The Standards of Risk Management

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There are various risk management standards that can be applied at the local or international levels. Overall, various norms exist because countries may differ in terms of legislative practices, corporate responsibility rules, auditing processes, and reporting standards.

Thus, there are different risk management principles that can be adopted at the national level. Additionally, one should keep in mind that companies representing different countries can cooperate with one another. Therefore, it is important to develop internationally accepted standards and rules.

For instance, such an institution as the International Organization for Standardization (2009) introduces the norms which can be recognised by businesses working at the international level. This is one of the points that should be singled out.

Overall, these international norms can help companies establish partnerships because senior executives should see that both companies adhere to the same principles.

Overall, organisations need to use these standards in order to strengthen their sustainability.

By evaluating the performance of companies according to these criteria, managers can identify potential weaknesses in the organisational design, flaws in the financial reporting, quality control deficiencies, and so forth (Standards New Zealand 2009; Financial Reporting Council 2014).

Furthermore, the knowledge of these norms can be useful for assessing the work of senior executives or frontline managers. As a rule, the compliance with these standards may not be obligatory for companies that are not publicly traded. However, by following these rules, one can make businesses more sustainable.

These are some of the benefits that can be identified and students should not overlook them.

As it has been said been before, there are many standards related to risk management. Among them, one can distinguish the norms established in Australia and New Zealand (Australian Government 2010, p. 2).

These norms should be considered because they incorporate specific guidelines that can strengthen the sustainability of an organisation. For instance, one can speak about the requirement to pursue inclusive policies.

In other words, the management should consider the opinions of various stakeholders in order to identify the threats to which a company can be exposed. Furthermore, risk management policies should be implemented at tactical and strategic levels (Australian Government 2010, p. 2).

This policy can help companies identify potential risks at the early stages. Thus, the standards adopted in New Zealand and Australia should be considered. However, one should not suppose that international norms can be dismissed.

The information about these rules is included in the curriculum because students may need to work in companies operating at the international level. So, they should understand risk management principles that may be adopted in other countries. By learning about these standards, a person can better evaluate the performance of the company.

In other words, he/she can better understand the reasons why a company does not function effectively. Thus, this knowledge can contribute to the professional development of a person.

On the whole, these examples show that the knowledge of risk management standards is critical for future professionals who may represent different fields. This knowledge can help them assess the performance of a business.

Moreover, these issues are important of anticipating possible challenges that a company may face in the future. Furthermore, this information can be critical for developing the strategies of a business.

Finally, these standards can be regarded as guidelines that business administrators should follow. These are the main arguments that can be put forward.

References

Australian Government 2010, Risk Management Principles and Guidelines. Web.

Financial Reporting Council 2014, Guidance on Risk Management, Internal Control and Related Financial and Business Reporting. Web.

International Organization for Standardization 2009, Risk management – Principles and guidelines. Web.

Standards New Zealand 2009, Risk management standard. Web.

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The Standards of Risk Management

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