MISSING ASPECTS OF THE RISK: SPEED AND DURATION

Yıl 2022, Cilt: 9 Sayı: 1, 12 - 21, 30.03.2022

Gurol Baloglu Kaan Ramazan Cakali

https://doi.org/10.17261/Pressacademia.2022.1541

Öz

Purpose- Risk assessment, risk prioritization and risk responding are vital steps in any risk management process. After risks are identified,
traditional approach allows risk experts to define likelihood and impact factors for these risks. Thus, a risk severity can be defined, and risk
prioritization can be considered under the budget constraints, i.e., cost of implementing remedial measures. On the other hand, recent
events, like digitalization and pandemic, showed that evaluating only these two factors of the risk can be missing. Two important aspects of
the risk are suggested to be considered: speed (velocity) and duration. In this study, these two elements are analyzed.
Methodology- In the study, following an introduction, COSO models and results of the literature review are analyzed. After a theoretical
background and a literature review, a discussion on new aspects of the risk is started. Finally, an imaginary case is used to analyze risks
including all aspects.
Findings- It is realized that in the academic literature, new aspects of the risk have not been addressed yet. This is the reason why these two
aspects defined as missing. At the end, it is concluded that although speed and duration are elements, which directly affect the impact
factors, at the same time, these are key determinants of the timing and structure of the risk responses. Additionally, continuous risk
assessment can be beneficial for the entities to have more time to respond to the risks.
Conclusion- Depending on the findings, it is concluded that all aspects of the risk is needed to be analyzed during risk management processes.
The originality of this study stems from the fact that it includes practical suggestions for integrating the concepts of speed and velocity, which
are conceptually included into the frameworks. In addition, this study presents a perspective by associating the concepts of agility, resilience,
and continuous risk assessment.

Anahtar Kelimeler

Risk assessment, COSO, risk management, internal control, internal audit

Kaynakça

• Amini, A. & Jamil, N. (2018). A comprehensive review of existing risk assessment models in cloud computing. Journal of Physics: Conf. Series 1018 (2018) 012004.
• Baloğlu, G. (2019). İç denetim için çeviklik: Türk finans sektöründeki bir işletme üzerinde inceleme. Journal of Accounting Institute, (60), 37- 46.
• Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2017). Enterprise Risk Management: Integrating with Strategy and Performance. Jersey City, NJ: AICPA.
• Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2013). Internal Control – Integrated Framework. 220 Leigh Farm Rd., Durham, NC.
• Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2004). Enterprise Risk Management – Integrated Framework. New York: AICPA.
• Committee of Sponsoring Organizations of the Treadway Commission (COSO). (1994). Internal Control – Integrated Framework. Two-volume edition. Jersey City, USA.
• Davis, S., Lukomnik, J. (2009). Risk velocity, the unknown dimension in ERM [online]. Retrieved from https://www.complianceweek.com/riskvelocity-the-unknown-dimension-in-erm/19623.article [Date Accessed: February 3, 2022].
• Deloitte. (2011). Risk management: Thriving in uncertain times by creating a risk intelligent enterprise [online]. Retrieved from https://www2.deloitte.com/content/dam/Deloitte/za/Documents/risk/ZA_RA_RiskManagement_ThrivingInUncertainTimes_2015.pdf [Date Accessed: February 1, 2022].
• Hall, H. (n/a). How to evaluate risk velocity [online]. Retrieved from https://projectriskcoach.com/how-to-evaluate-risk-velocity [Date Accessed: February 3, 2022].
• Harrington, W. N., Kackos, C. M., Webby, R. J. (2021). The evolution and future of influenza pandemic preparedness. Experimental & Molecular Medicine, 2021:53, 737-749.
• Manthrirathna M.A.K.S., Rajini, D. & Gowsiga, M. Supply Chain Risk Assessment of Sri Lankan Apparel Manufacturing Organizations. Conference: 8th International Conference on Management and Economics 2019. At: Sri Lanka.
• Nichols, C. (2016). What banks need to know about the velocity of risk [online]. Retrieved from https://www.linkedin.com/pulse/what-banksneed-know-velocity-risk-chris-nichols/ [Date Accessed: February 2, 2022].
• Osundahunsi, A. (2012). Effective project risk management using the concept of risk velocity, agility, and resiliency. PMI® Research and Education Conference, July 18, 2012, Limerick, Munster, Ireland. Newtown Square, PA: Project Management Institute.
• Palin, E. J., Oslakovic, I. S., Gavin, K., Quinn, A. (2021). Implications of climate change for railway infrastructure. WIREs Climate Change, 2021:12:e.728.
• Pascarella, G., Rossi, M, Montella, E., Capasso, A., De Feo, G., Botti Snr, G., Nardone, A., Montuori, P., Triassi, M., D’Auria, S., Morabito, A. (2021). Risk analysis in healthcare organizations: Methodological framework and critical variables. Risk Management and Healthcare Policy, 2021:14, 2897-2911.
• Ramamoorti, S., Wanserki, J. H., Stover, R. (2019). The velocity of risk. Internal Auditor, LXXVI: II, 20-21. Rana, J. S. & Pitroda, J. R. (2021). Risk analysis and mitigation technique in Indian transportation industries: A review. RT&A, Special Issue, (60)16, 132-142