yu. Buikin ◽

Kirill V. Pitelinskiy

Keyword(s):

Risk Management ◽

Business Processes ◽

Enterprise Risk Management ◽

Classification Systems ◽

Corporate Risk Management ◽

Economic Relations ◽

Operational Risks ◽

Sufficient Detail ◽

Enterprise Risk ◽

Corporate Risk

Purpose of the work: within the framework of the concept of corporate risk management Enterprise Risk Management (ERM) to study the basic types of risks, assess their role in the modern economy, analyze external and internal operational risks and propose approaches to their quantitative assessment. As a research methodology, it is proposed to use the developed tools of mathematical and numerical modeling, which allows one to obtain, in the key of interest to the decision maker, qualitative and quantitative characteristics of the dynamics of business processes. The operational and economic risks (as very often occurring in the activities of subjects of economic relations) and directly affecting their economic and information security are considered in sufficient detail. It is noted that the risks associated with disruption of business continuity (which enterprises face in their activities) can be included in various classification systems of risks, grouped according to various criteria. The need to identify the mismatch between the design and actual metrics of the organizational structure (establishment of its structure and operating schemes based on the needs of the enterprise/organization) is indicated for solving the optimization problem.

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Decentralized Enterprise Risk Management Issues under Rapidly Changing Environments

Risks ◽

10.3390/risks9090165 ◽

2021 ◽

Vol 9 (9) ◽

pp. 165

Author(s):

Levente Bakos ◽

Dănuț Dumitru Dumitrașcu

Keyword(s):

Risk Management ◽

Risk Identification ◽

Enterprise Risk Management ◽

Theory And Practice ◽

Changing Environments ◽

Operational Risks ◽

Multidisciplinary Cooperation ◽

Single Person ◽

Enterprise Risk ◽

Management Techniques

Under the growing complexity of manufacturing processes, supply chains, markets and stakeholder expectations, enterprise risk management (ERM) has become an extremely important, probably yet still underdeveloped, management function. Enterprise risk management theory and practice should keep pace with the changes of rapidly changing environments, through new, more adaptive approaches. The article presents some of the results of a longitudinal survey at Eastern-European manufacturing organizations made on risk management techniques. The goal of the research was the study of risk management techniques under rapidly changing environments in highly standardized industries (pharmaceutical and automotive). The research was focused on the role of human resources in handling technology-related/operational risks and to what extent a decentralized risk management is present. Multidisciplinary cooperation, the selection of the teams, communication and the decision making within the team was analysed. During our research few common risk analysis routines were identified at the studied organizations. Through an interview-based qualitative survey, possible weaknesses of common risk identification techniques were identified. The article presents three risk evaluation methods with the same features. The answers provided during the interviews indicate that risk assessment techniques are mostly centralized (coordinated by a single person/unit), linear (based on If-Then construct) and rigid, definitively not suitable when quick changes are in the organization environment.

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Operational Risk Analysis Based on Enterprise Risk Management Approach (ERM) in Export Document Service Company (Case Study at CV Tarukalpa Dewata)

Journal of Applied Sciences in Accounting, Finance and Tax ◽

10.31940/jasafint.v4i2.127-136 ◽

2021 ◽

Vol 4 (2) ◽

pp. 127-136

Author(s):

Ni Luh Gede Intan Diana Wahyuni ◽

◽

I Made Sudana ◽

P Dyah Hudiananingsih ◽

◽

...

Keyword(s):

Risk Management ◽

Enterprise Risk Management ◽

Management Approach ◽

Operational Risks ◽

Enterprise Risk ◽

Impact Risk ◽

Qualitative Descriptive ◽

Operational Activities ◽

Technological Constraints ◽

The Impact

Every company in carrying out its operational activities will definitely face a risk. The various possible risks that can be experienced by the company in carrying out its operational activities need to be managed and controlled by carried out risk management. The implementation of risk management is expected to assist companies in identified, analyzed, assessed, and controlled risks and the impact of risks. One approach that can be used to perform risk management is Enterprise Risk Management (ERM). This research aims to analyze operational risks that occurred at CV Tarukalpa Dewata based on an Enterprise Risk Management (ERM) approach by identified risks, risk assessments, efforts to respond the risks and carry out risk controls to find out what actions must be taken to minimize the possibility of risks and impact risk. This research used a qualitative descriptive research method by collecting data through interviews, observations and questionnaires. The results showed that in the operational activities of CV Tarukalpa Dewata there were seventeen possible risks consisting of four risks originating from human resources owned by the company, five risks that occurred in the process of making export documents, two risks that occurred due to technological constraints, and six external risks. The results of the risk assessment showed that there were three levels of risk that occurred in the operational activities of CV Tarukalpa Dewata namely moderate, low, and very low. Responses to existing risks are carried out by monitoring, controlling management, and paying special attention (urgent) in the company's operational activities.

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Financial Enterprise Risk Management

10.1017/cbo9780511844133 ◽

2009 ◽

Cited By ~ 17

Author(s):

Paul Sweeting

Keyword(s):

Risk Management ◽

Enterprise Risk Management ◽

Enterprise Risk

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Effect of Enterprise Risk Management on Firm Value: Empirical Evidence from Non-Financial Firms in Pakistan

GIS Business ◽

10.26643/gis.v13i2.3298 ◽

1970 ◽

Vol 13 (2) ◽

pp. 15-28

Author(s):

Nouman Nasir

Keyword(s):

Risk Management ◽

Firm Value ◽

Positive Impact ◽

Stock Exchange ◽

Enterprise Risk Management ◽

Least Square ◽

Return On Equity ◽

Financial Firms ◽

Enterprise Risk ◽

Ordinary Least Square Regression

This research examines the effect of enterprise risk management on firm value in Pakistan. Further, this study empirically examines company characteristics that establish the execution of an enterprise risk management system. Using a sample of final dataset of 83 non-financial firms located in Pakistan. The sample included non-financial firms from the year 1999 to 2015 and so up to seventeen observation years per company. As in context of Pakistan, most of the organizations are already implement an ERM programs and establish specialized ERM departments because the ERM is now a global term and has become increasingly relevant because of the growing difficulty of risk and an additional development of regulatory frame works. For the empirical evidences, data collected from non-financial firms listed at the Pakistan Stock Exchange (PSX). Results of logistic regression shows that Capital Opacity, Profitability, Financial Leverage, Firm Size and Slack have positive impact on the implementation of an ERM system but Industrial diversification, Industry and Return on Equity are negatively related to an ERM engagement. The results of ordinary least square regression finds positive relationship between use of an ERM and firm value.

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MODELLING AND CONTROLLING THE ENTERPRISE RISKS COMPLEX ASSESSMENT SYSTEMON THE BASIS OF RUSSIAN STATE STANDARD ISO 9001-2015 CONCERNING RISK-ORIENTED THINKING. GENERAL PROBLEMS AND WAYS OF SOLVING THEM

Automation and modeling in design and management of ◽

10.30987/2658-6436-2020-2-33-41 ◽

2020 ◽

Vol 2020 (2) ◽

pp. 33-41

Author(s):

Irina Merzlyakova ◽

Aleksandr Feofanov

Keyword(s):

Risk Assessment ◽

Risk Management ◽

State Standard ◽

Control Model ◽

Enterprise Risk Management ◽

Iso 9001 ◽

Management Procedure ◽

Russian State Standard ◽

Russian State ◽

Enterprise Risk

The article considers general problems of implementing the enterprise risk management procedure. One of the ways to solve the problems arising when meeting Russian state standard ISO 9001-2015 requirements concerning risk-oriented thinking is presented. A risk assessment control model aimed at coordinating all kinds of the enterprise departments activities, forming a clear algorithm of risk management procedure implementation and attracting a greater number of employees towards this activity is offered.

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