Risk management is no longer just a...

Risk management is no longer just a defensive measure. Implemented in a strict sense sound risk assessments and answers can have a significant impact forward a company's reputation and bottom line, and enhance shareholder value and transparency.

A sample checklist for identifying and assessing risk:

* Establish a process

* What is the organization's tolerance for risk?

* What is the proces for analyzing and responding to risk?

* Strategic risk

* Are the critical strategics appropriate to enable the organization to suited its business objectives?

* What are the risks inherent in those strategies?

* Operational risk

* What are the risks inherent in the processe that have been chosen to implement the organization's strategies?

* Financial risk

* Have operating processe deposit financial resources at undue risk?

* Has the organization incurred unreasonable liabilities to support operating processes?

* Regulatory risk

* What risks are related to compliance with regulations or contractual arrangements?

* Information risk

* Are our information a whole s reliable and secure?

* External risk

* What risks have over and above to develop?

The complete checklist is printed in Risk: From the CEO and Board Perspective, the fourth m KPMG LLP's series in succession business transformation published by McGraw-Hill. The work describes the benefits of effective risk management, explains to what degree to shape an organization's edifice to assess and manage risk in ways that will maximize shareholder value, and advocates the extension of risk management beyond traditional financial and insurable hazards. It includes case studies and interviews with Fortune 500 executives from around the world.

Risk is available at bookstores across Canada and online at www.amazon.ca and www.chapters.indigo.ca.

Mary Pat McCarthy is vice chair of the information, communications, and entertainment practice for KPMG LLP (United States). Timothy P Flynn is the vice chair of audit and risk advisory services for KPMG LLP (US).

Copyright Institute of Chartered Accountants of British Columbia May 2004

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