Risk management is not the responsibility of a single department — it is the responsibility of everyone, from the chief executive down. Past corporate failings have been attributed to lack of accountability, strategy and transparency.
Financial risks have probably never been more acute. Capital reserves, credit portfolios, investment policies and capital and debt profiles all demand constant scrutiny to adequately manage and mitigate risk.
Companies should also be vigilant about risks presented by suppliers. A counterparty who defaults on a contract, or whose business collapses, can have serious financial and reputational ramifications for connected parties.
Fraud risks can also increase when cash is tight. Some employees become more opportunistic — and external hackers more resourceful.
At the same time, many companies are more likely to pursue litigation for losses that they would otherwise endure in more prosperous times. Disputes arise as they seek to apportion blame to other parties for inappropriate or negligent behavior that results in financial or business loss.
With all these demands, internal audit is in many companies often elevated from pure compliance to a function that regularly reviews the risk profile for emerging risks and identifies trends as it keep its finger on the pulse of business performance. The chief risk officer, meanwhile, becomes increasingly involved in strategic decision-making where the emphasis is as much on risk as it is on growth.
Fortify your business. KPMG's professionals provide the experience to help companies stay on track and deal with risks that could unhinge their business survival. We have strong capabilities in:
- EU Advisory and Public Sector
- Accounting advisory services
- Internal Audit
- Sustainability Services
- Financial risk management.
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