Smart Risk Assessment for Compliance Risk

Abstract

Successful management of compliance risk lies at the heart of the compliance mission statement. Practical efforts to develop and expand upon existing methodologies are ongoing, with the goal of identifying and being able to put in place effective systems. Maik Ebersoll and Florian Stork offer their insight on the quest for a pragmatic, economically efficient risk assessment process that is reasonable, comprehensive and sustainable. Their “Smart Risk Assessment” was developed in practice in the world of corporate business, gas and engineering, and therefore approaches this issue from a wholly practical perspective, aiming to reconcile the conflicting goals of (i) efficient use of resources, and (ii) meeting the requirements of an appropriate Compliance Management System. In this article, the background to this particular risk-based methodology is provided and its stages explained step-by-step through a clear and instructive case study. Within this, the authors argue their case on why this approach, based around screening procedures, provides greater efficiency and they let us benefit from consideration of a methodology which has been developed out of existing approaches, been tried and tested in a practical sense and found to be effective.