IFAC Facilitates Global Alignment of Risk Management and Internal Control Guidelines
Vincent Tophoff | November 8, 2013 |
An important driver of business performance, as well as one of the best defenses against business failure, is having effective risk management and internal control. Successful organizations know how to take advantage of opportunities and counter threats through risk management and internal control, thereby improving their performance.
Many standards, guidelines, and resource centers are available to assist professional accountants, and their organizations, to establish more effective risk management and internal control, many of which are referenced in this Global Knowledge Gateway. However, these resources are not aligned with each other. But given that many organizations have international activities, further international alignment of risk management and internal control guidelines would benefit their operations and compliance processes, as determined in the IFAC Risk Management and Internal Control Survey. This would reduce costs and allow for the comparison of these systems across borders and, thus, increase investor confidence.
In many other areas, such as financial reporting or auditing, global convergence has been underway for years. For governance, risk management, and internal control, however, is it still in its infancy. The issuers of standards and guidelines are usually aware of other standards and guidelines, but until recently they had never met each other, let alone discussed global alignment.
IFAC recently had the opportunity to change this and bring some of the most significant global organizations in risk management and internal control standards together. On September 24, IFAC organized the first ever meeting between the various issuers and users of guidelines in risk management and internal control. During the Alignment of International Risk Management Guidelines seminar, representatives from the key organizations presented their latest work and future plans. Participants included:
- Dave Landsittel, Committee of Sponsoring Organizations of the Treadway Commission (COSO)
- Jan Mattingly, International Organization for Standardization (ISO), Technical Committee on Risk Management
- Carol Fox, Risk Management Society
- Julia Graham, Federation of European Risk Management Associations and the International Federation of Risk and Insurance Management Associations
- Gigi Dawe, Canadian Risk Oversight and Governance Board
- Vincent Tophoff, IFAC
Following the presentations, a discussion panel was held that reinforced the need for further international collaboration and alignment. Participants at the event also decided to use the momentum of this meeting to initiate a series of collaboration projects.
While this is clearly just a beginning to further collaboration, it is a solid beginning—and an initiative we will continue to provide updates on.