The Effect of the 2007/2008 Financial Crisis on Enterprise Risk Management Disclosure of Top US Banks

We document the effect of the 2007/2008 financial crisis on the volume and the quality of enterprise risk management （ERM） disclosure in the annual reports of the largest US banks, and analyze its determinants. Using a content analysis approach of the annual reports form 10-K for the years 2006, 2007, 2008, and 2009, we find that the ERM disclosure is significantly and positively associated with the crisis, bank size, board independence, duality and significantly and negatively associated with profitability, leverage, and board size. This paper seeks to fill a gap in the literature by investigating the effect of the crisis on ERM disclosure in the US banking sector context, and gives an insight into the factors affecting risk disclosure practices during the financial crisis.

A REVIEW OF ENTERPRISE SUPPLY CHAIN RISK MANAGEMENT

This paper reviews enterprise risk management practices in the context of supply chains. Starting with the importance of managing supply chain risks, the paper established the benefits of managing risks using an enterprise-wise integrated approach. The rest of the paper then presents a practical framework for enterprises to manage risks in their extended supply chains.

Establishment of Effective Internal Audit Function： Recommendations for Best Practice

This paper^1, which is in the light of the last trends in internal auditing, aims to explain the challenges and major issues in establishment of an effective internal audit （IA） function to achieve value-added IA activities as a value-added service center. This paper also discusses the current internal auditing environment in Turkey considered for the needs and expectations of stakeholders and new legislations. In the next five years, five emerging activities for internal auditing may be taken into consideration, namely, the review of corporate governance process, auditing of enterprise risk management （ERM） processes, addressing linkage of strategy and company performance, the ethics audits, and the migration to International Financial Reporting Standards （IFRS）, they will be the major focus areas for internal auditing. The qualifications of IA staff, status within the corporation, setting up of the functional and administrative reporting lines, relationship with the audit committee of the board of directors, and the content of IA charter must be sufficient for assurance of the IA function＇s effectiveness and objectivity. The effective communication channels among management, audit committee, and IA become more important and must be operated in a consistent manner that accurately contributes to preventing potential future financial crisis and the effectiveness of risk management （RM）. Ten main imperatives of change for IA can be summarized as emphasizing RM and governance, addressing key stakeholder priorities, and optimizing IA resources. Based on professional practices, international standards of Institute of Internal Auditors （IIA）, best practices, and the relevant recommendations have been made by the authors for practitioners and stakeholders.

Managing obsolescence of embedded hardware and software in secure and trusted systems

Obsolescence of integrated systems which contain hardware and software is a problem that affects multiple industries and can occur for many reasons,including technological,economic,organizational,and social factors.It is especially acute in products and systems that have long life cycles,where a high rate of technological innovation of the subcomponents result in a mismatch in life cycles between the components and the systems.While several approaches for obsolescence forecasting exist,they often require data that may not be available.This paper describes an approach using non-probabilistic scenarios coupled with decision analysis to investigate how particular scenarios influence priority setting for products and systems.Scenarios are generated from a list of emergent and future conditions related to obsolescence.The key result is an identification of the most and least disruptive scenarios to the decision maker’s priorities.An example is presented related to the selection of technologies for energy islanding,which demonstrates the methodology using six obsolescence scenarios.The paper should be of broad interest to scholars and practitioners engaged with enterprise risk management and similar challenges of large-scale systems.