The COSO Framework for Internal Control
February 12, 2025
There are several books that have been written about the steps that need to be undertaken in order to be able to be effectively able to implement operational risk management in an organization. However, a lot of companies fail in their endeavors. This is because very few studies have been conducted about mistakes that need […]
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A risk treatment is mandatorily a part of an effective risk management plan. The plan here means how you respond to the reported potential risks. It details on strategies on how to deal with the various risks - low or high, acceptable or unacceptable. The plan also outlines the role and responsibilities of the team members.
Literally speaking, risk treatment also known as risk control, is that part of the risk management where decisions are made about how to deal with risks either in the external or internal environment. Various options like risk reduction, risk avoidance, risk acceptance and risk transfer.
Before you embark on risk treatment there is something called as risk response planning that needs to be taken care of. It is explained in detail below:
Risk response planning no doubt is an integral aspect of risk treatment. The planning covers discusses and evaluates inputs like risk register, risk profiles and cause control matrix. Strategies are formulated and documented in this stage. The following four different strategies are discussed upon.
By the end of risk response planning various risks and the corresponding strategies are documented. A risk register is ready that contains all details vis-a-vis the time of occurrence, priority and the people involved in handling the risk. The risks have already classified as either internal or external. Relevant risks are assigned to relevant stakeholders accordingly.
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