Corporate Compliance ReportThe need for corporate governance has become a top priority for businesses in light of recent corporate scandals. Part of this compliance includes managing risk across the entire enterprise. "Business risks are uncertainties that can impinge on a company's ability to achieve its objectives and can result in many interdependent outcomes-some negative, some positive. Moreover, risks are a function of severity and likelihood" (Reding & Sobel, 2004, p.29).
This report will outline a plan to implement enterprise risk management (ERM) based on the Committee of Sponsoring Organizations of the Treadway Commission (COSO) recommendations for Wal-Mart.
This report will start by distinguishing between preventive, detective, and corrective internal controls. Next, a recommendation of a preventive solution that incorporates risk mitigation for Wal-Mart will be given. This part will define risk, ERM, and governance. Included will be a description of the ERM and governance framework to include who should be responsible for what and who should communicate what to whom.
This will be followed by COSO's new ERM framework which will include a brief description of each of the components. Lastly, how governance is aligned with ERM will be outlined.
Internal Controls"The Sarbanes-Oxley Act of 2002 extends the long-standing requirement for public companies to maintain systems of internal control, requiring management to certify and the independent auditor to attest to the effectiveness of those systems" (COSO, 2004). Preventive, detective, and corrective are terms used to define types of internal controls. Detective controls are used to identify irregularities or errors that have occurred while corrective controls are used to correct these. In turn, preventive controls are used to stop this from occurring (Intraweb, 2008). "Wal-Mart manages enterprise risks through facilitated workshops and a focus on organizational objectives" (Walker, 2008). While Wal-Mart uses this and other internal controls as part of the...