Risk Management Policy

1.1 Purpose

The purpose of this policy is to establish a systematic approach to identifying, assessing, mitigating, and monitoring risks that could impact the operational, financial, regulatory, and reputational integrity of Charity Accounting Partners. Our risk management framework ensures business resilience and regulatory compliance.

1.2 Scope

This policy applies to all business activities, client engagements, employees, contractors, and third-party vendors associated with Charity Accounting Partners.

1.3 Risk Management Framework

Charity Accounting Partners adopts a four-stage risk management framework:

1. Risk Identification

• Regularly assess potential risks in finance, operations, technology, legal compliance, cybersecurity, and market conditions.

• Conduct risk mapping exercises to highlight potential vulnerabilities.

• Document all identified risks in a Risk Register, categorising them as strategic, operational, financial, or compliance-related.

2. Risk Assessment and Analysis

Each identified risk is evaluated based on:

• Likelihood (low, medium, high).

• Impact (negligible, moderate, severe).

• Risk Exposure (combination of likelihood and impact).

A Risk Matrix is used to categorise risks into the following levels:

1. Low Risk – Routine monitoring.

2. Medium Risk – Mitigation plans required.

3. High Risk – Immediate action and escalation.

3. Risk Mitigation and Controls

For high and medium risks, mitigation strategies may include:

• Financial Controls: Internal audits, segregation of duties, dual approval for transactions.

• Cybersecurity Measures: Encrypted databases, two-factor authentication, secure remote access.

• Operational Strategies: Contingency planning, process automation, and staff training.

• Regulatory Compliance: Regular legal assessments, policy updates, and external audits.

4. Risk Monitoring and Review

• The Risk Register is reviewed quarterly to track risk trends and effectiveness of mitigation strategies.

• High-risk areas are stress-tested through scenario planning (e.g., cybersecurity breach simulations, financial fraud testing).

• A Risk Oversight Committee may be established for oversight of major risks.

1.4 Key Risk Categories and Controls

Risk Category Examples Mitigation Strategies

Financial Risk Fraud, revenue loss, cash flow issues Strong internal controls, fraud prevention measures, financial audits

Operational Risk Service delivery failure, client disputes Contingency plans, clear service-level agreements (SLAs), client satisfaction tracking

Regulatory & Compliance Risk Non-compliance with AML, GDPR Regular compliance checks, staff training, legal review

Cybersecurity Risk Data breach, hacking, ransomware IT security protocols, penetration testing, backup and disaster recovery plans

Reputational Risk Negative press, client dissatisfaction Crisis management strategy, transparent communication, media training

For any queries regarding this policy, please contact us at support@charityaccountingpartners.co.uk.

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Last updated: February 2025