Integrated Risk Framework
The frame work need to address all of the
risk in the organizational assets. These are:
Þ
Financial assets (like cash,
credit, and negotiable instruments).
Þ
Physical assets (like land and
building and other equipment).
Þ
Human assets (knowledge, skills
and commitment of people).
Þ
Intangible assets (like reputations,
brands and information).
1-Ownership risk
2-Process risk
3-Behavioral risk
1-Ownership
risk refers to risks like external
threat to organizations are unions, group making pressures and custodial risk like threats to assets
destructions, steeling of assets.
Hazards like asset associated loss or impairment through fire and natural
man (accidental loss) and opportunity
cost like purchase of wrong assets, selling of assets too soon or too late.
2-Process
risk is hazards like accidents to
physical or human assets.
Error/omissions/delays risk are due to poor judgments in plans and
operations and machine malfunctions.
Frauds like kick-backs, big rigging, bribery, and productivity loss like under
utilizations of assets, missing control and lack of monitoring system.
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