Enterprise Risk Management

What does an ERM Framework provide?

• A limited approach to risk

• A reactive risk management system

• A comprehensive view of risk

• A narrow view of risk

What is the key aim of an effective ERM Framework?

• To increase operational costs

• To eliminate all risks

• To achieve the right balance between risk and reward

• To focus solely on compliance

What is NOT a characteristic of ERM?

• It promotes strategic decision making

• It is a ready-made methodology

• It is a concept

• It provides higher effectiveness

Why is ERM important for organizations?

• It focuses only on past events

• It supports value creation

• It discourages management decisions

• It helps in avoiding all risks

What is the first component of the COSO Framework?

• Risk assessment

• Objective setting

• Event identification

• Internal control environment

What does event identification involve?

• Only external events

• Only internal events

• Ignoring events altogether

• Both internal and external events

What is the purpose of risk assessment?

• To ignore risks

• To create more risks

• To eliminate all risks

• To analyze risks considering likelihood and impact

What does risk response involve?

• Selecting how to ignore risks

• Avoiding any response

• Evaluating options in relation to risk appetite

• Only focusing on cost

What is the role of control activities in ERM?

• To ignore risk responses

• To focus solely on external communication

• To create more risks

• To set and implement policies

What is essential for effective communication in ERM?

• No communication is needed

• Both internal and external stakeholders

• Only external stakeholders

• Only internal stakeholders