The Implement of COSO Enterprise Risk Management in Banking Sector

Abstract

Every organization faces risks that threaten its existence and reputation, whether private, public or not-for-profit, and regardless of size. The need to manage these risks has become an issue of international importance and much effort has been made in this area to institutionalize risk management procedures. In response to this, COSO published Enterprise Risk Management (ERM) – Integrated Framework in 2004. This ERM framework includes ERM components, principles and concepts, demonstrates a common ERM language, and provides clear direction and guidance for enterprise risk management. In 2016 COSO has published the COSO ERM Integrated Framework. The framework further expands on internal control by paying particular attention to the broader subject of ERM. This research aims to find out how the implementation of COSO in risk management in the banking sector. This research was conducted using data collection methods using library research, namely by browsing the literature containing theories from scientific works, both published and unpublished in the form of hard copies or soft copies in books, papers, and online journals. The results of this study are the integration of the five components of internal control with ERM provides assurance for management that organizational goals will be achieved effectively and efficiently including preventing fraud in banking sector.