Implementing Enterprise Risk Management (ERM) at Entropic Communications, Inc

Running head: ADVANCED MANAGEMENT ACCOUNTING
Advanced Management Accounting
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1ADVANCED MANAGEMENT ACCOUNTING
Memo
To: Board of Directors
From:
Date: 07th January 2019
Subject: Entropic Communications, Inc Implementing Enterprise Risk Management (ERM)
Entropic was publically traded from the year 2007 on NASDAQ and was incorporated
in the year 2001, at Delaware. The memo is been written to provide an overview on the
implementation of processing of Enterprise Risk Management. While going the case I found
that Entropic is taking an immense initiative to implement ERM in order to wipe off the risk
that is seen in today`s modern era. According to the review of current status of ERM process,
I felt that some changes or improvement of implanting the ERM process is needed. The
memo is designed stating the need of ERM by Entropic, its future possibility with the
framework of COSO (Committee of Sponsoring Organizations). The memo is concluded with
the suggestions for effective implementing the ERM with its future prospects.
Implementation of a formal Enterprise Risk Management (ERM) Process
The scandal that light up the focus of Sarbanes-Oxley Act relating to the reporting of
accounting along with the internal control in 2010. This call for the urgent need of managing
to control the various risk. The documents were arranged according to the framework of
Sponsoring Organizational of the Treadway Commission (COSO) by the managers. Standard
and Poor’s Rating Services (S&P) had unified risk managing into their scores for monetary
along with the insurance corporations since 2005. The statement amended by the SEC require
further discussion on the role of board. The new standards enrolled y SEC created pressure on
the administrations to design a way out to control the risk. As the surroundings of Entropic

2ADVANCED MANAGEMENT ACCOUNTING
favoured the implement of ERM to full fill the duties of boards of directors. Operational and
strategic risk were a part of discussion of quarterly meetings including of need of SEC filing.
The ERM outline was intended to bring into line a company’s actual risk experience with its
risk craving.
Current ERM Process with COSO Framework
The COSO Enterprise Risk Management – is defined as a process to help the
organization in identifying and managing the event that is related to risk. The six component
of the COSO ERM framework helps in managing along with providing the reasonable
assurance to meet the objectives. The components are:
 Event identification
 Risk assessment
 Risk response
 Control activities
 Communication
 Monitoring.
It is not vibrant which of the ERM apparatuses listed overhead must add importance
or that apparatuses shall add value at most. Alviniussen & Jankensgard, (2015) show that
accepting and applying ERM is a procedure that comprises a substantial extent of time
and can stretch over a few years. This would propose reviewing the earlier apparatuses
since they are additional probable to be applied than the last ERM apparatuses.
Additionally, one study has shown that corporations revealing ERM tend to reveal the
earlier apparatuses of ERM. Cohen, Krishnamoorthy, & Wright, (2017) shows that the
organization deliver the most evidence on COSO ERM apparatuses such as setting of
objectives, identifying along with assessing the risk and internal environment. Soin &