Risk Management Trends and Developments

Running head: RISK MANAGEMENT TRENDS

Risk Management Trends and Developments

Student Name

University of Phoenix

FIN 415 – Corporate Risk Management

Leslie Hudson

May 3, 2010

Risk Management Trends and Developments

Risk management is an important factor in today’s organizations, no matter what industry the company deals in. “Risk management is a formal process that enables the identification, assessment, planning and management of risks” (Merna & AL-Thani, 2008, p. 2). While some organizations have little to no risk management plans in place, others are more prepared to handle any risks, whether they are positive opportunities or negative threats, by having a formal risk management plan in place. In today’s economy and business world, things are ever-so-changing, and it is critical for organizations to easily adapt and make necessary changes to put themselves in a position to succeed. This paper will examine three new trends in risk management by summarizing each trend, discuss the significance of each, both pros and cons, and discuss the implications of each in the business environment.

Fraudulent Transactions

Fraudulent transactions are a trend that is steadily increasing as technology becomes more readily available for individuals to use. Granted, new technology is coming out daily to prevent fraud and help manage the risk for organizations, but deceitful individuals are still able to come up with ways to beat these systems. “The biannual survey of the Association of Certified Fraud Examiners’ (ACFE) found that U.S. organizations lose an estimated 7 percent of annual revenues to fraud” (Ramamoorti & Dupree, 2010, para. 1). This number is staggering, whether the organization is small or large. Proactive monitoring of the risk of fraudulent activity occurring is the best method, but must be continually updated to the ever changing methods that criminals are coming up with. Fraudulent activity is very difficult and expensive to try to...