ACCA response to a public exposure draft issued by the Committee of Sponsoring Organizations of the Treadway Commission, 'Enterprise Risk Management – Aligning Risk with Strategy and Performance.'
ACCA would like to take the opportunity to comment on the Committee of Sponsoring Organizations of the Treadway Commission (COSO)’s Exposure Draft of the update to its Enterprise Risk Management–Integrated Framework (“ERM Framework”).
The timing for revisions to the ERM framework cannot be better. With significant uncertainty and volatility ever present in the external environment, boards are under significant pressure to be more accountable for their stewardship, including managing risks. The effective management of risk is essential to ensuring the delivery of the organisation’s strategic objectives, as well as meeting its regulatory and compliance requirements.
We need to recognise that effective risk management improves the overall governance of the organisation and should result in better enterprise decision making, helping manage both downside risks as well as taking advantage of new opportunities that may arise. This is particularly relevant in an environment where the complexity of risks has increased and where new risks are emerging.
New guidance on enterprise risk management is also relevant for the constituency that we primarily represent – professional accountants. ACCA’s members are employed in a wide variety of roles around the world and through these various domains and areas of responsibility make a strong contribution to supporting sustainable enterprise growth and ensuring effective financial stewardship of the organisation. They also have a part to play, working with colleagues across the organisation, in supporting the business to help manage risk and create value. It should be clear - we do not see professional accountants or indeed any other function as having “ownership” for the risk agenda.
The ownership of effective risk management in the organisation ultimately rests with the board, and cannot sit within any one designated function. Professional accountants can and should play their part in this initiative but in reality everyone employed by the business has a role to play in helping manage risk.
Our detailed comments in respect of specific questions to which we responded within the consultation are set out in the document below.