Risk Management and Internal Controls in Medium Sized Family Managed Listed Companies – by SPJIMR, 2014
Risk is inherent in every business and arises directly from its unpredictability. It is defined as
the uncertainty of the occurrence of an event that could have a positive or a negative impact
on the achievements of business objectives. Thus risk is now becoming the fourth dimension
of business after people, processes and technology. Research work around the world has
indicated that companies which succeed in turning risks into results are capable of creating
competitive advantage for themselves.
Risk management is the process which aims at helping organizations understand, evaluate
and take action on all their risks with a view to increasing the probability of success and
reducing the likelihood of failure. Risk management backed by adequate internal controls
has currently assumed greater importance due to the large number of corporate failures
which have been largely attributed to the inability of boards to recognize the risks faced by
the company and their failure to take suitable mitigation measures in time. Several
regulatory measures have been promulgated in UK and USA since the late 1990s, . . .
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