At the instructions box Essay Example | Topics and Well Written Essays - 500 words

At the instructions box - Essay Example ERM’s role within organizations is the provision of a reliable framework under which the methods and the processes essential in the management of risks are outlined. Expounding the same, it is a reliable tool expressing clearly the organizational objectives putting into consideration a balance between the potential risks and their rewards (Barton et al., 2002). In its capacity, the primary importance of ERM in business premises is the provision of an assurance that eventually enables organizations to effectively control the risks and maximize opportunities. As a case example risk management at PricewaterhouseCoopers (PwC) reveals that if done and managed effectively, ERM impacts significantly in value addition, sound response to change as well as maintaining a steady improvement and enhancing adequate response to changes (Simkins & Ramirez, 2008). Although it cannot be quantified numerically, the assumption of ERM inclusion in any organization is expected to have a negative impact since a robust framework that decisions can be based upon is not provided. In turn, risk management becomes a challenge, as there is no reliable tool to balance and mitigate the process. Internal audit relevance in enterprise-wide management is embedded on three categories of roles, which are distinct, and the executive should remain aware of. The first category concerning ERM embarks on assurance, followed by risk management evaluation while the third category involves the management review of the key risks (Institute, 2004). As an indispensable part under ERM, internal auditing serves as a consultant and in turn; the physical duty to manage risks is left as a management’s responsibility. The relevance of the distinctions is providing a controlled process under which the management will be helped to set up and improve the crucial processes. It serves more of an advisory as opposed to actual risk