Assessment of Risk Management

What are the four objectives of risk management highlighted in the COSO Cube?

(a)  

What are the eight components of risk management identified in the COSO Cube?

(a)  

It reflects the company’s risk management philosophy, risk appetite, board oversight, commitment to ethical values and competence of the human resource.

• Risk Assessment

• Event Identification

• Objective Setting

• Internal Environment

It is the precondition to event identification, risk assessment and risk response.

• Control Activities

• Objective Setting

• Monitoring

• Internal Environment

Management identifies potential events that may affect the company’s ability to achieve its strategic, operational, reporting and compliance objectives.

• Risk Assessment

• Information and Communication

• Objective Setting

• Event Identification

Management considers different assessment techniques and uses various data sources to evaluate the likelihood and impact of the identified potential events.

• Risk Assessment

• Event Identification

• Risk Response

• Monitoring

What does the Internal Environment component reflect?

• Commitment to Competence

• Risk Appetite

• Board of Directors

• Risk Management Philosophy

• Integrity and Ethical Values

What is the precondition to event identification, risk assessment, and risk response?

• Strategic Objectives

• Related Objectives

• Selected Objectives

• Risk Appetite

• Risk Tolerances

What are the two types of risks that management identifies during Event Identification?

• Potentially Positive Events

• Potentially Negative Events

The company's susceptibility to risk in the absence of any actions that management might take to alter the risk’s likelihood or impact.

• Risk Assessment

• Inherent Risk

• Residual Risk

• Risk Response