It all begins with Governance!
Our services evolve around “governance,” which we define as the decision-making process of directing, managing and monitoring a company with the goal of protecting and creating shareholder value while also protecting the interests of key stakeholders such as customers, communities, creditors, employees, suppliers and regulators. This is a loaded definition that strikes to the essence of an organization’s success. We help organizations navigate the governance process through training, advice, support, and internal assurance services. However, it all starts with a recognition of what governance means to the organization followed-up with an independent risk assessment. A risk assessment without tackling governance and culture is likely to lack the impact needed for real change. Call upon us to obtain a candid read on your governance and culture, with recommendations to keep you ahead of the competition.
Risks and Opportunities are Two-Sides of the Same Coin
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) published its Enterprise Risk Management - Integrating with Strategy and Performance (ERM) framework in 2017 to help organizations identify and manage the ambiguity, complexity and volatility of their business world. The COSO ERM Framework defines risk as the possibility that events will occur and affect the achievement of strategy and business objectives. All organizations face uncertainty, but not all confront their risks and opportunities head-on thus jeopardizing shareholder value.
Kral Ussery offers an array of independent risk assessment services ranging from organizational-wide to specific operating, compliance or reporting objectives. This provides both the boardroom and management with an objective glimpse into both internal and external risks and opportunities. We can also assist in developing a robust risk management program including a strong fraud risk management component and cybersecurity component.
COSO’s Enterprise Risk Management - Integrating with Strategy and Performance (ERM) framework
We leverage COSO’s ERM Framework, which consists of the following five components, as well as twenty supporting principles:
Due Diligence and Quality of Earnings ReportsProviding independent advisory and internal assurance services strikes at the heart of our existence. We believe it is in the best interest of our clients to hear candidly our conclusions rather than marching towards a predetermined conclusion without any real insights. This attitude is central to our due diligence efforts, including quality of earnings reports. A quality of earnings report is not an audit where the emphasis is on the balance sheet. Rather, a quality of earnings report offers a detailed analysis of revenue and expense components with the primary objective to assess the sustainability and accuracy of historical earnings, as well as the achievability of future projections. In order for an earnings measure to be considered ‘high quality’ it must reflect commercial cash flows that are sustainable. Another important consideration is the identification of concentrations and operational risks that can challenge cash flow sustainability.
Our approach is to view each quality of earnings engagement as if we were investing our own money into the target business and validating our investment thesis. In performing our analysis, we identify the components of historical earnings in conjunction with the prospects for future earnings and cash flows. High-quality earnings are readily repeatable over multiple reporting periods rather than earnings that are reported as one-time events or tied to related party transactions. In order for an earnings measure to be considered ‘high quality’ it must reflect commercial cash flows that are sustainable. Call upon us the next time you are in need of due diligence efforts, including a quality of earnings report.
A Summary of Risk & Opportunity Assessment Services
Our risk assessment knowledge and tools can help you unlock previously unknown opportunities to protect and grow shareholder value. Contact us now to learn how to start.
Until you spread your wings you’ll have no idea how far you can fly