In the light of the current global financial crisis, we discuss the need for appropriate risk management, planning, and control and the need for companies to reassess their governance structure to ensure adequate risk management. As we write international debt markets are paralyzed, increasing the reliance on equity as a source of finance. If this greater reliance on equity finance is to persist for some time, as appears likely, the use of appropriate risk-focused governance mechanisms is more critical than ever. The increased reliance on equity funding, particularly in the current global climate, leaves investors in these firms deprived of the rigorous protections included in most debt contracts.
a. Explain the potential benefits of integrating compliance and governance with risk management.
b. Compute the three most common risk management process assurance audit formats.
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