...protection of the hardware that runs the information system. Therefore, a proper understanding of risk management and all that it entails is of the utmost importance for every IT professional, regardless of specialization. The purpose of this paper is to identify what risk management is and give an overview of the three phases or undertakings that make up the risk management process and then conclude with a discussion and explanation of the six-step Risk Management Framework (RMF) developed by the Department of Defense and the National Institute of Standards and Technology (NIST) (National Institute of Standards and Technology, 2010). “Risk management is the process of Identifying risks, as represented by vulnerabilities, to an organization’s information assets and infrastructure, and taking steps to reduce this risk to an acceptable level” (Michael E. Whitman, Herbert J. Mattord, 2012, p. 119.). Thus, risk management is merely the ability of a person or organization to implement due diligence and identify any potential issue and develop policies and security measures to combat these risks. Risk management is comprised of three phases: risk identification, risk assessment, and risk control (Michael E. Whitman, Herbert J. Mattord, 2012, p. 119.). Risk Identification Risk identification is simply the identification and documentation of the assets and the threats to those assets. Risk identification is an...
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...Chapter 7: Assessing Risk and Internal Control Audit Risk Assessment: Auditing is fundamentally a risk management process. Audit risk is related to information risk that financial statements are materially misstated. -lower audit risk by performing more audit work that will give them a high level of assurance that the financial statements are correct. 1) INHERENT RISK (IR)- the probability of material misstatement occurring in transactions entering the accounting system or being in the account balances. Auditors do not created or control inherent risk. Can only assess its magnitude based on prior experiences, management bias, and the nature of the transaction. Look at characteristics of clients business, types of transactions, and effectiveness of accountants. 2) CONTROL RISK (CR): risk that the clients internal control system will not prevent or detect a material misstatement. Auditors do not create control risk, they assess probability of failure to detect material misstatements. Assessment is based on study and evaluation of the company’s control system. **Control risk should not be assessed so low that auditors rely entirely on controls and do no substantive work. 3) DETECTION RISK (DR): the risk that any material misstatement that has not been corrected by the clients internal control will not be detected by the auditor. **Auditors can control this risk by conducting substantive (balance audits) tests. (include: audit of details of transactions and balances, and analytical...
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...Relationship between corporate financial analysis and financial risk Any business will face some financial risk, its objective, not the people's will. However, if the business through good financial analysis, financial risk can be effectively prevented and controlled. In this regard, companies should focus on strengthening the financial analysis of the financial risks of business operations in a variety of financial risks for timely prediction and prevention, so as to improve economic efficiency of enterprises. Based on this, we have launched some discussion, want to contribute to a certain extent, corporate financial risk prevention. First, the financial analysis of the current Chinese enterprises widely used (A) comparative analysis Comparative analysis, as the name suggests, is to more than one set, or a set of comparative data or index, pairwise comparison, analysis, study, to determine the actual operating current business situation of enterprises and financial risks. Normally enterprises in comparison, and more is the issue and planned, the current number and the number of installments, business data and industry data, the actual number of the department and other departments and other indicators of the actual number of comparisons and analysis. (B) the structure analysis Structure analysis method refers to a particular financial indicators seen a whole, with its data as a part of the molecule, divided by the overall financial indicators to calculate the ratio...
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...Management and control (1) Management is the process of organizing resources and directing activities for the purpose of achieving organizational objectives” (2) Distinguish three elements of management process a. Objective setting Knowledge of objectives is a kind of necessary prerequisite for the design of MCS, but objectives do not have to be quantified and financial. Employees must have a basic understanding of what the organization is trying to accomplish. Otherwise no one could claim that any of the employees’ actions are purposive, and no one could ever support a claim that the organization was successful. b. Strategy formulation Strategy is defined how organizations should use their resources to meet these objectives. A well-conceived strategy guides employees in successfully pursuing their organizations’ objectives and conveys to employees what they are supposed to be doing. Strategy formulation is useful for make MCs, but is not mandatory. c. Management control I. Management control vs. strategic control 1) Strategic control -focus on external changing environment to identify the valid strategy -compete with other firms in industry based on the analysis of strengths, weakness, opportunities and limitations 2) Management control -focus on internal employees -employees should know what company expect them to do; employee really do what they need to do; employee have ability to do; solutions to the control problems. From a management control perspective,...
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...Luis GutierrezCSC 116 Homework #4 1. What is risk management? Why is the identification of risks, by listing assets and theirvulnerabilities, so important to the risk management process?Risk management is the process of identifying risk, as represented by vulnerabilities, toan organization’s information assets and infrastructure, and taking steps to reduce this risk to an acceptable level3. Who is responsible for risk management in an organization? Which community of interest usually takes the lead in information security risk management? Each community of interest has a role to play in managing the risks that an organization encounters and the information security community takes the lead in information security risk management. 6. What value does an automated asset inventory system have for the risk identificationprocess? The inventory listing is usually available in a database or can be exported to a database for custom information on security assets. Once stored, the inventory listing must be kept current, often by means of a tool that periodically refreshes the data. When you move to the later steps of risk management, which involve calculations of loss and projections of costs, the case for the use of automated risk management tools for tracking information assets becomes stronger. 9. What ’ s the difference between an asset ’ s ability to generate revenue and its ability togenerate profit? They both depend on a particular asset however some services may have...
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...the need for control over foreign operations varies with the strategy and distinctive competencies of a company? 1. The basic reason for a firm to have a foreign business strategy is that most product and factor markets extend beyond the boundaries of a single country. 2. However, most companies start operations as domestic companies and for achieving their profit objectives they develop first a domestic strategy. The options for a domestic strategy may include: (a) Investment in product development; (b) Expansion of the domestic market share; and, (c) Diversification into new industry. B. The firm’s foreign business strategy 1. There are 6 main steps in the firm's foreign business strategy: (a) the firm’s evaluation; (b) selection of a target market (country/region); (c) selection of product to make/sell in target market; (d) selection of market entry-entry mode (exporting, franchising, licensing, sub-contracting, joint ventures or wholly owned companies); (e) Business plan development and execution; (f) Monitoring and evaluation of results. 2. Exporting has the advantage of low costs and risks, avoiding the costs of setting up manufacturing operations in another country. The business plan in the case of exporting can take the form of an export marketing plan. 3. The main advantage of licensing is represented by the low costs for the franchisor because the franchisee bears the costs and risks of opening a new market; the main disadvantage is the risk for the franchisor...
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...AUSTRALIA 4 MATERIALITY LEVEL FOR AUDIT PURPOSE 4 1.NET PROFIT BEFORE TAX 5 2. TOTAL ASSETS 5 3.TOTAL REVENUE 5 4.TOTAL EQUITY 6 AUDIT RISK 6 A. ELECTRONIC DATA PROCESSING (EDP) 8 B. INVESTMENTS 8 C. CUT OFF PROCEDURES 8 COMMONWEALTH BANK OF AUSTRALIA’S INTERNAL CONTROL STRUCTURE 9 1. THE CONTROL ENVIRONMENT 10 2. RISK ASSESSMENT 10 3. CONTROL ACTIVITIES 10 4. INFORMATION AND COMMUNICATION SYSTEM 10 PRELIMINARY AUDIT STRATEGIES FOR SIGNIFICANT ASSERTIONS 11 1. EXISTENCE AND OCCURRENCE 11 2. COMPLETENESS 12 3. CUT OFF 12 4. RIGHTS AND OBLIGATION 12 5. VALUATION AND ALLOCATION 12 REFERENCES 14 Executive Summary The aim of this report is to develop an audit plan using the 2008 annual reports of the Commonwealth Bank of Australia. This report will provide an understanding of the underlying concepts of an overall audit strategy, which will be used for the verification of Commonwealth Bank operations. This strategy will bring forward the direction and scope of the Commonwealth Bank of Australia’s audit plan. This report will address five major points these are as follows: • Understanding the entity and its environment • Making preliminary judgements about materiality levels • Considering the audit risk • Understanding Commonwealth Bank of Australia’s internal control structure • Developing preliminary audit strategies for significant assertions The main source used in planning the audit is the Commonwealth Bank of Australia’s annual financial report...
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...an equitable share of foreign markets and that imports are controlled to minimize losses of domestic jobs and market share in specific industries. Discuss industry-level arguments and national trade policies * Industry-level arguments a) The national defense argument: used as a reason to support government protection of specific industry Country must be self-sufficient in critical raw materials, machinery, and technology or else be vulnerable to foreign threats Eg: Japan banned the imports of rice as a mean of promoting its self-sufficiency of dietary staple. b) The infant industry argument * Give firms temporary protection from foreign competition until firms are fully established * Powerful economic development strategy. * Infant industry protection is often done on a political basis * Once an industry is granted protection, it may be reluctant to give it up Eg: Japan has developed thriving metal fabrication industries by eliminating tariffs of row ores, and imposing high tariffs on processed ores. c) Maintenance of existing jobs * Jobs in high-wage countries threatened by imports from low-wage countries * Firms and workers often petition their governments for relief from foreign competition. d) Strategic trade theory * National trade policies Economic development programs: country depends on single exportsdiversify economy to reduce impact Industrial policy: determine which industries should receive...
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...Newcastle Business School Faculty of Business and Law ASSESSMENT ITEM COVER SHEET Student Name: May Han Thein Last name First Name 0 3 7 9 0 7 8 (Your studentmail account) Student Number: Email:c3087097@uon.edu.au Business Strategy N M 0 0 2 1 T G Course: ode Course Code Course Title Campus of Study: PSB Delta,Singapore Assessment Item Title: Assessment Item 3 Essay A5 24.10.2010 1451 Tutorial Group: Word Count (If applicable): Due Date/Time: Lecturer/Tutor Name: Param Alahakone X Extension Granted: Yes No Granted Until: Please attach the approved copy of your extension approval. Include here any instructions / checklist for submission I verify that I have completed the Faculty of Business and Law online Academic Honesty Module and adhered to its principles (please tick the box) Y I declare that this assessment item is my own work unless otherwise acknowledged and is in accordance with the University’s plagiarism policy available from the Policy Library on the web at http://www.newcastle.edu.au/policy/academic/general/academic_integrity_policy-new.pdf I certify that this assessment item has not been submitted previously for academic credit in this or any other course. I certify that I have not given a copy or have shown a copy of this assessment item to another student enrolled in the course. I acknowledge that the assessor of this assignment...
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...vulnerabilities, and threats to support organizational risk management decisions. This publication specifically addresses assessment and analysis of security control effectiveness and of organizational security status in accordance with organizational risk tolerance. Security control effectiveness is measured by correctness of implementation and by how adequately the implemented controls meet organizational needs in accordance with current risk tolerance. Organizational security status is determined using metrics established by the organization to best convey the security posture of an organization’s information and information systems, along with organizational resilience given known threat information. This necessitates: • Maintaining situation awareness of all systems across the organization; • Maintaining an understanding of threats and threat activities; • Assessing all security controls; • Collecting, correlating, and analyzing security-related information; • Providing actionable communication of security status across all tiers of the organization; and • Active management of risk by organizational officials. Purpose: The purpose of this guideline is to assist organizations in the development of an ISCM strategy and the implementation of an ISCM program that provides awareness of threats and vulnerabilities, visibility into organizational assets, and the effectiveness of deployed security controls. The ISCM strategy and program support ongoing assurance that planned...
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...Strategic Systems Auditing (SSA) Approach to Understanding Business Risk INTRODUCTION This section expands on the business analysis techniques explained in the chapter. The 1990s saw a trend toward developing new audit approaches that apply a technical knowledge of the theory of organizational strategy to evaluating a client’s competitive position and its effect on the client’s business risk. These developments have been referred to as the strategic systems auditing (SSA audits) approach to auditing. An SSA audit can be characterized as a top-down approach that starts with understanding the corporate strategy and the business as a whole to determine the effects on the financial statements. A key innovation in the SSA audit was that the auditor must try to understand the business as management runs it, but with an objective point of view. In contrast, the traditional financial statement audit tended to focus on a bottom-up approach, or gathering evidence on individual transactions and aggregating them to the financial statement level. The strategic systems approach is an application of systems thinking, as discussed in the chapter. The audit team obtains an understanding of management’s strategy by interviewing the senior managers and the managers of the various business units in the organization. The auditors learn about the business objectives (e.g., cost leadership, differentiation, market share) and strategies that management has in place to meet those objectives. The appendix...
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...TOPIC 1: DEFINITION AND CLASSIFICATION OF RISK Study unit 1: What is risk? 1. Defining risk? * Risk is the deviation or variability of actual results from desired or expected results * The principle in the business world is -that if risk increases, the possible return that is desired will also increase. * Risk management consists of three distinct dimensions: * Generating and utilizing opportunities in situations where a business has distinct advantages in accomplishing beneficial results with improved chances of success (upside management) * Introducing controls to prevent or restrain losses as a result of the constraints posed by the operating environment of the business (downside management) * Exercising methods and techniques to reduce the variance between anticipated financial outcomes and actual results (uncertainty management) 2. Risk and uncertainty? * Uncertainty arises from a person's imperfect state of knowledge about future events. * Perceived uncertainty : depends on information that person can use to evaluate the likelihood of outcomes and the ability to evaluate this information * Uncertainty consists of the following two elements: * uncertainty whether an event will take place * if the event does occur what the outcome thereof will be * The definition of risk as the deviation of an actual outcome from the expected result or outcome implies the following: * Uncertainty surrounds the outcome of the...
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...Strategic control: Strategic control is the art and science of taking action to meet what you promised to deliver . Steering the organization out of troubles Types of strategic control : Premise control : where are you hiding ? Get prepared emotionally to the way that you will going through, it,s a management process of continuously and systematically checking to determine whether premises upon which strategy is based are still valid. Strategic surveillance: where are you and where are you going, who is around you in control of environment , looking at the future might bring you everything you promised to achieve, monitor events inside and more often outside the firm that are likely affect the course of its over time. Special alert control: is thorough and often rapid ,reconsideration of the firm's because of sudden, unexpected event or incident. Implementation control: special programs are undertaken, key people are added or reassigned, and strategy related activities, implementation control is the type of strategic control that must be exercised as those events unfold . Ps go to the record to hear before Time on at the minute 59 Time 1 for the next 2 years we have strategy formulation Time 2 strategic implementation is parallel to strategy formulation to the strategy implementation you apply implementation control and above this we have another filter which is special alert control trigger the firm whenever there is any event or incident due to this triggering...
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...Case Analysis: Delux Tool Case Delux Tool Case Study Mr. I.M. Tycoon is now the owner of three diverse and unique companies; Delux Machine Tools, Safe Buy Insurance Company, and MicroAge Software. They all have been operating under different leadership styles and control measures and need to function as one corporation. After careful review and analysis of this case, and from an organization design perspective, I would say that the first thing that Mr. I.M. Tycoon should do is develop a thorough organizational structure. A company can have a great mission/product, great people, and great leadership and still not perform well because of poor organizational design. All three companies have a different approach to organizational structure and I think at this point, standards must be developed and instituted. A standard is the level of expected performance for a given goal. A standard can be set for any activity—financial activities, operating activities, legal compliance, and so on (Brasfield, 2013). Based on the current organizational charts of all three companies, I think that there needs to be some standardization for the organization’s structure. My recommendation for restructuring is to rename the company (Tycoon Enterprises or similar) to serve as an umbrella of all three companies. Then, define each company as a separate division within the company. Each division has a different mission and will continue to operate...
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...following: Tasks Evaluate the effectiveness of IT governance structure to ensure adequate board control over the decisions, directions, and performance of IT so that it supports the organization’s strategies and objectives. Evaluate the IT organizational structure and human resources (personnel) management to ensure that they support the organization’s strategies and objectives. Evaluate the organization’s IT policies, standards, and procedures; and the processes for their development, approval, implementation, and maintenance to ensure that they support the IT strategy and comply with regulatory and legal requirements. Evaluate the IT strategy and the process for its development, approval, implementation, and maintenance to ensure that it supports the organization’s strategies and objectives. Evaluate monitoring and assurance practices to ensure that the board and executive management receive sufficient and timely information about IT performance. Evaluate management practices to ensure compliance with the organization’s IT strategy, policies, standards, and procedures. Evaluate the IT resource investment, use, and allocation practices to ensure alignment with the organization’s strategies and objectives. Evaluate IT contracting strategies and policies, and contract management practices to ensure that they support the organization’s strategies and objectives. Evaluate the risk management practices...
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