{"id":6493,"date":"2010-04-08t15:57:18","date_gmt":"2010-04-08t19:57:18","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=6493"},"modified":"2024-11-19t21:48:32","modified_gmt":"2024-11-20t02:48:32","slug":"how-three-little-letters-might-have-prevented-the-global-financial-meltdown","status":"publish","type":"post","link":"\/\/www.g005e.com\/2010\/04\/08\/how-three-little-letters-might-have-prevented-the-global-financial-meltdown\/","title":{"rendered":"how three little letters might have prevented the global financial meltdown"},"content":{"rendered":"

cpas could help help avert the next financial catastrophe by joining the new multi-disciplinary movement for governance, risk and compliance.<\/strong><\/p>\n

by rick telberg<\/em><\/p>\n

not too long ago, cpa norman marks was sitting through a conference on the emerging issues in governance, risk and compliance (grc). he listened for two days as dozens of speakers and panelists \u2014 consultants, internal auditors, independent accountants, vendors, lawyers, and others \u2014 sought to define \u201cgrc.\u201d marks counted 23 different definitions.<\/p>\n

\"\"
marks<\/figcaption><\/figure>\n

so what, exactly, is grc? and why do corporate finance cpas need to\u00a0care?<\/p>\n

you only need to go as far as the front pages of the newspaper to understand why grc is surging as a new corporate discipline and professional practice. if the wall street crash taught us anything, it\u2019s the importance of sound corporate governance, hard-nosed risk management and serious regulatory compliance.<\/p>\n

to grc proponents like marks, it\u2019s just a pity that it\u2019s all coming too late. to be sure, some few companies are not waiting for new government regulation to avert a catastrophic failure on their watch. but most have yet to get the message. according to the \u201creport on the current state of enterprise risk oversight,\u201d co-sponsored by north carolina state university and the aicpa, 60 percent of companies still have no formal enterprise-wide approach to risk management, and three-quarters of the time, management is not informing the board of directors of the company\u2019s risk exposures.<\/p>\n

\u201cif the financial crisis has taught us anything, it\u2019s how critical it is to link a holistic, comprehensive view of risk management with management and strategy,\u201d marks was saying from his home office, where you\u2019ll find on his wall a framed article from the november 1998<\/a> journal of accountancy<\/em> featuring his ideas on internal auditing. today marks is vice president at sap businessobjects as \u2014 using his own terminology \u2014 an \u201cevangelist\u201d for \u201cthe grc market.\u201d but really, he\u2019s a man on mission. he maintains two blogs on the subject, one personal<\/a> and the other for the institute of internal auditors<\/a>, where he\u2019s also a member of the professional issues committee and a contributor to the association magazine. with his help, grc is morphing from a market into a movement.<\/p>\n

insiders have yet to really agree on what grc means. john h. capobianco, president and ceo of lumigent technologies, a grc business apps developer, says the term grc has been kicked around so much that it \u201cmeans nothing to everybody or everything to nobody.\u201d<\/p>\n

the questions abound:<\/p>\n