TORONTO, Feb. 11, 2016 /CNW/ - While many Canadian organizations are concerned with risk and have a documented management plan in place, a significant number (one in five) do not, according to a study by Chartered Professional Accountants of Canada (CPA Canada) and Financial Executives International Canada (FEI Canada).
More than 320 financial executives from across the country participated in an online survey for the study titled The State of Enterprise Risk Management in Canada. Robust, institutionalized enterprise risk management programs are common among large and public companies, where nearly half have one in place. The percentages decline for smaller and private companies.
The majority of respondents (66 per cent) describe themselves as only "somewhat confident" in their organization's ability to manage risk and the research also suggests there is a greater need for organizations to bolster oversight and operational responsibilities relating to risk.
"Having a risk management program in place isn't enough," says Carol Raven, a CPA Canada principal in Research, Guidance and Support. "You need to be putting it into practice and ensuring you have the right people overseeing it."
The 2008 financial crisis reinforced the need for risk management while highlighting the threat of unexpected occurrences. More recently, high profile cases of cyberattacks on corporations have raised awareness even further.
"With the speed of change in today's economy, identifying, understanding and addressing risks in a timely fashion is critical to an organization's success," says Laura Pacheco, vice president, Research, FEI Canada. "It's also essential to communicate these risks to employees. The study results indicate that a communication gap exists in companies today with regards to risk. FEI Canada increasingly sees this communication as part of the role of today's CFOs."
Among the study's highlights:
- Nearly one-third of senior financial executives say their employees mostly or fully understand the risks to their organization, but the majority of respondents did say that their Board of Directors and senior management teams either mostly fully or fully understood the risks that were relevant to their organization (72 per cent and 80 per cent respectively).
- When asked about the organization's strategy being aligned to its risk appetite, most felt that the company was either fully or mostly aligned. However, 24 per cent felt that the company's strategy was only somewhat aligned to its risk appetite and a further 4 per cent felt it was not very aligned at all.
For more information on the report and survey methodology, visit: cpacanada.ca/enterpriserisk
About CPA Canada
The new Canadian designation, Chartered Professional Accountant (CPA), is now used by Canada's accounting profession across the country. The profession's national body, Chartered Professional Accountants of Canada (CPA Canada), is one of the largest in the world with more than 200,000 members, both at home and abroad. The Canadian CPA was created with the unification of three legacy accounting designations (CA, CGA and CMA). CPAs are valued for their financial and tax expertise, strategic thinking, business insight, management skills and leadership. CPA Canada conducts research into current and emerging business issues and supports the setting of accounting, auditing and assurance standards for business, not-for-profit organizations and government. CPA Canada also issues guidance and thought leadership on a variety of technical matters, publishes professional literature and develops education and professional certification programs. cpacanada.ca
About Financial Executives International Canada (FEI Canada)
FEI Canada is the all-industry professional membership association for senior financial executives. With eleven chapters across Canada and more than 1,600 members, FEI Canada provides its members thought leadership, advocacy services and extensive professional development opportunities – including its executive education offering, the CFO Leadership Beyond Finance program. The association membership, which consists of Chief Financial Officers, Audit Committee Directors and senior executives in the Finance, Controller, Treasury and Taxation functions, represents a significant number of Canada's leading and most influential corporations. Further information can be found at feicanada.org
About the Canadian Financial Executives Research Foundation
CFERF is the non-profit research institute of FEI Canada. The foundation's mandate is to advance the profession and practices of financial management through research. CFERF undertakes objective research projects relevant to the needs of Canada's senior financial executives in working toward the advancement of corporate efficiency in Canada.
SOURCE CPA Canada
Image with caption: "CPA Canada (CNW Group/CPA Canada)". Image available at: http://photos.newswire.ca/images/download/20160211_C6963_PHOTO_EN_618505.jpg
Image with caption: "FEI Canada (CNW Group/CPA Canada)". Image available at: http://photos.newswire.ca/images/download/20160211_C6963_PHOTO_EN_618249.jpg
For further information: Diana Sorace, Manager, Media Relations, CPA Canada, T: 604-694-6700, C: 604-551-4487, firstname.lastname@example.org; Tobin Lambie, Principal, Media, CPA Canada, (416) 204-3228, email@example.com; Laura Bobak, Research and Communications Manager, FEI Canada, T: 416.366.3007 Ext. 5103, firstname.lastname@example.org