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Teaching Risk
Assessment
William
Shenkir
University of Virginia
Executive
Summary
Risk assessment
is one of the new service areas identified by the AICPA
Special Committee on Assurance Services (Elliott
Committee) as having the greatest immediate potential for
generating high revenues for professional service firms.
With funding received from the Coopers & Lybrand
Foundation in September 1996, Professor William G. Shenkir
and Assistant Professor Paul L. Walker developed an
approach to teaching risk assessment.
The course is
divided into the following components:
- Introduction
and framework which includes risk frameworks, control
frameworks, value chain analysis, balanced scorecards
and critical performance indicators;
- Managing the
enterprise, strategy and risk management, a field visit
to a company, building an ethical climate, crisis
management, risks and the virtual corporation, the role
of risk control officers, and study of some recent risk
debacles;
- Benchmarking
and risk assessment;
- The marketing
function, which includes two cases on sales activities
and risk management;
- The finance
function, which focuses on derivatives as a means to
managing risks;
- Information
systems and risk;
- Case studies
in risk assessment, which focuses on the risk assessment
projects undertaken by the students.
Through the
content outlined, students are exposed to a variety of
organizations. They learn how to identify risks, assess
risks, and build solutions and metrics to both control and
monitor that risk. They see risks from the top-strategic
levels all the way down to risks embedded in various
processes. They also learn how to use various tools to
assist in these engagements including: risk identification
frameworks, risk questionnaires that could be used on
engagements, value chain analysis, business process
decomposition, and benchmarking. They get the opportunity
to apply their skills and tools in various modules and
papers throughout the course. Finally, students develop
their creative problem-solving and consultative skills.
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