risk management. A letter was made to the board for them to explain how the restaurant's risks can be identified, tolerated and managed. In 2007, the restaurant’s management was held accountable for the financial risks that affected the restaurant by a regulatory body calledthe Sarbanes-Oxley Audit Standard 5 (Minsky & Minsky, 2019).Maintaining ineffective forms of risk management concepts is regarded as fraud due itis due to negligence. To stipulate poor risk management for Chipotle, there were instances of failure to disclose quality controls which is a key requirement for the customers as provided by the law. This made the company suffer from a reduced rate of share price by 5%. The company had a wider scope for innovation in its food industry but due to its failure to implement a risk management plan, the innovations fail. At last, the management saw it wise to implement a risk management solution. By thistake, they will prevent food from becoming contaminated since supply chain risks would be identified easily. As well, regulatory penalties would have been avoided if they had the risk management reporting plan, more so, guided risk disclosure and evidenced control activities would as well be enhanced. Therefore, no organization operating in the globe irrespective of the business it carries that should not have a plan for risk management since it prevents lossesfrom occurring and as well ensures appropriate controls for deviations. This proves that Chipotle's case is similar to Intuit's case after the enterprise risk management was introduced since they were all able to control their operations.
Running head: REVIEW ON CHAPTER 12 OF ENTERPRISE RISK MANAGEMENT 4ReferencesINTUIT'S ERM JOURNEY. (2019). Retrieved 25 September 2019, from Minsky, S., & Minsky, S. (2019). Chipotle Case Study: Either Manage Risk or Disclose Lack of Risk Management | ERM Software. Retrieved 25 September 2019, from -management/
You've reached the end of your free preview.
Want to read all 4 pages?
- Fall '19
- Enterprise risk management