Systems of Risk Management and Internal Control

Question 1

What is Risk?

Answer 1

“The effective of uncertainty on objectives, whether positive or negative.” - International Standard ISO31000

Risk refers to the possibility that something unexpected or not planned for will happen.

Question 2

Why is risk becoming increasingly important?

Answer 2

• The increased speed of change e.g. AI, Cyber security
• The increased transparency e.g. social media
• The change in the type of risks i.e. from tangible risks to intangible risks such as reputation and cyber risks
• Risks are becoming more interconnected
• An increasing recognition that Risk management is not just a compliance discipline. It is more about building relationships between different parts of the business and developing behaviours and a culture of risk management which require a different skill set.