Making an Effective Risk Assessment Plan

At a glance:

• The main takeaway: Undertaking an initial financial reporting risk assessment and establishing effective risk assessment plans are crucial steps for non-profit organizations that want to manage and protect their financial resources.
• The impact on your business: Having an effective risk assessment plan and predetermined procedures in place is critical for preventing the misuse or mismanagement of vital financial resources.
• Next steps: Non-profit organizations should take the insights from this piece and follow the initial steps outlined within to help strengthen, establish and inform their financial risk management.

Schedule a consultation with Aprio’s non-profit specialists today.

The full story:

The management and protection of financial resources is a crucial concern for all non-profit organizations. By undertaking an initial financial reporting risk assessment, an organization is more likely to achieve its mission and become more effective in its operations. The risks in financial management include any events which would cause the organization to experience an overall loss in value or the loss of one or more assets. This event is most often the embezzlement of funds, but can also include burglary, swindling and forgery.

All non-profit organizations (both large and small) need to have a plan of action in place to assess risks as a mechanism to prevent the occurrence of unexpected adverse events. Having a strong organizational leadership cannot eliminate the chance of these events happening. It is therefore necessary to take the time to assess risks to minimize the impact of any major obstruction, as well as the progress of any ongoing projects.

A Risk Assessment involves the following steps:

• Identify and analyze the risks related to accomplishing objectives across the organization, and subsequently analyze these risks as a method for determining the best way in which to manage them.
• Manage each risk by considering the potential for fraud in the assessment of the aforementioned risks. This involves identifying any gaps in already-established internal controls for the purposes of preventing fraud.
• Identifying changes which could have a significant impact on internal controls as related to both financial reporting and operations.

Contact Aprio today to learn more about Risk Assessment and make sure that your organization is best prepared for any uncertain event.

Related Resources:

Bi-Annual Survey Reports on Occupational Fraud Statistics and the Success of Internal Controls, Among Many Other Findings

GAAP Accounting for Third Party Reimbursements: Contributions vs. Exchange Transactions

4 Most Common Red Flags for Employee Expense Fraud