Defending against Business Failure: Effective Risk Management and Internal Control

J. Stephen McNally, Vincent Tophoff | May 13, 2014 |

Effective risk management and internal control (RM/IC) is an important driver of business performance and one of the best defenses against business failure. Highly successful organizations know how to take advantage of opportunities and counter threats, thereby continually improving their overall performance. Others could leverage RM/IC more effectively than they do today.

Until recently, many organizations were overly focused on a financial reporting controls-based monitoring framework. But the global financial crisis highlighted that many of the most impactful risks stem from external circumstances. Moving forward, risk management and internal control systems should take a wider perspective since organizations exist as part of an open system of dynamic variables.

As a professional accountant, you are likely to be in a position of cross-functional leadership that allows you to plan, implement, execute, evaluate, and improve RM/IC for your organization. Therefore, you should be aware of related developments and emerging trends, as well as recently developed or revised frameworks and guidance that can help accomplish these functions.

With these needs in mind, and based on our participation in the development and revision of the various guidelines, the Institute of Management Accountants (IMA) asked us to provide insight into these new developments, which we did in a presentation at the 2013 IMA Annual Conference & Exposition and in the April 2014 issue of Strategic Finance.

Leveraging Effective Risk Management and Internal Control describes the main features of the most important risk management and internal control guidelines; identifies the primary pitfalls for risk management and internal control; and provides strategies regarding how to avoid or overcome these pitfalls, and otherwise gain insight into improving risk management and internal control in your organization.

We will also be giving a follow-up presentation, “Upgrading Risk Management and Internal Control in Your Organization,” at the 2014 IMA Annual Conference & Exposition in Minneapolis, MN, US, in June 2014. Our presentation this year will provide additional information on risk management and internal control, including a case study and practical examples on how you can upgrade your organization’s risk management and internal control. Among other things, we will discuss:

  • How you can plan and execute the upgrade of your organization’s risk management and internal control in alignment with the relevant standards;
  • How you can perform a baseline study in order to assess the maturity stage and effectiveness of your organization’s risk management and internal control;
  • How you can perform a gap analysis with the most important risk management and internal control guidelines, in particular the revised COSO Internal Control-Integrated Framework, the COSO Enterprise Risk Management Framework, and the International Organization for Standardization (ISO) 31000 Risk Management Standard; and
  • How you can establish a system of ongoing monitoring and review to ensure effectiveness and continuous improvement.

After this session, you will be able to describe the main features of the latest risk management and internal control guidelines and how you can support your organization in upgrading its risk management and internal control in alignment with these guidelines.

We hope to see you in Minneapolis.

J. Stephen McNally

Finance Director and Controller, Campbell Soup Company

J. Stephen McNally is finance director and controller for Campbell Soup Company’s Napoleon & Flavor Operations, including two manufacturing facilities based in Napoleon, Ohio, a spice plant in Milwaukee, Wisconsin, and a network of 45+ third party co-packers, re-packers and warehouse partners throughout the domestic U.S.  Mr. McNally represented the Institute of Management Accountants (IMA) on COSO’s Internal Control Integrated Framework Refresh Project Advisory Council and chaired IMA’s related COSO panel. See more by J. Stephen McNally

Vincent Tophoff

Senior Technical Manager

Vincent Tophoff is senior technical manager with the Professional Accountants in Business (PAIB) Committee of IFAC. Previously, he was a partner at INTE-Q Integration Management, a management accountancy consulting firm in The Netherlands and senior lecturer at the postgraduate accountancy program of the Vrije University in Amsterdam.  See more by Vincent Tophoff

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