Research On Risk Management Of Company A Based On The COSO-ERM (2017) Framework

With the sustainable development of social economy,listed companies have faced challenges in economy,strategy,governance,management,etc.How to better achieve risk management has become an important problem to be solved by company A.The application of COSO-ERM(2017)framework is conducive to the combination of risk management and corporate strategy,and it is of great significance to improve the level of corporate risk management.Hence,we conducted research on risk management of company A,based on the COSO-ERM(2017)framework.First of all,we study identified the risks of company A to generate its corresponding risk list from five aspects of the COSO-ERM(2017)framework,namely governance and culture risk,strategy and objective-setting risk,performance risk,review and revision risk,information,communication and reporting risk.Afterwards,we found that company A was unable to combine risk management with company management strategy.And the issues of risk management were as followed: Failure to effectively prevent risks in the company’s internal environment;lack of risk identification and assessment of strategic implementation and a need for improving ability of strategic risk response,risk review,major change assessment as well as information communication;insufficient vigilance for macro-environmental changes and the authenticity of financial report disclosure.Besides,we carried out risk assessment for company A via following the risk assessment method:The standard of risk assessment was developed for company A;classified its risk into several levels;Borda ordinal value method was used for acquiring the residual risk list;Analytic Hierarchy Process(AHP)was applied to calculate the risk weight and judge the risk level.Subsequently,we got the risk assessment results of company A.Company A was in high-level risk via overall risk assessment as primary risk.Among the COSO-ERM(2017)five aspects of risk(secondary risks),governance and cultural risks,performance implementation risks,and information,communication and reporting risks were high-level risks.Among the tertiary risks,there were 5 high-weight and high-level risks and 9medium-weight and high-level risks.Finally,in accord with its risk assessment results,we proposed a series of recommendations on how to response to risk,from the viewpoint of COSO-ERM(2017)framework.In order to highlight the importance of risk,measures were put forward to deal with 14 items of high-level risks for company A,focusing on 5high-weight and high-level risks,including internal supervision risk,organizational structure risk,external guarantee risk,debt risk and capital security risk these.And the recommended measures consisted of 3 aspects embracing organizational structure,risk management system and information techniques.In light with COSO-ERM(2017)framework,this work investigated company A’s risk management and found that risk identification,assessment and response were vital for boosting the management level of company risk.At the same time,our study may provide reference for the risk management of companies within the same industry.