Reference no: EM133407407

Question 1: The importance of risk important plays an important role in corporate governance or arrangements for all organizations. It also benefits the strategic tactical, operational and compliance (STOC) core processes, activities, and decisions of an organization. Other benefits of risk assurance are it helps stakeholders to have confidence in the company and it helps keep the company's reputation and standing intact (Hopkin, 2018).

An audit committee is one of the most important committees of a company's board of directors, who oversee the financial reporting and disclosures of the company. The audit committee works closely with auditors to ensure that a company's books are being done correctly and that there are not any conflicts of interest happening between any of the auditors and the consulting firms that are employed by the company. The audit committee often maintains frequent communication with the chief financial officer and controller, and the committee has the legal authority to initiate investigations anytime they believe that accounting practices were violated or whenever situations with employees become problematic. Overall the audit committee oversees financial reporting, the monitoring of account policies, the overseeing of any external auditors, regulatory compliance, and they also initiate discussions of risk management. The audit committee's job is one that should be taken very seriously as it deals with financial reporting, compliance and risk management. When dealing with companies that have thousands of employees the audit committee job becomes even more serious due to the large number of employees, reporting systems that may stretch globally and the huge potential for cyber security risks (Tuovila, 2022).

Question 2: "Risk assurance is an important component of the overall risk management process" (Hopkin, 2018). Risk assurance refers to the process of ensuring that risks associated with an organization's operations, strategies and financial performance are appropriately assessed and managed. It is the responsibility of the board of directors and the audit committee to ensure that risk assurance measures are in place and that they are regularly reviewed and updated as required. Risk assurance helps to ensure that an organization's activities are conducted in an efficient and effective manner and also helps to protect an organization from potential losses or damages.

The sources of risk assurance accessible to the board/audit committee (CRSA) can be broadly classified into three categories. Internal risk assurance includes internal control systems, processes and procedures, risk management processes and internal audit activities, which are all designed to help identify and manage potential risks. External risk assurance includes external audits, assurance reports and other independent reviews, which are all designed to provide assurance to the board/audit committee that the organization is managing its risks effectively. Regulatory risk assurance includes any applicable laws and regulations, which set out the standards and requirements for risk assurance.

Over, risk assurance is an important element of corporate governance and is essential for an organization to protect itself from potential losses or damages. The board/audit committee must ensure that appropriate risk assurance measures are in place, and that they are regularly reviewed and updated as required. The sources of risk assurance accessible to the board/audit committee (CRSA) can be broadly classified into three categories: internal risk assurance, external risk assurance and regulatory risk assurance. By having a robust risk assurance process in place, an organization can effectively identify, monitor and manage potential risks and ensure that the processes and procedures are in place to mitigate any potential losses or damages.