A successful risk management strategy requires a strong internal control environment. The risk control matrix (RCM) format emphasizes that strong and risk-oriented internal control environments are often optimized with automated/manual controls, depending on the situation. An RCM provides an overview of different control objectives that organizations should take into consideration and the corresponding controls to safeguard the company against risks which may arise if not checked timely. Once customized to an organization, this document can help the user in assessing each control. The control assessment can then also be summarized to develop an action plan.
This document outlines risks and controls common to the monitoring of existing contracts aspect of the 11.1.4 Manage Service Contracts
process in a risk control matrix (RCM) format.
Sample risks include:
This document can be used as a sample RCM and is not meant to be an exhaustive list of risks and controls. The KnowledgeLeader team will periodically update this RCM with new content. Organizations should select, update and modify the risks and controls included in this document to ensure that it reflects business operations.
- Business may not take advantage of most economical vendors due to existing contracts and restricted vendor list.
- Employees purposely conceal poor supplier performance due to a conflict of interest.
- Inability to monitor contract compliance, performance and costs.
- Inefficiencies in contract vendors over a period of time resulting in higher costs.
- Involvement in long term contracts where costs do not outweigh the benefits.