AICPA/CIMA Report: Corporate Oversight Needs Work
A large percentage of companies worldwide do not havestrong risk oversight procedures in place, according to a research reportissued jointly by the American Institute of CPAs and the Chartered Institute ofManagement Accountants.
The report, "Enterprise Risk Oversight: A GlobalAnalysis," showed that 45 percent of U.S.-based CPA executives indicatedthat their companies had no enterprise-wide risk management process in placeand no plans for implementing one. Some 37 percent of global respondentsreported a similar condition at their companies.
To compile the report, the AICPA polled CPA executivesfrom 331 U.S.-based organizations , while CIMA garnered responses from 264executives from organizations around the globe.
Some 84 percent of U.S. executives rated their companies'risk oversight as ranging from "very immature" to "moderatelymature," compared with 61 percent of international respondents.
A majority of both of U.S. (60 percent) and of global (75percent) respondents said the volume and complexity of risk are greater thanthey were five years ago. However, less than half of both groups (40 percent ofU.S. and 47 percent of global respondents) described their organization asbeing "risk averse."
"While the report reveals that companies are morecognizant of risk, they are still falling significantly short in institutingrisk management processes," said Carol Scott, AICPA vice president -business, industry and government. "The financial crisis underscored thepotential consequences for companies that have lax risk oversight."