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Enterprise Risk Management

Running head: ENTERPRISE RISK MANAGEMENT

Enterprise Risk Management
F. Bruce Creech
MBA560
Marina Fraiqun, Esq.
March 21, 2008
University of Phoenix

Enterprise Risk Management
Organizations are faced with all types of risks. Some risks can be internal or external and can result in total devastation of an organization. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) was established in 1985 to study issues which could lead to fraudulent financial reporting. These findings were then recommended to public companies, independent auditors, the Securities Exchange Commission and other regulators, and various educational institutions (COSO, 2008). Unfortunately, many organizations failed to follow these guidelines and millions of employees and shareholders were affected by fraudulent activities within these organizations. Enron, Tyco, WorldCom, and Adelphia were some of the companies who reported fraudulent information regarding returns on investments and operating capital. As a result of these companies using fraudulent methods in accounting, legislation was passed in the SOX Act to punish those who felt the need to betray those who had invested money and trust into the organization.
In order to help eliminate or deal with the risks faced in today’s corporate community, an Enterprise Risk Management Plan (ERM) can be used. The ERM can help manage risks such as operational, business, regulatory, technical, system, management, reputation, and event risks (IBERM Solutions, 2008). The COSO website indicates, “Enterprises operate in environments where factors such as globalization, technology, regulation, restructurings, changing markets, and competition create uncertainty. Uncertainty emanates from an inability to precisely determine the likelihood that potential events will occur and the associated outcomes.” (COSO Executive Summary, 2003) An ERM will be developed for Rouse Mortuary and Crematory (RMS) in Greenville, NC. This...