Description of the Book
Title: “Assessing and Managing Strategic Risks: What, Why, How for Internal Auditors”
Authors: Richard J. Anderson and Mark L. Frigo
This book is designed to help Chief Audit Executives (CAEs), Directors of Risk Management, Executive Teams and Board Members to assess and manage strategic risks. The book was based on research performed in the Strategic Risk Management Lab, part of DePaul’s Center for Strategy, Execution and Valuation. The purpose of the book is to provide internal auditors with the knowledge and tools to better address strategic risks in their risk assessment and audit planning processes, and to help their organizations identify and manage these critical risks. While the book discusses key concepts and possible roles and activities for internal audit related to strategic risks, the primary focus of the book is on two key processes: the assessment of strategic risks and strategic risk management. It includes a number of tools and methodologies that were developed by the authors and applied in the DePaul MBA course on Strategic Risk Management in the Center for Strategy, Execution and Valuation and in the School of Accountancy and MIS internal auditing classes at DePaul. These tools and methodologies have been proven in practice including frameworks on strategy (Return Driven Strategy) and strategic risks (Strategic Risk Management) and a strategic risk assessment methodology. Also included are interviews and practical recommendations from both chief auditors and board members. The book has received outstanding endorsements from business leaders and academics including: Dennis Chookaszian, Former Chair and CEO of CNA Insurance Companies, former Chair of Financial Accounting Standards Advisory Council (FASAC) and Larry E. Rittenberg, PhD, CIA, CPA, Emeritus Professor of Accounting, University of Wisconsin
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The Book Includes Interviews with Chief Audit Executives (CAEs), Directors of Risk Management, and Board Members
We conducted interviews with leading chief audit executives (CAEs), directors of risk management, and board members, and have included question-and-answer sidebars to present additional insight and perspective from these leaders, including: Dennis Chookaszian, Chicago Mercantile Exchange (Board of Directors) Rob Gould, Harley-Davidson Bob Hirth, Protiviti and Chair of the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Hans Læssøe, The LEGO Group Paul Sobel, Georgia-Pacific
Endorsement by a Leading Board Member
“In this book, the authors present applications of a strategic risk assessment process and related frameworks and tools, which have been vetted by management teams, internal audit teams, and boards of directors. The Return Driven Strategy Framework is presented as a lens for understanding the strategy of an organization as a first step in strategic risk assessment. The Strategic Risk Management Framework provides a lens for understanding strategic risks and their interrelationships. The book draws on the pioneering work of the authors in the Strategic Risk Management Lab at DePaul University in Chicago. It includes real-world examples, interviews of board members, CEOs, and CAEs, as well as insight from the authors based on their experiences in applying the frameworks and tools in risk assessment and risk management. This is a book that should be read by CAEs, internal auditors, as well as board members. I highly recommend this book.”
—Dennis Chookaszian
Board of Directors, Chicago Mercantile Exchange and a number of other boards.
Former Chair and CEO of CNA Insurance Companies
Former Chair of Financial Accounting Standards Advisory Council (FASAC)
Structure of the Book
The structure of the book is as follows:
■ Chapter 1: Introduction, Objectives, and Overview of the Book This chapter introduces the key concepts, definitions, and the linkages between strategic risks and strategic risk management.
■ Chapter 2: Internal Audit Roles and Activities This chapter discusses how to align internal audit activities with the expectations of its key stakeholders and possible roles related to various stakeholder expectations.
■ Chapter 3: The Strategic Risk Assessment Process This chapter describes the seven-step strategic risk assessment process developed by the authors and used at the DePaul Strategic Risk Management Lab by internal auditors and by boards and executive teams to assess strategic risk and understand the connection between strategy and risk.
■ Chapter 4: The Supporting Frameworks This chapter describes the Return Driven Strategy Framework and the Strategic Risk Management Framework, which are useful tools to internal auditors in executing the strategic risk assessment methodology.
■ Chapter 5: The Black Swans—Assessing and Preparing for Unexpected Extreme Risk Events This chapter discusses the major risk events and approaches that internal auditors and their organizations can use to assess and prepare for these risks.
■ Chapter 6: Strategic Risk Assessments—Tools and Examples This chapter contains other tools that could be utilized during the strategic risk assessment, such as heat maps and strategy maps.
■ Chapter 7: Strategic Risk Management—an Overview This chapter presents an overview of the strategic risk management process.
■ Chapter 8: Strategic Risk Management—Tools and Examples
■ This chapter discusses other tools, such as action plans, that can assist internal auditors in assessing or advising on strategic risk management processes.
■ Chapter 9: Summary—Putting It All Together
