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Enterprise risk management and budgetary control Logo cima

  Michela Arnaboldi & Irvine Lapsley |   Free |   CIMA |   2011 |   Thought leadership

Enterprise Risk Management (ERM) is increasingly claimed as a tool for improving the capability of companies in predicting and managing risks, enhancing planning and the achievement of their goals. This research argues that the managerial role of ERM and its link with budgeting is both a strategic and a management challenge for companies.

ERM may be considered the culmination of the risk management explosion (Power, 2007) which started during the 1990s. ERM is intended to be a holistic approach for assessing and evaluating the risks that an organisation faces (COSO, 2004). Interest in ERM has grown rapidly in the past 15 years and after recent financial scandals, there has been further pressure from various parties to adopt and embed ERM in business processes. In the UK, the publication and review of the Turnbull Report signalled a close coupling between internal control and risk management, making ERM a central focus of corporate governance.

Topics covered:
  • Management accounting: Technical: Business planning: Planning, forecasting & budgeting, Expert
  • Management accounting: Technical: Risk management & internal control: Risk management policies & procedures, Expert

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3 Comments/Reflections

Timothy Wright

Timothy Wright Dec 2022

What did I learn?
That there is more than one way to implement and use ERM.

Did I find this useful?
Yes, knowing that that is not a one size fits all solution.  And that ERM does not full completely under the remit of the management accountant.
Robert Smith

Robert Smith Mar 2020

This is a good summary of the diversity of implementation models being adopted by larger companies that are deploying ERM.

What competency did I develop?
Better appreciation for different implementation models.

What can I do now that I couldn't do before?
I have a greater appreciation that there is no one right answer in deploying ERM.

Did I meet my objectives?

What will be the wider impact on my team, organisation and career.
I will be more open minded regarding different implementation models being used and involve different team members in ERM,
Nigel Welch

Nigel Welch Dec 2015

The identification of Enterprise risk management and its involvement in the planning and budget process should not be taken lightly.

It needs to encompass all fields of the business and interface with existing risk management systems