The first step to assessing your controls risk within your business is to identify the risks. There are numerous ways to be exposed to risk, but operational, financial, and compliance risks are some of the most common. Once you have identified these risks, it’s time for you to assess how likely they are to happen.
This assessment will help determine what steps need to be taken to control those risks before they become an issue. This article will go over five simple steps that should help get you started with understanding the basics of controls assessments!
Contents
1) Identify the Risks
- What are some of the risks that my business is exposed to?
- How likely is it for these risks to happen?
- Are there any steps I can take now to reduce my chances of being affected by them later on down the line?
The first step to assessing your controls risk within your business is to identify the risks. There are numerous ways to be exposed to risk, but operational, financial, and compliance risks are some of the most common. Once you have identified these risks, it’s time for you to assess how likely they are to happen. This assessment will help determine what steps need to be taken to control those risks before they become an issue.
2) Assessing your Controls Risk
The second step to assessing your controls risk within your business is determining how likely these risks are to happen. This can be done by looking at historical data and current trends. This will allow you to identify if any red flags may need your attention now rather than later on down the line when it’s too late.
Once you have determined exactly what controls should be put in place, it is time for you to take action and implement these changes before something bad happens within your business.
3) Implement Controls
After you have assessed your control risk within your business, it is time for you to implement the recommended changes for them to be implemented. These changes may include background checks for employees, implementing a new payment system, or updating your current ones.
4) Evaluate Any Issues
- What are some of the issues that have come up with regards to the implementation process?
- How will these issues be resolved?
The last step when assessing your controls risk within your business is evaluating how effective these new measures are and determining if they need any further modifications or adjustments before they become a part of everyday life regarding running your company from here on out. If there aren’t any major issues plaguing the implementation process, then congratulations! You’ve completed this five-step process and can now feel secure in knowing that you’re taking all of the necessary steps needed to keep yourself protected against operational, financial, and compliance risks in the future!
5) Repeat the Process
Repeating the process is key to truly understanding your company’s controls risk. As you grow and evolve, so will the risks that are associated with it. That’s why it is important to keep repeating this process on an annual basis. This will ensure that you’re taking the appropriate steps in order to protect yourself against any potential issues or problems that could lead to bigger ones later down the line.
In summary, make sure you identify what areas may be at risk for an issue down the line to understand where improvements should be made. Assess whether these changes will happen by looking at historical data, current trends, and actual risks. Implement changes once they are agreed upon by management before evaluating how well the implementation process is going for you. Want to learn how material weaknesses can be avoided with a comprehensive control framework based around continuous controls monitoring? Click here.