The Risk of Trading: Mastering the Most Important Element in Financial Speculation

A BRIEF HISTORY OF THE LEGISLATION

The SOX Act brought new regulation to corporate board member responsibilities, oversight of accounting practices, corporate governance, fraud, internal controls, and enhanced financial disclosure. While there are debates over the effectiveness of the actual bills, mostly from cash-strapped companies that find the cost of SOX compliance to be more expensive than paying the fines, the need for managing risk has bubbled to the surface as one of the must-do's on the corporate budget sheets. Many companies that are not required to comply with SOX attempt to be within compliance due to the best-practice models inherent in the act's bylaws. Other risk control standards, such as the SSAE 16 assessment championed by the CPA community, also adjusted their prize audit standards in an effort to put on a cleaner pair of SOX.

Since the meat of the act involved the proactive identification, assessment, control, financing, and monitoring of risks, what better individual to implement such a monster than your risk management professional. Since 2002, a more holistic form of risk management known as enterprise risk management (ERM) has grown in popularity. Rather than just identify problems, the ERM specialist can also be viewed as a process improvement and efficiency resource that can assist in improving the bottom line. Technology, database management, data analytics, and the use of data-driven decision making has also resulted in a greater acceptance of the ERM ...