Public Sector Enterprise Risk Management: Advancing Beyond the Basics by Kenneth C. Fletcher & Thomas H. Stanton

Author:Kenneth C. Fletcher & Thomas H. Stanton [Fletcher, Kenneth C. & Stanton, Thomas H.]
Language: eng
Format: epub
ISBN: 9781138333178
Google: BplcwAEACAAJ
Goodreads: 45005145
Publisher: Routledge
Published: 2019-01-15T12:59:16+00:00

Comparison No. 1: Terminology and Translation

The meaning of the terminology used in the ERM and internal control disciplines is specific and unique to the respective discipline. Because internal control is a product of the need for fiscal transparency and financial accountability, the language associated with it tends to align to the language of the accounting and audit communities. ERM, having flourished through the C-suite with a focus on key risks to the organization’s mission, strategy and strategic objectives, leans towards a lexicon that is more broadly focused and applicable to executive leadership regardless of the discipline.

Challenge: The language used within finance and accounting does not easily translate with the same meaning to other parts of the organization. The same translation issues can occur between other organizational divisions where terminology or specialization is high, such as engineering or research.

Implication: When technical language or terminology is used, the relevance and importance of the topic may be lost in translation. Depending on their familiarity with ERM and internal control concepts, laypersons may misinterpret the intent or objectives without proper clarification. The terminology used when discussing risks and controls is particularly confusing and brings its own baggage. The unfortunate implication of this challenge is that building executive buy-in and support for strategic involvement is difficult and can often lead to a myriad of challenges, including inadequate resources allocated to the organization’s enterprise risk management function.

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