As organizations navigate the complexities of the ever-changing business landscape, risk, compliance, and audit leaders face significant challenges in making informed decisions and driving their organizations forward. Resolver’s expert duo, Pooja Azhalavan and Ben Bradley share insights from their webinar, “The 10 Must-Have Reports for Risk, Compliance, or Audit Leaders” and their work helping customers optimize their Enterprise Risk Management (ERM) programs.
From incident management to tracking regulatory changes and everything in between, discover how accurate risk management reporting offers actionable intelligence to turn risks into opportunities. Let’s explore the 10 essential reports they recommend for data-driven decision-making and supercharging your risk management into risk intelligence:
1. Risk Tolerance Report
Purpose:Communicate the acceptable level of variation in pursuing objectives.
Benefits:Facilitate strategic discussions and identify areas of focus.
The Risk Tolerance Report communicates the acceptable level of variation that management is willing to allow for specific risks as the organization pursues its objectives during the risk management reporting process. It helps identify areas that require attention and improvement, facilitating strategic discussions at the executive level.
This report provides a risk level analysis that an organization is comfortable with and can handle in pursuit of its objectives. It considers factors such as the organization’s risk appetite, financial capacity, and strategic objectives, then establishes different risk tolerance levels for various types of risks. A Risk Tolerance Report serves as a reference for risk management reporting, providing a basis for risk metrics and key risk indicators (KRIs) that can be regularly monitored to assess risk exposure against established tolerance levels. It guides leadership teams to make informed choices around capital allocation and investment strategies that align with the organization’s risk tolerance.
2. High-Velocity Risks Report
Purpose:Identify and communicate areas of focus, encourage action on emerging risks, and convert risks into opportunities.
Benefits:Spot upward trends in risks, mitigate emerging risks, and capitalize on opportunities.
The High-Velocity Risks Report is a critical tool for organizations operating in fast-paced environments or industries with rapidly evolving risk landscapes. This report aggregates risks to identify consistent and upwardly trending exposure, enabling timely risk mitigation. It also evaluates the organization’s preparedness to respond to high-velocity risks, which allows leadership teams to encourage proactive action on emerging risks by examining the effectiveness of existing strategies and contingency plans.
3. Regulatory Obligations by Regulator Report
Purpose:Communicate compliance levels by a regulator, discuss areas of focus for control spend, and identify areas of non-compliance.
Benefits:Ensure compliance with regulatory requirements and prioritize mitigation efforts.
Breaking down obligations by regulators, jurisdictions, and compliance levels, this report helps ensure control effectiveness and reduces non-compliance risks by mapping each regulatory obligation to the corresponding business operations or processes affected, providing an assessment of the organization’s compliance status. Communicating the regulatory status to key stakeholders and discussing areas that require control spend are vital components of risk management reporting.
4. New Regulatory Obligations Report
Purpose:Understand and communicate increased regulatory burden, and justify investment in horizon scanning capabilities and new controls.
Benefits:Stay informed about changes in regulations and allocate resources effectively.
For accurate risk management reporting, it is imperative to continuously track and communicate new or updated obligations, regulatory guidance, or upcoming changes to the executive and the wider business. The New Regulatory Obligations Report assesses the potential impact of new regulatory obligations on the organization and helps organizations stay aware of the ever-changing regulatory landscape. This justifies investments in horizon-scanning capabilities and new controls which are critical to risk management reporting.
5. Audit Plan Report
Purpose:Communicate audit coverage, identify gaps, and ensure budget matches capacity.
Benefits:Ensure adequate audit coverage and resource allocation.
The Audit Plan Report outlines upcoming audits, objectives, and scope, and serves as a blueprint for auditors to conduct a systematic and comprehensive assessment of an organization’s processes, controls, and financial statements during the risk management reporting process. It holds the first and second lines of defense accountable and ensures sufficient coverage. Organizations can avoid potential gaps in coverage and capacity issues by having a clear and comprehensive audit plan.
6. Internal Audit Findings Summary Report
Purpose:Identify and communicate control failures, and ensure accountability through assigned corrective actions.
Benefits:Improve control activities and drive accountability for corrective actions.
Providing an overview of identified control failures and success stories from audit programs and testing activities, the Internal Audit Findings Summary Report helps prioritize improvement efforts, drives accountability, and ensures the timely resolution of critical issues.
7. Risk Incident Management Report
Purpose:Understand control failures and risk exposure, communicate financial loss, justify investment with near misses, and prevent future exposure.
Benefits:Identify root causes of incidents, track financial losses, and improve control effectiveness.
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