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Abstract

Implementing a risk management process, in the economic entities is required firstly since there occurs the uncertainty on the nature of the threats that may affect the achievement of objectives and the environment where the entity operates, and secondly since the risk management is the cornerstone of corporate governance.

Key words:

Corporate governance, audit, control, management, compartment

JEL Codes:

G32, G34

1. Introduction

The overall objective of risk management is to manage risks and to ensure an effective and an efficient use of resources and protection of the public interest and employees by minimizing threats and attending the objectives. According to this objective, a risk management process implementation is due to the following:

a) risk management is part of the entity's management and accountability;

b) risk culture must be positive;

c) threats that hinder the objectives must be managed;

d) priority in risks decisions implementation.

To achieve these requirements, the public entity establishes responsibilities, measures and reporting systems implemented in the departments. The implemented measures on risks and risk management are designed to limit their impact on the entity's objectives.

2. Risk management

In the same context, we specify that the purpose of risk management is to identify risks associated to objectives and to evaluate and assess the internal control system's ability to keep risks within acceptable limits.

Designing and implementing an appropriate risk management process provides the following:

a) an efficient and an effective use of funds;

b) change of leadership style that besides risk treatment measures will design and implement internal controls and devices to limit their level;

c) objectives achievement in terms of efficiency and effectiveness;

d) building a sound internal control system, with appropriate and functional control measures.

Regarding the risk, we specify that in its evolution it has experienced several meanings according to experts in the field, for example:

* James Tobin and Harry M. Markovitz, Separation Theory followers argue that the risk must be addressed by separating assets in risk-free assets and risky assets;

* Nicklas Luhman, a German sociologist, notes that "risk is a general form that society decides its future," so he thinks that "the future is totally dependent on present decisions." In this context, risk is a problem that may be related to...

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