This book outlines risk management theory systematically and
comprehensively while distinguishing it from academic fields such as
insurance theory. In addition, the book builds a risk financing theory
that is independent of insurance theory.
Until now, risk management (RM) theory has been discussed while the
framework of the theory has remained unclear. However, this book, unlike
previous books of this type, provides risk management theory after
presenting a framework for it.
Enterprise risk management (ERM) is seen differently depending on one's
position. For accountants, it is a means for internal control to prevent
accounting fraud, whereas for financial institutions, it quantifies the
risk that administrators can take to meet supervisory standards.
Therefore, most of the ERM outlines are written to suit the intended
uses or topics, with no systematic RM overviews. This book discusses a
systematic RM theory linked to the framework of it, unlike previous
books that were written according to topic.
After the Enron scandal in December 2001 and WorldCom accounting fraud
in June 2002, several laws were enacted or revised throughout the world,
such as the SOX Act(Sarbanes-Oxley Act) in the United States and the
Financial Instruments and Exchange Law and Companies Act in Japan. In
this process, the COSO(Committee of Sponsoring Organizations of Treadway
Commission) published their ERM framework, while the ISO (International
Organization for Standardization) published their RM framework. The
author believes that the competition between these frameworks was an
opportunity to systematize RM theory and greatly develop it as an
independent discipline from insurance.
On the other hand, the Great East Japan Earthquake that occurred on
March 11, 2011, caused enormous losses. Also, because pandemics and
cyber risks are increasing, businesses must have a comprehensive and
systematic ERM for these risks associated with their business
activities
