Expert verified
| TL;DR Summary: |
| Risk advisory helps you spot problems before they happen. It protects your business from cyber threats, fraud, and regulatory penalties. ERM is a structured way to manage all your risks together, not in silos. Cyber risk, regulatory shifts, and supply chain disruptions are India’s top threats. Risk advisory looks forward. Internal audit looks backward. CA firms offer ERM, fraud risk, compliance, and cybersecurity advisory services. PKC India delivers internal audit, GRC, IFC, and outsourced CFO services. Good risk management turns uncertainty into a competitive advantage. |
Risk advisory services in India help businesses identify, assess, and manage financial, operational, regulatory, and fraud risks before they cause damage – going beyond internal audit by designing the right risk framework, not just testing whether existing controls worked. CA firms like PKC deliver ERM implementation, GRC advisory, IFC/RCM development, and fraud risk frameworks that give Indian businesses board-level visibility into their risk exposure across compliance, cybersecurity, supply chain, and financial governance.
Risk advisory services in India have become a priority, as businesses work to address stricter regulatory requirements and manage growing operational, financial, and compliance risks.
This blog delves deep into what risk advisory is, how ERM frameworks apply in India, the key risk types businesses face and how it connects to internal audit. You also understand how CA firms structure these services.
What Is a Risk Advisory?
Risk advisory is the professional practice of helping organisations identify, assess, and manage risks that could affect their operations, finances, compliance, or reputation. The risks managed can be financial, operational, regulatory, or strategic in nature.
The core purpose of risk advisory is to help decision-makers spot problems before they happen and put systems in place to prevent them or reduce their impact.
When compared to traditional auditing, the role of risk advisors is wider.
While a statutory auditor looks backwards at what happened, a risk advisor looks sideways and forwards, at what is happening in your systems and processes, and what could go wrong next quarter or next year. This expert tells you where you are exposed and what you need to do about it.
Risk advisory is also not the same as internal audit.
Internal audit looks back, it checks whether controls worked. Risk advisory looks forward: it helps you prepare for what might happen. A risk advisor does not just tell you what went wrong. They tell you what could go wrong and how to stay ahead.
In India, risk advisory has become more critical than ever. Estimates suggest that the India enterprise risk management market valued at USD 490.60 million in 2024 is expected to grow at over 16% annually to reach USD 2.18 billion by 2034.
Reasons for this growth are multiple such as rapidly changing customer markets, increase in regulatory oversight, increase in cyberthreat and other global/ political situations. Companies that don’t actively account for these scenarios, may pay a hefty price.
Good risk advisory covers multiple areas such as:
- Financial risk advisory identifying exposures in credit, liquidity, and market risk
- Operational risk advisory examining processes, controls, and systems for failure points
- Regulatory and compliance risk advisory mapping obligations under SEBI, RBI, MCA, FSSAI, or other applicable regulators
- Fraud risk advisory designing controls and investigation frameworks to detect and prevent financial fraud
- Strategic risk advisory evaluating risks tied to business decisions such as geographic expansion, acquisitions, or new product lines
Not every business needs all of these. For example, a mid-size manufacturing firm may prioritise operational and regulatory risk, while a listed company will need fraud risk and financial controls advisory on top of that.
The starting point is always a risk assessment, understanding what your business is exposed to before deciding what to address.
Enterprise Risk Management (ERM) Framework
Enterprise Risk Management, or ERM, is a structured approach to identifying and managing risks across your entire organisation, not just within individual departments.
Instead of treating risks in silos like finance handling financial risks, IT handling cyber risks, operations handling supply chain risks, ERM looks at everything together.
ERM is crucial because a single event can trigger multiple risks.
A geopolitical crisis can disrupt your supply chain, cause currency volatility, and trigger regulatory changes all at once. If you manage each risk separately, you miss the connection. ERM prevents that and gives you a holistic view.
An ERM framework usually includes several components:
- Identify risks: what could go wrong?
- Assess them: how likely are they, and how much damage could they cause?
- Prioritise: which risks need attention now?
- Mitigate: what actions will you take?
- Monitor: are your actions working, and have new risks emerged?
The framework is a continuous process. Risks change and so does your business. ERM adapts to you.
In India, ERM is not legally mandated, but regulators are increasingly expecting it.
The Companies Act, 2013 requires organisations to identify and manage risks that could affect operations and stakeholders.
For listed companies, the Companies Act 2013 and SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations both require boards to oversee risk management and ERM provides the structure for meeting those obligations.
Increasing regulatory pressures and digitalization are compelling Indian businesses to implement integrated risk management frameworks that consolidate compliance, cybersecurity, and financial governance under a unified strategic umbrella.
COSO ERM Framework
This is the most widely referenced standard globally and has 5 components and 20 principles. It takes a broad, strategy-aligned view of risk across the enterprise, answering the question: are we managing risk to strategy and performance?
Its five components are:
| COSO Component | What It Means in Practice |
| Governance and Culture | Board sets the risk appetite; leadership communicates it downward |
| Strategy and Objective Setting | Risk is considered before strategic decisions are finalised |
| Performance | Risks are identified, assessed, and assigned owners at the operating level |
| Review and Revision | The risk register is updated periodically; emerging risks are incorporated |
| Information and Communication | Risk information flows up to the board and across functions regularly |
In India, COSO is the reference framework for most large businesses and is the basis on which Big 4 and mid-tier firms design ERM programmes.
Most Indian companies already have some risk management in place: an internal auditor, a compliance officer, an IT security team. But these functions often work independently. ERM connects them under a single framework with common language, shared ownership, and board-level reporting.
For companies planning an IPO, pursuing institutional funding, or operating across multiple states, an ERM framework is essential. Investors and lenders increasingly expect clear evidence of a systematic approach to identifying and managing risk.
Key Risk Types Indian Businesses Face
Indian businesses face a complex and evolving risk exposure.
The ICICI Lombard–IRM India Enterprise Risk Perception Survey 2025, which gathered feedback from over 250 organizations, shows that risks are becoming more interconnected and harder to manage in isolation.
Here are the key risk types you need to understand:
Supply Chain and Operational Risks
Operational risks have real business consequences. Process failures, over-reliance on key personnel, undocumented procedures, and weak vendor oversight can cause inventory loss, production disruptions, contract breaches, and billing errors.
Supply chain risk is another growing concern. India’s reliance on imports for critical materials, such as pharmaceutical ingredients and rare earth elements, leaves many businesses vulnerable to external disruptions.
This risk became evident in April 2025, when China tightened export controls on seven rare earth elements critical for electric vehicles and semiconductors
At the same time, cyber incidents involving third-party suppliers are becoming more common. These risks call for strong processes, supplier management, and business continuity planning that risk advisory can achieve.
Cybersecurity and Data Risk
Cybersecurity and data privacy have become critical enterprise risks for Indian companies. With cyberattacks growing by more than 25% year-on-year, and data protection regulations becoming more stringent, organisations face both operational and compliance challenges.
The Digital Personal Data Protection (DPDP) Act has added a legal dimension to data risk, exposing companies to regulatory scrutiny, financial losses, and reputational damage following a breach.
At the same time, concerns around identity theft, AI-driven cyber threats, and technology infrastructure vulnerabilities continue to grow. For many organisations, cybersecurity is a core business risk that must be embedded within the ERM framework.
Regulatory and Compliance Risk
India’s regulatory environment is shifting rapidly. The pattern is consistent. Regulations change, enforcement intensifies. The risk is not just regulatory penalties, there are real consequences including operational disruption, reputational damage, and loss of investor confidence.
Businesses need to manage ESG disclosures mandated by SEBI, evolving anti-money laundering and counter-terrorism financing standards driven by the Financial Action Task Force, GST reconciliation obligations, TDS compliance requirements, and sector-specific regulations issued by regulators such as RBI, IRDA, and FSSAI.
Recent measures, such as SEBI’s requirement to freeze PANs of immediate relatives of designated persons during trading window closures and increased scrutiny of misleading ESG claims, show that these risks have real financial and reputational consequences.
Fraud Risk
Fraud is a growing threat for Indian businesses. The RBI’s Master Directions on Fraud Risk Management, revised in July 2024, mandate early detection, reporting, and governance for banks, cooperative banks, and NBFCs including Early Warning Systems (EWS) integrated with core banking solutions and Red Flagged Account (RFA) reporting.
Beyond the financial sector, procurement fraud, vendor collusion, and payroll manipulation are among the most common fraud types in Indian manufacturing and services firms.
Financial Risk
Financial risks remain an issue. Currency exposure, interest rate fluctuations, and credit risk from debtors are particularly important for exporters and import-dependent Indian businesses.
Mid-sized companies also many times carry debtor concentration risk where a large portion of receivables sits with a small number of customers.
Strategic Risk
These include risks tied to competitive disruption, M&A integration failure, or entering markets without adequate due diligence.
A company that enters a new geography without understanding the local regulatory environment or distribution risks is carrying strategic risk that no internal audit will catch after the fact.
The interconnected nature of these risks is what makes them dangerous.
A cyber breach can disrupt operations, trigger regulatory penalties, damage reputation, and hit financial performance all at once.
Risk Advisory vs Internal Audit: The Connection
Risk advisory and internal audit are related but not the same. If you are a business deciding how to structure your risk governance, this difference is pertinent.
Internal audit is an independent function that evaluates whether your organization’s internal controls, risk management, and governance processes.
It provides assurance to management and the board that things are working as they should. Internal auditors test controls, verify compliance, and identify gaps. Their work is grounded in what has already occurred.
In India, listed companies and certain categories of unlisted companies are required to have an internal audit function under the Companies Act 2013.
Risk advisory, by contrast, is a consulting function. It is not about testing controls that already exist. It focuses on designing the right risk framework in the first place, identifying gaps, and advising on how to address them.
Risk advisors look at external and internal risks in a broad context. They conduct risk assessments, evaluate how the company has handled risks in the past, and develop action plans to reduce future risk exposure.
Example:
If your company’s procurement process has a risk of vendor fraud, internal audit will test whether the three-quote requirement is being followed.
Risk advisory will ask whether three quotes are sufficient and whether your payment approval thresholds, vendor onboarding checks, and conflict-of-interest disclosures are designed well enough to actually prevent fraud.
The two functions complement each other.
Risk advisory designs the framework and identifies the risks. Internal audit provides ongoing assurance that the framework is working. In well-governed organisations, the internal audit plan is itself risk-based, meaning the areas with the highest risk exposure get audited first and most frequently.
Today, boards expect internal auditors to do more than report past issues. Because they understand the organisation’s processes, controls, and vulnerabilities, internal auditors are well placed to identify emerging risks and recommend improvements.
The connection between the two functions creates a continuous improvement cycle. Internal audit identifies control gaps, risk advisory helps address the underlying causes, and internal audit then tests whether the new controls are effective.
This approach is especially valuable for companies experiencing rapid growth, regulatory changes, acquisitions, restructurings, or IPOs, where risks can evolve faster than a traditional audit cycle can address.
How CA Firms Deliver Risk Advisory
Today, leading CA firms like PKC Management Consulting offer comprehensive risk advisory services that rival global consulting firms.
The shift reflects changing client needs. Indian businesses face complex risks that require specialised expertise. CA firms are in a great position to offer that expertise.
Here is what CA firms generally offer under risk advisory:
Risk Assessment and Risk Register Development
This is the starting point for most engagements. The risk advisory firm conducts a structured workshop with the leadership team, reviews financials and processes, and maps the organisation’s key risks: categorised by type (financial, operational, compliance, etc.), probability, and potential impact.
The output is a risk register, a working document that assigns ownership and priority to each identified risk.
Internal Controls Design and IFC/RCM Development
For companies under the Companies Act 2013, Internal Financial Controls (IFC) are a legal requirement for certain classes of companies.
For companies where IFC readiness is linked to an upcoming statutory audit, see how PKC structures financial audit engagements in India to ensure controls are tested and board-ready
CA firms design the Risk Control Matrix (RCM), a document that maps each process to its associated risks and the controls that should mitigate them. This forms the backbone of IFC testing during statutory audit.
Governance, Risk and Compliance (GRC) Advisory
This is the broader, ongoing engagement. It involves helping management design policies, escalation protocols, and monitoring systems so that risk is managed consistently, not just reviewed once a year.
For larger companies, this may include implementing a GRC platform or aligning the organisation with global standards like Coso or ISO 31000.
Enterprise Risk Management (ERM) Implementation
CA firms can also help you build and implement ERM frameworks. They assess your current risk management practices, identify gaps, and design systems that integrate risk management into your business strategy.
This includes developing risk appetite statements, establishing risk governance structures, and creating reporting mechanisms for the board.
Fraud Risk Advisory
CA firms with risk advisory capability also provide fraud risk services.
This means designing prevention frameworks, supporting forensic investigations when fraud is suspected, and helping boards assess their fraud exposure before a regulator does.
Some firms offer forensic accounting services as part of their risk advisory portfolio.
The quality of risk advisory and internal audit services can vary significantly between firms. Smaller firms may be well suited for routine engagements but have limited capacity to manage complex, multi-state, or multi-entity risk environments.
Firms with broader expertise and cross-functional capabilities, such as PKC Management Consulting, are better equipped to address complex challenges where regulatory compliance, operational processes, and financial risks are closely interconnected.
PKC India’s Risk Advisory Services
At PKC Management Consulting, we offer risk advisory services that go beyond traditional compliance.
We work alongside your teams to identify emerging risks, uncover inefficiencies, and help optimize processes. The goal is ensuring compliance while enhancing performance and strategic agility.
Here is what we deliver under risk advisory.
Governance, Risk & Compliance (GRC)
PKC’s GRC practice identifies and assesses risks and builds tailored governance, risk, and compliance frameworks. We help organizations strengthen internal controls, embed accountability, and stay aligned with evolving regulations.
RCM & IFC Development
We design Risk Control Matrices linking processes, risks, and controls to ensure clarity, accountability, and audit readiness. For companies under the Companies Act, we also develop and review Internal Financial Controls aligned with statutory and industry standards.
Internal Audit (Risk-Based Approach)
Our internal audit focuses on key risk areas to identify control gaps, inefficiencies, and emerging risks. Audit plans are driven by the risk register, ensuring high-risk areas are prioritized and actionable improvements are the outcome.
ICFR & SOX Alignment
PKC supports design and implementation of Internal Controls over Financial Reporting (ICFR) aligned with global standards such as SOX, helping reduce financial reporting risks and strengthen stakeholder confidence.
Process Audit
Our process audits go beyond identifying inefficiencies. We help you uncover opportunities to enhance productivity, reduce costs, and strengthen operational controls. Through detailed analysis, we offer actionable insights that optimise your business functions.
Outsourced CFO Services
We offer strategic financial leadership through our outsourced CFO services. Our experts offer guidance on financial planning, risk management, and decision-making. They help ensure your organisation is prepared to scale, innovate, and meet investor expectations
Why Choose PKC
PKC’s risk advisory services are designed for Indian businesses facing complex and evolving risks. We combine regulatory expertise with practical business knowledge and leverage technology to get optimal results.
Our strength in risk advisory lies in the integration across service lines. A company working with PKC on internal audit can draw on the same team’s knowledge of tax, process consulting, and ERP implementation. This which means risk findings translate into practical, actionable remediation rather than a report that sits on the shelf.
If your business is growing, preparing for a regulatory review, or has gaps in its internal controls that keep surfacing during audits, a structured risk advisory engagement with PKC is a practical next step.
Get started, schedule a free 30 minute discovery call with PKC’s team.
FAQs
What does a risk advisory firm do?
A risk advisory firm helps businesses identify, assess, and manage risks that could affect their financial health, operations, or regulatory standing. This includes designing risk frameworks, building internal controls, advising on compliance obligations, and conducting fraud risk assessments. The goal is to address risk before it becomes a liability.
What is enterprise risk management (ERM)?
ERM is a systematic approach to identifying and managing risks across the entire organization. The COSO ERM Framework, the most widely used standard globally, organizes this around five components: Governance and Culture, Strategy and Objective Setting, Performance, Review and Revision, and Information and Communication. In India, listed companies are required to maintain board-level oversight of risk under the Companies Act 2013 and SEBI LODR.
How is risk advisory different from internal audit?
Internal audit tests whether your existing controls are working. Risk advisory designs the risk framework in the first place: identifying gaps and advising on the right controls to put in place. The two are complementary: risk advisory sets up the structure; internal audit provides ongoing assurance that it is functioning. Most well-governed companies need both.
What industries need risk advisory most?
BFSI is the highest-demand sector, given direct regulatory oversight from RBI and SEBI. Manufacturing, healthcare, and retail also benefit from it, especially where supply chains, vendor networks, or multi-state operations create operational and compliance complexity. IT/ITES companies face growing exposure to cybersecurity and data privacy risk. Any company preparing for an IPO, institutional investment, or significant acquisition also needs risk advisory as part of transaction readiness.
How often should you update your risk management framework?
You should update your risk management framework at least annually, but more frequently if your business, industry, or regulations shift. ERM is not a one-time project. Major events like mergers, new product launches, or geopolitical changes demand immediate reassessments. Continuous monitoring—keeps your framework relevant and your business protected.
