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The
Way We Think About Controls
- The primary
focus of control should be to help people be successful in accomplishing
their business objectives. Compliance with external control
requirements should be a natural byproduct of the way we do business.
- Business
is the art of taking risk. No amount of control can eliminate
all risks!
- Because
of the constantly changing business environment, things will go wrong.
- Controls
simply manage risk to within the risk tolerance (limits) that Governance
is prepared to accept.
- Statements
about “control adequacy” in isolation of the business risk,
in isolation of how much risk we are prepared to take (limits), in isolation
of our business objectives are theoretically invalid and lead to distorted
thinking and excessive cost.
- Auditors
do NOT determine how much risk a company can take. This is a function
of Governance (executives and board).
- Most companies
are over controlled. There are tremendous cost saving opportunities
by applying just the right amount of control to manage the risk that
Governance is prepared to take on in order to deliver on business objectives.
- Traditional
control thinking (“something went wrong – we need more control”)
will never identify costly over control.
- Controls
protect people! People are your greatest asset.
- Controls
must be addressed at the GOVERNANCE,
MANAGEMENT and PERFORMANCE
levels.
- GOVERNANCE
approves how much risk (limits) the
operation, process or project should take on in order
to accomplish business objectives. MANAGEMENT
allocates the minimum resources to accomplish those
objectives within the risk limits. MANAGEMENT
tracks
and monitors the ongoing level of risk. Minimal cost
controls are implemented at the PERFORMANCE
level to keep the risk within the GOVERNANCE
approved levels. ASSURANCE provides
comfort
that the cycle is working effectively and efficiently.
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The
Best of the Best for 2006
RBIA
Gold Medal
Ms. Martha
Mimica, Florida Power & Light
RBIA
Silver Medal
Mr. Bill
Egan, Scotts Company
RBIA
Bronze Medal
Mr. Dan
Ashley, Qwest Communications
Congratulations!
prior
year winners
SOX
404 RISK CONTROL MANAGER 2.1 SOFTWARE
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