„Does your decision making process includes all risks that your company is facing? At Crowe you can find professionals that can assist you in identifying risks that impact your company objectives and taking the most effective route towards your long-term goals.
Take a look at our brief prospect to discover how we can improve your risk management and decision making process.“
Risk management process is applicable to all companies, regardless of their size, stage of development or ownership structure. Small and medium-sized firms often lack the resources to quickly react to internal and external threats, leading to potentially large losses. On the other hand, large companies often experience numerous changes caused by their growth while business processes remain the same despite these changes. Risk management process is therefore a key tool used to identify and evaluate arising risks, as well as to make informed decisions on their acceptance, mitigation or elimination.
Crowe team sees risk management as a choice of options to achieve long-term goals instead of reacting to changes that cause unforeseen risks. At Crowe you will find professionals that can assist in reassessing your company objectives based on current business environment. This step is fundamental in establishing the risk management process before defining policies, procedures and practical activities to identify, assess and monitor risks.
Crowe professionals have experience in various industries, allowing us to adapt the risk management process to existing resources and company/market specifics. As a result, the advantage of effective risk management is avoidance of additional costs and resources that have no visible benefit to businesses. Our ambition is to be your long-term advisors in creating a risk aware environment that contributes to the regional market sustainability and well-being.
Why should any company implement effective risk management?
The point of risk management is not to incur additional costs for the company, but to implement optimal and purposeful process that allows:
Set up/Upgrade of Risk Management Process
Our experts have significant experience with the largest domestic and regional companies in setting up the basics for the risk management process. After assessing business environment and recognizing potential for improvement of clients' business processes, we are able to design a formal framework, implement organizational arrangements and adjust human and technological capacities for the needs of risk management activities. While setting up the process, we are guided by the requirements of internationally accepted standards (ISO 31000 and COSO framework) and relevant regulatory institutions.
The benefits of establishing an efficient risk management process include:
Design of control environment
The control environment is basic element of risk management consisting of a set of policies and procedures that define processes and relevant control activities. The degree to which management is able to rely on control environment affects the quality of their business decisions and efficiency of employee activities. Therefore, the established control environment must be in accordance with the size and capabilities of the company.
Policies and procedures in the area of risk management should contain basic principles, mechanisms and a framework for controlling and managing significant risks faced by employees and company managers. With extensive experience in designing risk management processes in various industries, our team can assist you in formalizing documents that govern the entire process, including:
The benefits of having formal documents that govern the risk management process include:
Optimization of internal control activities
Control activities are performed at all levels of the company, in different phases of company business, processes and technological capabilities, and their main purpose is to reduce identified risks. The wide range of industries in which the Crowe team has acquired previous experience allows us to comprehend and analyze current control acitivities implemented in our clients' business processes. The aim of our analysis is to determine the weaknesses in internal control system based on internal audit best practices and standards specific to certain industries. Our team also provides professional assistance and independent support in the implementation of recommendations for improvement of business processes.
The benefits of improving internal control activities include:
Control environment design
The owners and/or company management establish the "tone at the top" in terms of the importance of internal control activities. The effectiveness of internal controls has significant impact on management decisions, since it determines the extent to which data will be complete, accurate and up-to-date. Our advisors can assist you in developing policies and procedures that allow management to secure effective internal control system and thus enable informed decision-making. When drafting procedures, we emphasize clear description of control activities embedded in business processes while being wary of limited resources and their cost efficiency.
The benefits of having formal documents that regulate process activities include:
Outsourcing of internal audit function
Primary purpose of our work is to determine the extent to which client' management and employees are aware of material risks that threaten the company's strategic and operational objectives in various business areas. Furthermore, the scope of internal audit services include evaluation of internal control system in terms of adequate compensation for material risks. Accordingly, our team tests and validates the design and effectiveness of the internal control system, and provides feedback to management on the quality of key controls. In case of deficiencies, our team provides recommendations for corrective actions, control activites and policies/procedures update, thereby encouraging improvement of business processes. Our services include a qualitative and quantitative approach to internal audit, with adequate data that support the results of the internal audit. Client benefits from outsourcing internal audit services include greater availability of human resources for other tasks and addressing risks in a proactive manner.
External assessment of internal audit function
Our team evaluates internal audit activities based on the Practice Advisory 1312-1 requirements and the International Professional Practice Framework of Internal Audit ("IPPF"), that include:
We present our observations, identified practices, weaknesses in comparison to best practices and Internal Audit Standards, as well as recommendations in areas that are integral to the client's internal audit activities.
The benefits of internal audit function external assessment include:
Corporate governance assessment
Corporate governance implies a set of rules by which the internal organization of the company functions, selection of directors and board members, supervision of owners, planning and reporting system and evaluation of results. These rules should be designed to secure the transparency of companies' operations. International financial institutions and potential investors analyze and evaluate the quality of corporate governance when weighing on investment decisions. Therefore, the established corporate governance rules enable the attraction of financial capital and highly qualified personnel, while at the same time providing confidence to investors about the efficiency of the organization, management and business processes.
The Chambers of Commerce in the SEE region have developed Codes of Corporate Governance that contain principles and recommendations for setup of sustainable business environment. The Code rules are not binding, however they complement the existing legal framework with an aim to make companies more competitive, efficient and transparent. In addition to the locally defined regulatory framework and the aforementioned Code, there are also simplified versions of best management practices tailored to the different needs of small and medium-sized companies. The Crowe team provides services that include review and analysis of ownership relationships, decision-making processes, financial management, business transparency, culture and commitment to effective management, operational activities and digitalization, in an effort to identify corporate governance areas that are non-compliant with relevant codes and practices.
Potential improvements in the field of corporate governance that we have identified so far include:
The direct benefits of effective corporate governance include: