Enterprise Risk Management Concentration Frequently Asked Questions (FAQ)

What is Enterprise Risk Management (ERM)?

ERM is a rapidly emerging business discipline that provides a process for understanding and monitoring the myriad of risks faced by organizations of all types.  An ERM function within a business entity is designed to identify and assess the various risks across the enterprise that might impact the organization’s core business drivers or new strategic initiatives that drive value for key stakeholders.  By coordinating the risk identification and assessment process, businesses can better understand the full spectrum of risk exposures they face and make informed “risk-intelligent” decisions about how they should conduct day-to-day business operations and plan strategically for the future.

Why should I consider a concentration in ERM?

Risk management is becoming an expected core competency of all individuals who seek to be in executive leadership positions.  Businesses are assigning the “ownership” of certain risks to business unit leaders throughout the organization, holding them accountable for the management of those risks within their areas of responsibility. Thus, if you aspire to ultimately be in a leadership position within an organization you will benefit from formal training related to enterprise risk management. 

The major accounting firms provide risk management advisory services as part of their Advisory Services lines of business and your exposure to ERM increases your value-proposition for those opportunities. But, perhaps your interest is to pursue a career in auditing or tax.  The ERM curriculum helps provide auditors an important strategy and risk foundation that they will draw upon in audit or tax engagement.  For example, auditing standards require the auditor to “obtain an understanding of the entity and its environment to assess the risk that the financial statements might contain a material misstatement.”  Similarly, tax professionals have to have an enterprise view of an organization as they consider tax strategy.  ERM teaches auditors and tax professionals to think about a business from an enterprise and strategic level.

The Enterprise Risk Management Initiative at NC State is recognized globally for its thought-leadership regarding this important topic. The Initiative’s website receives over 190,000 visits per year, consistently high in Google searches related to ERM, and our faculty are highly regarded internationally for their ERM expertise.  That recognition and branding creates a unique opportunity for NC State MAC Students to differentiate themselves in the marketplace.  Augmenting your accounting knowledge with additional coursework in enterprise risk management will also afford you an opportunity to leverage NC State’s reputation and brand in ERM for your benefit as you explore career opportunities with large firms who have developed practice lines focused on advising their clients in the development and implementation of ERM programs, in addition to risk management career opportunities in corporate and government sectors.  

Which CPA Firms offer Risk Advisory Services?

Most of the major professional service firms including each of the “Big Four” firms—Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers— and national and regional firms—Grant Thornton, RSM McGladrey, BDO, Cherry Bekaert—have well developed risk management advisory practices.  Our contacts at these firms report that this is a rapidly growing practice area, and they will be expanding staff devoted to these practice lines over the next few years.  

What are the requirements for an ERM concentration?

In addition to the eight required ACC courses (comprising 22 semester hours of coursework), all MAC students must complete three graduate-level elective courses (9 hours) to earn their MAC degrees.  All ERM concentration students must complete MBA 518—Overview of Enterprise Risk Management in the summer or fall semester and then MBA 519—ERM Practicum (see more information below) and BUS 590—Introduction to Data Analytics.

How is the ERM Practicum (MBA 519) structured?

The ERM Initiative offers an ERM Practicum course whereby teams of three-to-four graduate students who have completed MBA 518 work in a hands-on capacity with executive management of an organization to advance its ERM processes. Students work in a consulting capacity under the direct supervision of one of the faculty in the ERM Initiative at NC State. While the Practicum is customized to meet each organization’s greatest ERM needs, a typical ERM practicum begins with students reviewing the entity’s business model, strategic plan, and a host of other highly-sensitive, confidential documents that help them understand what drives the entity’s strategic success.  With that as a background understanding, students typically conduct face-to-face interviews with the organization’s senior management to obtain their views about the most important risks on the horizon. Following that, the risk information is compiled into a risk inventory database, which the students use to create a risk-ranking survey for management to prioritize the entity’s most important strategic risks.  The final deliverable involves generation of a detailed report outlining the entity’s top tier risks to their business, which the students present to executive management (and sometimes the board). The ERM Practicum is a great example of NC State’s “Think and Do” model.

Where can I learn more about ERM?

Please visit the Initiative’s website, www.erm.ncsu.edu to learn more about ERM and the ERM Initiative at NC State University.