According to a 2012 survey of 192 U.S. executives conducted by Deloitte & Touche LLP and Forbes Insights, social media was identified as the fourth-largest risk on par with financial risk. This ranking derives from social media's capacity to accelerate to other risks, such as financial risk associated with disclosures in violation of SEC rules, for example. Other risks inherent to social media include information leaks, reputational damage to brand, non-compliance with regulatory requirements, third-party, and governance risks?
1. Why is it important for a firm such as EY, in a case such as Groupon, to fully understand the nature of risk when a company conducts its business online?
2. What role can internal auditors play in dealing with such risks?
3. How should internal auditors adapt their risk assessment procedures for social media/networking companies?