http://www.theiia.org/intAuditor/free-feature/2010/february/a-look-ahead-top-risks-for-2010/ Blogen-us Mon, 29 Oct 2012 03:42:35 PMMon, 29 Oct 2012 03:42:35 PM http://www.theiia.org/intAuditor/free-feature/2010/february/a-look-ahead-top-risks-for-2010/2011-01-26Thanks for all of the comments. This is a difficult area, and one that I've always struggled to tackle within word count limits. 12 months later I thought it prudent to reflect back and see how we went and acknowledge some of the feedback above. This article can be found here for those who are interested. http://www.todddavies.com.au/2011/01/26/a-look-back-top-10-risks-for-2010/ http://www.theiia.org/intAuditor/free-feature/2010/february/a-look-ahead-top-risks-for-2010/2011-01-26My apologies for not checking in sooner, I didn't realise that this article was open for comment or that comments had been made. I received a reader inquiry today asking 'So can u please tell me what should be the answers to the questions in "What to look for" section.' My response was that some answers would be immediately apparent and some may require engaging specialist expertise. The intent of my article wasn't to be a futurist, but to point out some significant risks as I see them, mainly in the strategic risk class which are often overlooked due to a short term focus on the here and now. There are three standard responses I normally get when talking or writing on this topic: 1. These risks are not here and now, and I've got bigger things to deal with in the near term, so please don't waste my time 2. I don't believe these risks are going to manifest during my tenure, so they're not my problem 3. You're right, there are some blind spots, and thanks for pointing it out so I can find out more. Now invariably on these risks our timing is always going to be a bit off as are many in my reference group on emerging strategic risks. These risks by their very nature tend to move from impossible to possible and probable on your risk matrix over time and with increasing consequence. It is worth looking back to see how the top 5 themes list fared 12 months later with the benefit of hindsight. Here's a few thoughts. 1. Energy prices. Forecasters are saying we're still 12 months away from $100/barrel, but today world leaders are leaning on OPEC to increase supply to try and postpone the rise. Coal prices are increasing. Governments are strategically positioning around energy security as they understand the consequences to be catastrophic. 2. Industrialised world atrophies while the emerging economies grow. There are clear signs of this. Have a look at the Europe vs China story. 3. Population pressures and constraints on commodities. Notice that the resource companies are the ones driving economic growth in the developed world over the past 12 months? Seen what's happening with food prices lately? 4. Structural currency rebalancing? I'm pretty glad I advised my clients to get out of certain currencies, the consequences would have been more than material and in some cases catastrophic leading to a crisis of confidence in management and the board. 5. Climate change. Sure, I'll agree, not a risk in itself, but on three of the 6 boards and audit and risk committees I sit on, it's a key driver which those organisations will struggle to deal with. I guess all of this raises a philosophical question about who should be responsible for keeping an eye on strategic risk. In my experience the board and independent risk committee tends to do okay at it, but management is very much immersed in delivering this year's plan. The results can be devastating. We've seen those. Either way, if internal audit is to provide assurance over the risk frameworks and risk reporting of organisations as the IIA is calling for then, we need to have an eye on the horizon, including matters like this. I hope this has stimulated debate, including people who don't agree with me, and if it has, then this has been very worthwhile. __ Note: I am no longer on staff with the IIA and these represent my personal views. http://www.theiia.org/intAuditor/free-feature/2010/february/a-look-ahead-top-risks-for-2010/2010-05-17The risks highlighted aren't necessarily those that pose the greatest risk to the business environment in the short and medium term. That said, I will not rule out the opinion that they indeed require close, continuous monitoring, with clear concise reporting on their actual and likely potential impact on the achievement of business goals and objectives. I am also of the opinion that the identified themes constitute risk classifications that are too broad and as a result require much more detailed risk analysis than has been presented. http://www.theiia.org/intAuditor/free-feature/2010/february/a-look-ahead-top-risks-for-2010/2010-05-01I believe climate change is 2015 risk and in 2010 it is not change.See fact of world economy in 2008 and 2009 to believe this case http://www.theiia.org/intAuditor/free-feature/2010/february/a-look-ahead-top-risks-for-2010/2010-04-17This is a listing of few ''common issues don’t appear to be showing up in mainstream corporate thinking''. Uniqueness of each organisation in terms of its mission and vision generates specific risks. A ''generalisation'' and identification of key risks will be purely hypothetical. http://www.theiia.org/intAuditor/free-feature/2010/february/a-look-ahead-top-risks-for-2010/2010-03-31I believe that the 5 areas highlighted above are very relevant no matter where we are located around the world... Dont you feel that organisations are still exposed to risk arising from the recent financial crisis? http://www.theiia.org/intAuditor/free-feature/2010/february/a-look-ahead-top-risks-for-2010/2010-03-15I am more than a little skeptical that the biggest risks facing companies in 2010 are things like 'climate change', 'population pressure on resources', and 'energy price change', at least as a result of the phasing out of carbon. This article sounds more like a political agenda than a serious auditing paper. Lets focus on some of the real risks facing companies-- actual cases and the threat of cyber espionage, financial regulation and oversight burden and the rapidly changing rules landscape; and the risk of altered international relations with key trading partners. http://www.theiia.org/intAuditor/free-feature/2010/february/a-look-ahead-top-risks-for-2010/2010-03-11Fantastic http://www.theiia.org/intAuditor/free-feature/2010/february/a-look-ahead-top-risks-for-2010/2010-03-11Climate Change, top risk for 2010... Really ? http://www.theiia.org/intAuditor/free-feature/2010/february/a-look-ahead-top-risks-for-2010/2010-03-07It is very helpful , since the the modern internal audit become risk-focussed http://www.theiia.org/intAuditor/free-feature/2010/february/a-look-ahead-top-risks-for-2010/2010-02-24Good staff.