PricewaterhouseCoopers has unveiled an online risk management tool in conjunction with the release of an annual report on reviewing risk management trends.
Like what you see? Click here to sign up for Accounting Today's daily newsletter to get the latest news and behind the scenes commentary you won't find anywhere else.
The online benchmarking tool is aimed at helping companies benchmark their risk profile in comparison to their peers and the industry.
The annual report, Risk in Review, is based on a survey of more than 1,000 executives and risk management leaders. The report examines the state of global risk, and discusses risk management approaches companies may take to better cope with the ever-widening risk landscape.
“2011 marked a year of reckoning, and many companies are still struggling to create an effective approach to managing the ever-widening risk landscape,” said Dean Simone, leader of PwC’s U.S. Risk Assurance practice, in a statement. “Businesses are scrambling to fix weak links in their systems stemming from non-traditional risks such as social media and digital technology, to dealing with the realities of operating in today’s global marketplace. In this new risk era, corporate boards and senior management have a crucial role to play to ensure they set the right culture and align their strategy to risk imperatives.”
According to the report, forward-looking companies are responding by shifting their risk management focus in several fundamental ways: from internal to external, from operational to strategic and from bottom-up to top-down. To better prepare themselves to deal with unexpected events for the upcoming year and beyond, companies installed new risk management organizational structures, have put in place a new breed of risk management leadership and have adopted innovative techniques such as scenario analysis and predictive indicators.
The report identified a number of risks to watch out for in the year ahead, including intensifying economic uncertainty, increasing regulations, and renewed financial volatility. Economic uncertainty topped the list among the survey respondents as the biggest perceived threat, with 73 percent of respondents citing it, and 77 percent of financial institutions seeing it as a critical risk.
With high unemployment, rising financial insecurity and escalating social problems, 60 percent of the survey participants view regulatory risk as a major threat, and 75 percent of respondents operating in the financial and health care sectors consider regulatory change among their most critical risks. Nearly 60 percent of the respondents cited financial volatility as a paramount risk, with many worrying that the Eurozone debt crisis won’t get solved. More than 75 percent of the firms in the banking and other financial services sectors consider financial volatility as a serious risk.
To download a full copy of the report, visit http://www.pwc.com/riskinreview.