This document summarizes COSO's Enterprise Risk Management - Integrated Framework. It defines ERM as a process run by an organization's board and management to identify potential events, manage risk within the organization's risk appetite, and provide assurance around achieving objectives. The framework identifies 8 components of ERM - internal environment, objective setting, event identification, risk assessment, risk response, control activities, information & communication, and monitoring. It describes how organizations can implement ERM through risk assessments, determining risk appetite, identifying responses, and ongoing monitoring and oversight. Internal auditors can help by reviewing controls and risk processes and ensuring resources target key risk areas.
The document discusses COSO's Enterprise Risk Management Integrated Framework. It defines ERM and describes its eight interrelated components: internal environment, objective setting, event identification, risk assessment, risk response, control activities, information & communication, and monitoring. ERM supports organizations in identifying and managing risks across the enterprise. The framework helps entities achieve objectives and create value for stakeholders. Internal auditors can assist with ERM implementation by evaluating risk management processes and controls, and advising on improvements.
Operational Risk Management - A Gateway to managing the risk profile of your...Eneni Oduwole
This document provides an overview of operational risk management (ORM). It defines operational risk and ORM, outlines the core principles and framework of ORM. It describes the elements of ORM including people, process, system and external risks. It discusses ORM procedures such as risk and control self-assessment, key risk indicators, and loss incident reporting. It also introduces some common ORM tools and highlights the benefits of implementing ORM such as improved quality, cost savings, stability of earnings and enhanced competitive position.
Operational risk management and measurementRahmat Mulyana
a short description in mixed English and Bahasa Indonesia on Operational Risk Management and Measurement, in particular value at risk calculation using Monte carlo Simulation. Another method using EVT (Extree Value Theory) will be delivered shortly. regards
This document summarizes COSO's Enterprise Risk Management - Integrated Framework. It defines ERM as a process run by an organization's board and management to identify potential events, manage risk within the organization's risk appetite, and provide assurance around achieving objectives. The framework identifies 8 components of ERM - internal environment, objective setting, event identification, risk assessment, risk response, control activities, information & communication, and monitoring. It describes how organizations can implement ERM through risk assessments, determining risk appetite, identifying responses, and ongoing monitoring and oversight. Internal auditors can help by reviewing controls and risk processes and ensuring resources target key risk areas.
1. COSO Enterprise Risk Management (ERM) is a framework that helps companies consistently define and manage risks across the organization. It involves identifying, assessing, and responding to risks in a way that helps the company achieve its objectives.
2. The COSO ERM framework is represented as a cube with four columns of strategic objectives, eight rows of risk components, and multiple levels to describe the enterprise. It includes components like internal environment, objective setting, event identification, risk assessment, risk response, control activities, information & communication, and monitoring.
3. Control activities are policies and procedures that ensure risks are mitigated, such as separating duties and documentation. Information & communication ensures relevant information is shared to allow people
Enterprise risk management (ERM) takes a comprehensive, top-down approach to identifying and managing an organization's risks. It considers strategic, operational, pure and speculative risks across the entire organization rather than managing risks in silos. A typical ERM process involves identifying benefits, acquiring board support, developing risk procedures, determining risk appetite, and fostering a risk-aware culture. Barriers to effective ERM include difficulties defining risk appetite and a lack of requests to change risk management approaches. The 2012 Super Bowl in Indianapolis demonstrated how ERM can be applied to large-scale event planning and produce positive results. Future adoption of ERM may be slow as it is considered a "soft" aspect, but its principles are becoming
The COSO framework provides guidance for establishing effective internal controls. It is comprised of 5 components: control environment, risk assessment, control activities, information and communication, and monitoring. The control environment sets the tone at the top and influences employee conduct. Risk assessment involves identifying risks to financial reporting. Control activities are policies and procedures that help ensure management directives are followed. Information and communication systems identify, capture, and communicate pertinent information. Monitoring assesses internal control effectiveness over time.
Operational Risk Management under BASEL eraTreat Risk
Operational risk have always ignored by Banks as they thought Credit and market risks can cause catastrophe. But history of misfortunes taught us different lessons. Controls and internal audit have long been construed as guard till BASEL II dictates forced banks to look with insight. Understand the dimension of ORM in this presentation.
The document discusses COSO's Enterprise Risk Management Integrated Framework. It defines ERM and describes its eight interrelated components: internal environment, objective setting, event identification, risk assessment, risk response, control activities, information & communication, and monitoring. ERM supports organizations in identifying and managing risks across the enterprise. The framework helps entities achieve objectives and create value for stakeholders. Internal auditors can assist with ERM implementation by evaluating risk management processes and controls, and advising on improvements.
Operational Risk Management - A Gateway to managing the risk profile of your...Eneni Oduwole
This document provides an overview of operational risk management (ORM). It defines operational risk and ORM, outlines the core principles and framework of ORM. It describes the elements of ORM including people, process, system and external risks. It discusses ORM procedures such as risk and control self-assessment, key risk indicators, and loss incident reporting. It also introduces some common ORM tools and highlights the benefits of implementing ORM such as improved quality, cost savings, stability of earnings and enhanced competitive position.
Operational risk management and measurementRahmat Mulyana
a short description in mixed English and Bahasa Indonesia on Operational Risk Management and Measurement, in particular value at risk calculation using Monte carlo Simulation. Another method using EVT (Extree Value Theory) will be delivered shortly. regards
This document summarizes COSO's Enterprise Risk Management - Integrated Framework. It defines ERM as a process run by an organization's board and management to identify potential events, manage risk within the organization's risk appetite, and provide assurance around achieving objectives. The framework identifies 8 components of ERM - internal environment, objective setting, event identification, risk assessment, risk response, control activities, information & communication, and monitoring. It describes how organizations can implement ERM through risk assessments, determining risk appetite, identifying responses, and ongoing monitoring and oversight. Internal auditors can help by reviewing controls and risk processes and ensuring resources target key risk areas.
1. COSO Enterprise Risk Management (ERM) is a framework that helps companies consistently define and manage risks across the organization. It involves identifying, assessing, and responding to risks in a way that helps the company achieve its objectives.
2. The COSO ERM framework is represented as a cube with four columns of strategic objectives, eight rows of risk components, and multiple levels to describe the enterprise. It includes components like internal environment, objective setting, event identification, risk assessment, risk response, control activities, information & communication, and monitoring.
3. Control activities are policies and procedures that ensure risks are mitigated, such as separating duties and documentation. Information & communication ensures relevant information is shared to allow people
Enterprise risk management (ERM) takes a comprehensive, top-down approach to identifying and managing an organization's risks. It considers strategic, operational, pure and speculative risks across the entire organization rather than managing risks in silos. A typical ERM process involves identifying benefits, acquiring board support, developing risk procedures, determining risk appetite, and fostering a risk-aware culture. Barriers to effective ERM include difficulties defining risk appetite and a lack of requests to change risk management approaches. The 2012 Super Bowl in Indianapolis demonstrated how ERM can be applied to large-scale event planning and produce positive results. Future adoption of ERM may be slow as it is considered a "soft" aspect, but its principles are becoming
The COSO framework provides guidance for establishing effective internal controls. It is comprised of 5 components: control environment, risk assessment, control activities, information and communication, and monitoring. The control environment sets the tone at the top and influences employee conduct. Risk assessment involves identifying risks to financial reporting. Control activities are policies and procedures that help ensure management directives are followed. Information and communication systems identify, capture, and communicate pertinent information. Monitoring assesses internal control effectiveness over time.
Operational Risk Management under BASEL eraTreat Risk
Operational risk have always ignored by Banks as they thought Credit and market risks can cause catastrophe. But history of misfortunes taught us different lessons. Controls and internal audit have long been construed as guard till BASEL II dictates forced banks to look with insight. Understand the dimension of ORM in this presentation.
Implementation of Enterprise Risk Management with ISO 31000 Risk Management S...PECB
The webinar covers:
• The start of any Enterprise Risk Management Program
• The approach to developing a framework that will assist organizations to integrate RM into their enterprise-wide risk management systems
• The relationship between the foundations of the risk management framework and their objectives
Presenter:
This webinar was presented by M. Youssef K, an executive consultant & trainer with several qualifications. He is an accomplished expert with over 10 years’ experience in the field of risk management, project and program management, PRINCE 2, Agile, EVM, business process analysis and design, as well as operational and organizational excellence.
Link of the recorded session published on YouTube: https://youtu.be/9fO-JqENL0I
2017 coso-erm-integrating-with-strategy-and-performance-executive-summaryVALUES & SENSE
This document provides an executive summary of an updated framework for enterprise risk management published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in June 2017. The updated framework emphasizes integrating enterprise risk management with strategy and performance. It highlights how considering risk can increase opportunities and improve outcomes. Organizations that effectively apply enterprise risk management can benefit from increased opportunities, improved performance and reduced variability, better resource allocation, and enhanced resilience. The framework is intended to help both management and boards oversee risk and optimize strategy.
The document discusses enterprise risk management (ERM) and its rising importance for information security practices. ERM aims to align security solutions with business priorities by analyzing overall IT risks, prioritizing risk mitigation actions, and taking a managed approach to enterprise investments. Key drivers of ERM adoption include changing regulations, expanding business threats, and interest in simplifying security management.
The document provides an overview of an operational risk course. The course objectives are to introduce key aspects of operational risk, including definitions, importance of control and quantification, and regulatory frameworks. It outlines course modules that will cover topics such as risk identification, measurement, management tools, and case studies. It also summarizes perspectives on operational risk from industry practitioners, including approaches to improving financial performance and creating a "no surprise" environment through better risk management.
Enterprise Risk Management (ERM); From theory to practiceSegun Ogunwale
This document outlines the theory and practice of enterprise risk management (ERM). It discusses how ERM works differently in private versus public sector organizations due to differences in goals and risk tolerance. The document proposes a framework for implementing ERM with five phases: risk governance, risk assessment, risk quantification, risk monitoring and reporting, and risk optimization. It also describes steps to implement ERM such as obtaining buy-in, building an ERM foundation, conducting risk assessments, ongoing monitoring, and developing reporting. Roadblocks to implementation like resistance to change are also addressed.
The document outlines the National Bank of Malawi's operational risk management framework. It discusses the operational risk policy, roles and responsibilities of the board, management, and risk division. It describes the bank's approach to identifying, assessing, monitoring, and controlling operational risk. The bank has adopted the Basic Indicator Approach to measure operational risk capital charge and has developed business continuity plans to prepare for disasters. The presentation also discusses operational risk incident management guidelines and roles in reporting and addressing incidents.
The document discusses operational risk and provides guidance on defining, identifying, measuring, monitoring, controlling, and mitigating operational risk according to the Basel Committee on Banking Supervision. It addresses issues with operational risk loss data and outlines principles for developing an appropriate operational risk management environment, process, and framework. The document also examines challenges with using internal and external loss data for quantifying operational risk capital requirements.
Enterprise Risk Management as a Core Management Processregio12
The document summarizes the key findings from a study examining best practices in enterprise risk management (ERM) across multiple organizations. The study identified 10 principal findings related to optimizing ERM structures, supporting methodologies, using ERM for decision-making, and evaluating ERM performance. Best practices included establishing executive-level ERM support, using a variety of risk assessment methods, focusing on risk-informed culture and communication, evaluating ERM through performance metrics, and ensuring ERM maturity.
COSO's Internal Control - Integrated Framework.
Includes:
Objectives;
Components;
Principles relating to the components and
Point of Focus assisting users in determining whether the principles are present and functioning
Operational Risk Management - Understanding Your Risk LandscapeEneni Oduwole
This presentation provides insights on how the proper implementation of Operational Risk Management can lead to effective risk profiling, analysis and mitigation. It introduces operational risk as a bedrock for meaningful risk management irrespective of which industry an organization plays in.
The document provides a 10-point summary of key changes in the updated Enterprise Risk Management Framework:
1. It introduces a new structure with fewer (five) components and uses examples to emphasize points.
2. It focuses on integrating ERM with business strategy and performance to improve decision-making.
3. It emphasizes value creation and risk management's role in achieving objectives and strategy.
Risk management is important for construction projects. It involves identifying potential risks, assessing their likelihood and consequences, and developing responses to manage risks. The risk management process includes four steps: identifying hazards, assessing risks, controlling risks, and monitoring control measures. It aims to reduce the probability or impact of negative events. Key risks in construction relate to costs, time, and quality going over budget or being delayed. Risk management benefits projects by improving decision making and providing clear understanding of risks.
Operation Risk Management in Banking SectorSanjay Kumbhar
This presentation discusses operational risk management in the banking sector. It covers topics such as categories of operational risk, risk identification and analysis techniques, key risk indicators, and risk mitigation strategies. The presentation is delivered by five students and contains several sections that outline the flow of topics to be presented.
operations risk management power point presentation.Miyelani Shibambo
Operational risk can result in losses from internal failures or external events. It is classified based on frequency and impact of events. Management typically focuses on low frequency/high impact events and high frequency/low impact events. The Basel Accords define three approaches to operational risk capital requirements: Basic Indicator, Standardized, and Advanced Measurement. The Standardized Approach divides business activities into eight lines and assigns a beta multiplier to each line's gross income. The Advanced Measurement Approach uses banks' internal models to calculate regulatory capital.
The document discusses COSO's Enterprise Risk Management Integrated Framework, which provides guidance on establishing an effective enterprise risk management process. It defines the components of ERM, including internal environment, objective setting, event identification, risk assessment, risk response, control activities, information and communication, and monitoring. The framework is designed to help organizations effectively manage risk and support the achievement of their objectives.
Integrating Strategy and Risk ManagementAndrew Smart
"A Holistic Approach to Managing Risk amidst Global Uncertainty"
The RMA/Cass Business School
10–14 February 2013
Advanced Risk Management Programme
Organised by Andrew Smart & Nicholas Hawke
In today’s fast-moving, complex environment, risk executives must cultivate an understanding across all risks and businesses. Business problems are multifaceted, interrelated, and increasingly global. Executives must possess enhanced skills to identify and address a wide range of risks with an integrated approach and enterprise-wide perspective.
The RMA/Cass Advanced Risk Management Programme, led by the faculty at Cass, one of the UK’s top business schools, exposes participants to a rigorous, yet inspiring blend of theory, practice and cutting-edge research, instilling knowledge and skills applicable to the real world of global business. In addition to its focus on the known and quantifiable risks of credit, market, and operational, the programme concentrates on the unknowable and difficult to measure risks, including business, strategic, and reputation. Cass has excellent links to the City of London firms and institutions and is able to complement Cass faculty with guest faculty and senior level business practitioners, considered by their peers to be industry thought leaders
Areas of focus for The RMA/Cass Advanced Risk Management Programme include:
• Risk management as a strategic competitive strength
• An integrated approach to risk management
• Fostering a culture and climate that openly communicates risk
• A framework for rapidly responding to known risks and unraveling the complexities of the unknown
• A focus on risk informed by global perspectives.
This document discusses the importance of risk culture and effective risk management frameworks in banks. It begins with an agenda covering acting on formal risk policies, embedding risk processes into daily practice through risk culture, and lessons from recent events. It then discusses how to define risk culture and ensure risk management is more than just words on paper. An effective enterprise risk management framework is key, integrating all risks with consistent governance, processes, and reporting. The challenges lie in implementing an effective risk culture and making risk management practices real across the organization on a daily basis.
This document discusses operational risk and key risk indicators (KRIs). It defines operational risk and provides examples of operational risk losses from past incidents. It explains that KRIs are metrics that provide information on an organization's current exposure level to a given operational risk. The document outlines the process for identifying KRIs, which involves risk and control self-assessments to identify inherent risks, controls, and residual risks and prioritize them. It also discusses setting thresholds for KRIs, collecting and reporting KRI data, and the roles involved in managing the KRI process. Examples of potential KRIs are provided for credit risk, financial markets activities, and other operational risks.
PYA Principal Shannon Sumner co-presented “Enterprise Risk Management” at the HCCA Board Audit Committee Compliance Conference, February 27-28, 2017, in Scottsdale, Arizona.
The presentation covered:
The role of the governing Board of an organization in enterprise risk management (ERM)
Effective ERM in today’s healthcare setting
When ERM fails: “The perfect storm”
This document discusses COSO's Enterprise Risk Management framework. It defines ERM as a process designed to identify potential events that may affect an entity and manage risks within its risk appetite. The framework consists of 8 components: internal environment, objective setting, event identification, risk assessment, risk response, control activities, information & communication, and monitoring. It is designed to help an organization achieve its objectives and create value for stakeholders. Internal auditors play an important role in monitoring and evaluating the effectiveness of an organization's ERM.
This document discusses enterprise risk management (ERM) frameworks and best practices. It provides an overview of why ERM is important for organizations to deal with potential future uncertainties and support value creation. The document outlines the key components of the COSO ERM framework, including establishing risk management objectives, identifying risks, assessing risks, responding to risks, control activities, information/communication, and monitoring. It also discusses how to implement an effective ERM process through organizational design, risk assessments, determining risk appetite, identifying risk responses, and communication/oversight.
Implementation of Enterprise Risk Management with ISO 31000 Risk Management S...PECB
The webinar covers:
• The start of any Enterprise Risk Management Program
• The approach to developing a framework that will assist organizations to integrate RM into their enterprise-wide risk management systems
• The relationship between the foundations of the risk management framework and their objectives
Presenter:
This webinar was presented by M. Youssef K, an executive consultant & trainer with several qualifications. He is an accomplished expert with over 10 years’ experience in the field of risk management, project and program management, PRINCE 2, Agile, EVM, business process analysis and design, as well as operational and organizational excellence.
Link of the recorded session published on YouTube: https://youtu.be/9fO-JqENL0I
2017 coso-erm-integrating-with-strategy-and-performance-executive-summaryVALUES & SENSE
This document provides an executive summary of an updated framework for enterprise risk management published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in June 2017. The updated framework emphasizes integrating enterprise risk management with strategy and performance. It highlights how considering risk can increase opportunities and improve outcomes. Organizations that effectively apply enterprise risk management can benefit from increased opportunities, improved performance and reduced variability, better resource allocation, and enhanced resilience. The framework is intended to help both management and boards oversee risk and optimize strategy.
The document discusses enterprise risk management (ERM) and its rising importance for information security practices. ERM aims to align security solutions with business priorities by analyzing overall IT risks, prioritizing risk mitigation actions, and taking a managed approach to enterprise investments. Key drivers of ERM adoption include changing regulations, expanding business threats, and interest in simplifying security management.
The document provides an overview of an operational risk course. The course objectives are to introduce key aspects of operational risk, including definitions, importance of control and quantification, and regulatory frameworks. It outlines course modules that will cover topics such as risk identification, measurement, management tools, and case studies. It also summarizes perspectives on operational risk from industry practitioners, including approaches to improving financial performance and creating a "no surprise" environment through better risk management.
Enterprise Risk Management (ERM); From theory to practiceSegun Ogunwale
This document outlines the theory and practice of enterprise risk management (ERM). It discusses how ERM works differently in private versus public sector organizations due to differences in goals and risk tolerance. The document proposes a framework for implementing ERM with five phases: risk governance, risk assessment, risk quantification, risk monitoring and reporting, and risk optimization. It also describes steps to implement ERM such as obtaining buy-in, building an ERM foundation, conducting risk assessments, ongoing monitoring, and developing reporting. Roadblocks to implementation like resistance to change are also addressed.
The document outlines the National Bank of Malawi's operational risk management framework. It discusses the operational risk policy, roles and responsibilities of the board, management, and risk division. It describes the bank's approach to identifying, assessing, monitoring, and controlling operational risk. The bank has adopted the Basic Indicator Approach to measure operational risk capital charge and has developed business continuity plans to prepare for disasters. The presentation also discusses operational risk incident management guidelines and roles in reporting and addressing incidents.
The document discusses operational risk and provides guidance on defining, identifying, measuring, monitoring, controlling, and mitigating operational risk according to the Basel Committee on Banking Supervision. It addresses issues with operational risk loss data and outlines principles for developing an appropriate operational risk management environment, process, and framework. The document also examines challenges with using internal and external loss data for quantifying operational risk capital requirements.
Enterprise Risk Management as a Core Management Processregio12
The document summarizes the key findings from a study examining best practices in enterprise risk management (ERM) across multiple organizations. The study identified 10 principal findings related to optimizing ERM structures, supporting methodologies, using ERM for decision-making, and evaluating ERM performance. Best practices included establishing executive-level ERM support, using a variety of risk assessment methods, focusing on risk-informed culture and communication, evaluating ERM through performance metrics, and ensuring ERM maturity.
COSO's Internal Control - Integrated Framework.
Includes:
Objectives;
Components;
Principles relating to the components and
Point of Focus assisting users in determining whether the principles are present and functioning
Operational Risk Management - Understanding Your Risk LandscapeEneni Oduwole
This presentation provides insights on how the proper implementation of Operational Risk Management can lead to effective risk profiling, analysis and mitigation. It introduces operational risk as a bedrock for meaningful risk management irrespective of which industry an organization plays in.
The document provides a 10-point summary of key changes in the updated Enterprise Risk Management Framework:
1. It introduces a new structure with fewer (five) components and uses examples to emphasize points.
2. It focuses on integrating ERM with business strategy and performance to improve decision-making.
3. It emphasizes value creation and risk management's role in achieving objectives and strategy.
Risk management is important for construction projects. It involves identifying potential risks, assessing their likelihood and consequences, and developing responses to manage risks. The risk management process includes four steps: identifying hazards, assessing risks, controlling risks, and monitoring control measures. It aims to reduce the probability or impact of negative events. Key risks in construction relate to costs, time, and quality going over budget or being delayed. Risk management benefits projects by improving decision making and providing clear understanding of risks.
Operation Risk Management in Banking SectorSanjay Kumbhar
This presentation discusses operational risk management in the banking sector. It covers topics such as categories of operational risk, risk identification and analysis techniques, key risk indicators, and risk mitigation strategies. The presentation is delivered by five students and contains several sections that outline the flow of topics to be presented.
operations risk management power point presentation.Miyelani Shibambo
Operational risk can result in losses from internal failures or external events. It is classified based on frequency and impact of events. Management typically focuses on low frequency/high impact events and high frequency/low impact events. The Basel Accords define three approaches to operational risk capital requirements: Basic Indicator, Standardized, and Advanced Measurement. The Standardized Approach divides business activities into eight lines and assigns a beta multiplier to each line's gross income. The Advanced Measurement Approach uses banks' internal models to calculate regulatory capital.
The document discusses COSO's Enterprise Risk Management Integrated Framework, which provides guidance on establishing an effective enterprise risk management process. It defines the components of ERM, including internal environment, objective setting, event identification, risk assessment, risk response, control activities, information and communication, and monitoring. The framework is designed to help organizations effectively manage risk and support the achievement of their objectives.
Integrating Strategy and Risk ManagementAndrew Smart
"A Holistic Approach to Managing Risk amidst Global Uncertainty"
The RMA/Cass Business School
10–14 February 2013
Advanced Risk Management Programme
Organised by Andrew Smart & Nicholas Hawke
In today’s fast-moving, complex environment, risk executives must cultivate an understanding across all risks and businesses. Business problems are multifaceted, interrelated, and increasingly global. Executives must possess enhanced skills to identify and address a wide range of risks with an integrated approach and enterprise-wide perspective.
The RMA/Cass Advanced Risk Management Programme, led by the faculty at Cass, one of the UK’s top business schools, exposes participants to a rigorous, yet inspiring blend of theory, practice and cutting-edge research, instilling knowledge and skills applicable to the real world of global business. In addition to its focus on the known and quantifiable risks of credit, market, and operational, the programme concentrates on the unknowable and difficult to measure risks, including business, strategic, and reputation. Cass has excellent links to the City of London firms and institutions and is able to complement Cass faculty with guest faculty and senior level business practitioners, considered by their peers to be industry thought leaders
Areas of focus for The RMA/Cass Advanced Risk Management Programme include:
• Risk management as a strategic competitive strength
• An integrated approach to risk management
• Fostering a culture and climate that openly communicates risk
• A framework for rapidly responding to known risks and unraveling the complexities of the unknown
• A focus on risk informed by global perspectives.
This document discusses the importance of risk culture and effective risk management frameworks in banks. It begins with an agenda covering acting on formal risk policies, embedding risk processes into daily practice through risk culture, and lessons from recent events. It then discusses how to define risk culture and ensure risk management is more than just words on paper. An effective enterprise risk management framework is key, integrating all risks with consistent governance, processes, and reporting. The challenges lie in implementing an effective risk culture and making risk management practices real across the organization on a daily basis.
This document discusses operational risk and key risk indicators (KRIs). It defines operational risk and provides examples of operational risk losses from past incidents. It explains that KRIs are metrics that provide information on an organization's current exposure level to a given operational risk. The document outlines the process for identifying KRIs, which involves risk and control self-assessments to identify inherent risks, controls, and residual risks and prioritize them. It also discusses setting thresholds for KRIs, collecting and reporting KRI data, and the roles involved in managing the KRI process. Examples of potential KRIs are provided for credit risk, financial markets activities, and other operational risks.
PYA Principal Shannon Sumner co-presented “Enterprise Risk Management” at the HCCA Board Audit Committee Compliance Conference, February 27-28, 2017, in Scottsdale, Arizona.
The presentation covered:
The role of the governing Board of an organization in enterprise risk management (ERM)
Effective ERM in today’s healthcare setting
When ERM fails: “The perfect storm”
This document discusses COSO's Enterprise Risk Management framework. It defines ERM as a process designed to identify potential events that may affect an entity and manage risks within its risk appetite. The framework consists of 8 components: internal environment, objective setting, event identification, risk assessment, risk response, control activities, information & communication, and monitoring. It is designed to help an organization achieve its objectives and create value for stakeholders. Internal auditors play an important role in monitoring and evaluating the effectiveness of an organization's ERM.
This document discusses enterprise risk management (ERM) frameworks and best practices. It provides an overview of why ERM is important for organizations to deal with potential future uncertainties and support value creation. The document outlines the key components of the COSO ERM framework, including establishing risk management objectives, identifying risks, assessing risks, responding to risks, control activities, information/communication, and monitoring. It also discusses how to implement an effective ERM process through organizational design, risk assessments, determining risk appetite, identifying risk responses, and communication/oversight.
The document discusses the risk management process, including key drivers, risk analysis, risk identification by source, and risk assessment. It describes the main steps and considerations for risk analysis, including quantitative and qualitative approaches. It also outlines some common sources to identify risks, such as risk registers, audit reports, impact analyses, reviews, and analytical tools like SWOT and PESTLE. Effective risk management requires identifying risks from multiple sources, analyzing their likelihood and potential impact, and ongoing monitoring and assessment.
The document discusses COSO's Enterprise Risk Management framework. It defines ERM and explains why it is important for managing risks and uncertainties to achieve organizational objectives. The framework establishes eight components of ERM - internal environment, objective setting, event identification, risk assessment, risk response, control activities, information & communication, and monitoring. It provides guidance on implementing ERM.
The underlying premise of enterprise risk management is that every entity exists to provide determine how much uncertainty to accept as it strives to grow stakeholder value. Uncertainty presents both risk and opportunity, with the potential to erode or enhance value.
This document provides an overview of operational risk management frameworks and control self-assessment processes. It defines risk management and outlines common risk management frameworks. It then describes a control self-assessment framework that includes setting objectives, assessing risks and controls, analyzing results, and monitoring risks on an ongoing basis. The framework is intended to help managers assess risks and controls in a transparent way and provide regular reporting to senior management.
Enterprise risk management (ERM) is a process that helps organizations identify, assess, and manage risks to achieving their objectives. It involves identifying risks across strategic, operational, reporting and compliance categories and developing a portfolio view of risks from a business unit and entity level. The ERM process also includes establishing risk management philosophies, setting risk appetites, identifying and assessing risks, developing risk responses, monitoring risks, and oversight from management.
The document outlines Peter Moore's presentation on creating value through enterprise risk management. It discusses barriers to success like poor frameworks and engagement. It also covers risk management frameworks, focusing on simplicity and intuitiveness. Other sections explain risk appetite and tolerance, integrating risk management into business processes, and using key risk indicators to monitor risks. The goal is to establish a clear risk framework that creates value by better informing decision-making and resource allocation.
This document summarizes a presentation given by Christopher Mandel of Sedgwick on leveraging ISO 31000 for enterprise risk management success. The presentation discusses how ISO 31000 aligns with ERM priorities such as addressing all risks and breaking down silos. It presents models for risk management capability evolution and the consistency that standards provide. Strategic risk management is discussed as a core competency for high performing ERM. Components of best-in-class risk management include strategic decision making, risk knowledge, governance, and accountability. Overall the presentation argues that ISO 31000 can facilitate ERM success by providing a standardized framework that can be customized to organizational needs and embedded into decision making and culture.
1) The document discusses the process of establishing an enterprise risk management (ERM) system based on the ISO 31000 standard, including obtaining management commitment, designing an ERM framework, and implementing, monitoring, and improving the system.
2) Key steps in designing an ERM framework include understanding the organization's context, determining where ERM should be positioned, developing a risk management policy, and assigning roles and responsibilities.
3) Internal audit can play an important role in establishing the ERM system by leading implementation, providing consulting support and assurance services, and helping to identify, analyze, and evaluate risks.
The document discusses implementing an enterprise risk management (ERM) methodology and tools. It proposes assessing business risks, developing risk response strategies, and monitoring risk management processes. Key activities include identifying risks, measuring impact and likelihood, developing risk action plans, and monitoring risk responses. The goal is to gain consensus on an ERM approach that aligns enterprise and IT risks with the organization's strategy and risk appetite.
ThinkGRC justifying the transition to an Enterprise Risk Management (ERM) modelThinkGRC
Justifying the transition to an Enterprise Risk Management (ERM) Model for Senior Management. This presentation will help Risk Managers present the concept, justification and benefits of moving to a consolidated ERM model and an organizational approach.
PECB Webinar: ISO 31000 - The Benchmark for Risk Management in uncertain timesPECB
The webinar covers:
• Overview of ISO 31000 and how this standard implies threats but opportunities as well
• Risk-based thinking as an integral part of ISO 9001:2015 and ISO 14001:2015
• Principles, processes and framework of ISO 31000
• How organizations can reduce uncertainty, seize opportunities and treat risks
Presenter:
This session will be presented by PECB Trainer Jacob McLean, Principal Consultant and Managing Director of Kaizen Training & Management Consultants Limited.
Link of the recorded session published on YouTube: https://youtu.be/MVBMM6X3Vgw
Operational risk management has evolved over time as organizations seek to systematically manage risks. Key concepts include inherent risk, likelihood, exposure, and treatments like transfer, accept, and optimize. Operational risk can arise from organization, processes, technology, human factors, or external events. It is measured using tools like control and risk self-assessments to identify threats, controls, and residual risks. The goal is integrated risk management to both control risks and create shareholder value through efficiency and competitive advantage.
This document discusses risk management. It defines risk as the probability of an event occurring combined with its consequences. Effective risk management is important for strategic decision making and maximizing opportunities while mitigating threats. The board is responsible for determining the nature and level of risk an organization is willing to accept. A sound system of risk management and internal controls should be in place and regularly reviewed to assess effectiveness. Factors like likelihood, impact, and cost of controls should be considered when evaluating risks. Risk management should be integrated into the overall strategy and culture of an organization.
The document summarizes the updated 2013 COSO Internal Control-Integrated Framework, which retains the core definition and five components of internal control from the original framework but includes enhancements and clarifications. The key changes are that the original framework's fundamental concepts are now principles associated with the five components, and all 17 principles must be present and functioning for an effective system of internal control. The document also provides an overview of the 17 principles and related points of focus within the five components of internal control framework.
Strategic Management Process is defined as the way an organization defines its strategy. It is a continuous process in which the organization decides to implement a selected few strategies, details the implementation plan and keeps on appraising the progress and success of implementation through regular assessment.
This document provides an overview of enterprise risk management (ERM) and outlines steps for conducting an ERM program review. It defines ERM and lists its key components, including risk identification, measurement, monitoring, and control. The document then discusses conducting an ERM program gap analysis through gathering information, understanding the bank's risk approach, and documenting the program in a tool. Common gaps identified are lack of an ERM policy, enterprise risk assessment, risk appetite statement, key risk indicators, and periodic ERM reporting. Sample tools are presented to address these gaps.
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This document outlines Sun Pharmaceutical Industries Limited's Enterprise Risk Management policy. It defines key aspects of the company's ERM framework, including the following:
1. It establishes an ERM framework in accordance with international risk management standards to proactively manage risks across the company.
2. Key components of the framework include risk identification, assessment, treatment, monitoring, and accountability. Risk owners are responsible for managing risks in their areas.
3. The policy defines roles for the board, risk management committee, internal audit team, function heads, risk coordinators, and risk owners in implementing and maintaining the ERM system.
4. Risk appetite statements define thresholds for financial impacts and qualitative parameters to guide
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby...Donc Test
Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting, 8th Canadian Edition by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Ebook Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Pdf Solution Manual For Financial Accounting 8th Canadian Edition Pdf Download Stuvia Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Financial Accounting 8th Canadian Edition Ebook Download Stuvia Financial Accounting 8th Canadian Edition Pdf Financial Accounting 8th Canadian Edition Pdf Download Stuvia
In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
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Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
Let's be real for a second – the world of meme coins can feel like a bit of a circus at times. Every other day, there's a new token promising to take you "to the moon" or offering some groundbreaking utility that'll change the game forever. But how many of them actually deliver on that hype?
3. ERM Defined:
“… a process, effected by an entity's
board of directors, management and
other personnel, applied in strategy
setting and across the enterprise,
designed to identify potential events that
may affect the entity, and manage risks
to be within its risk appetite, to provide
reasonable assurance regarding the
achievement of entity objectives.”
Source: COSO Enterprise Risk Management – Integrated Framework. 2004.
COSO.
4. Why ERM Is Important
Underlying principles:
• Every entity, whether for-profit
or not, exists to realize value for
its stakeholders.
• Value is created, preserved, or
eroded by management decisions in
all activities, from setting strategy to
operating the enterprise day-to-day.
5. Why ERM Is Important
ERM supports value creation by enabling
management to:
• Deal effectively with potential future
events that create uncertainty.
• Respond in a manner that reduces
the likelihood of downside outcomes
and increases the upside.
6. This COSO ERM framework defines
essential components, suggests a
common language, and provides clear
direction and guidance for enterprise risk
management.
Enterprise Risk Management —
Integrated Framework
7. The ERM Framework
Entity objectives can be viewed in the
context of four categories:
• Strategic
• Operations
• Reporting
• Compliance
8. The ERM Framework
ERM considers activities at all levels
of the organization:
• Enterprise-level
• Division or
subsidiary
• Business unit
processes
10. • Management considers how
individual risks interrelate.
• Management develops a portfolio
view from two perspectives:
- Business unit level
- Entity level
The ERM Framework
12. Internal Environment
• Establishes a philosophy regarding risk
management. It recognizes that
unexpected as well as expected events
may occur.
• Establishes the entity’s risk culture.
• Considers all other aspects of how the
organization’s actions may affect its risk
culture.
13. Objective Setting
• Is applied when management considers
risks strategy in the setting of objectives.
• Forms the risk appetite of the entity — a
high-level view of how much risk
management and the board are willing to
accept.
• Risk tolerance, the acceptable level of
variation around objectives, is aligned
with risk appetite.
14. Event Identification
• Differentiates risks and opportunities.
• Events that may have a negative impact
represent risks.
• Events that may have a positive impact
represent natural offsets
(opportunities), which management
channels back to strategy setting.
15. Event Identification
• Involves identifying those incidents,
occurring internally or externally, that
could affect strategy and achievement
of objectives.
• Addresses how internal and external
factors combine and interact to
influence the risk profile.
16. Risk Assessment
• Allows an entity to understand the
extent to which potential events might
impact objectives.
• Assesses risks from two perspectives:
- Likelihood
- Impact
• Is used to assess risks and is normally
also used to measure the related
objectives.
17. Risk Assessment
• Employs a combination of both
qualitative and quantitative risk
assessment methodologies.
• Relates time horizons to objective
horizons.
• Assesses risk on both an inherent and a
residual basis.
18. Risk Response
• Identifies and evaluates possible
responses to risk.
• Evaluates options in relation to entity’s
risk appetite, cost vs. benefit of
potential risk responses, and degree to
which a response will reduce impact
and/or likelihood.
• Selects and executes response based on
evaluation of the portfolio of risks and
responses.
19. Control Activities
• Policies and procedures that help ensure
that the risk responses, as well as other
entity directives, are carried out.
• Occur throughout the organization, at
all levels and in all functions.
• Include application and general
information technology controls.
20. • Management identifies, captures, and
communicates pertinent information in
a form and timeframe that enables
people to carry out their responsibilities.
• Communication occurs in a broader
sense, flowing down, across, and up
the organization.
Information & Communication
21. Monitoring
Effectiveness of the other ERM
components is monitored through:
• Ongoing monitoring activities.
• Separate evaluations.
• A combination of the two.
22. Internal Control
A strong system of internal
control is essential to effective
enterprise risk management.
23. • Expands and elaborates on elements
of internal control as set out in COSO’s
“control framework.”
• Includes objective setting as a separate
component. Objectives are a “prerequisite” for
internal control.
• Expands the control framework’s “Financial
Reporting” and “Risk Assessment.”
Relationship to Internal Control —
Integrated Framework
24. ERM Roles & Responsibilities
• Management
• The board of directors
• Risk officers
• Internal auditors
25. Internal Auditors
• Play an important role in monitoring
ERM, but do NOT have primary
responsibility for its implementation
or maintenance.
• Assist management and the board or
audit committee in the process by:
- Monitoring - Evaluating
- Examining - Reporting
- Recommending improvements
26. Visit the guidance section of
The IIA’s Web site for The IIA’s
position paper, “Role of Internal
Auditing’s in Enterprise Risk
Management.”
Internal Auditors
27. • 2010.A1 – The internal audit activity’s plan
of engagements should be based on a risk
assessment, undertaken at least annually.
• 2120.A1 – Based on the results of the risk
assessment, the internal audit activity
should evaluate the adequacy and
effectiveness of controls encompassing the
organization’s governance, operations, and
information systems.
• 2210.A1 – When planning the engagement,
the internal auditor should identify and
assess risks relevant to the activity under
review. The engagement objectives should
reflect the results of the risk assessment.
Standards
28. 1. Organizational design of business
2. Establishing an ERM organization
3. Performing risk assessments
4. Determining overall risk appetite
5. Identifying risk responses
6. Communication of risk results
7. Monitoring
8. Oversight & periodic review
by management
Key Implementation Factors
29. Organizational Design
• Strategies of the business
• Key business objectives
• Related objectives that cascade
down the organization from key
business objectives
• Assignment of responsibilities to
organizational elements and leaders
(linkage)
30. Example: Linkage
• Mission – To provide high-quality
accessible and affordable community-
based health care
• Strategic Objective – To be the first
or second largest, full-service health
care provider in mid-size metropolitan
markets
• Related Objective – To initiate
dialogue with leadership of 10 top under-
performing hospitals and negotiate
agreements with two this year
31. Establish ERM
• Determine a risk philosophy
• Survey risk culture
• Consider organizational integrity
and ethical values
• Decide roles and responsibilities
32. Example: ERM Organization
ERM
Director
ERM
Director
Vice President and
Chief Risk Officer
Vice President and
Chief Risk Officer
Corporate Credit
Risk Manager
Corporate Credit
Risk Manager
Insurance
Risk Manager
Insurance
Risk Manager
ERM
Manager
ERM
Manager
ERM
Manager
ERM
Manager
StaffStaff StaffStaffStaffStaff
FES
Commodity
Risk Mg.
Director
FES
Commodity
Risk Mg.
Director
33. Risk assessment is the
identification and analysis of
risks to the achievement of
business objectives. It forms a
basis for determining how risks
should be managed.
Assess Risk
34. Environmental Risks
• Capital Availability
• Regulatory, Political, and Legal
• Financial Markets and Shareholder Relations
Process Risks
• Operations Risk
• Empowerment Risk
• Information Processing / Technology Risk
• Integrity Risk
• Financial Risk
Information for Decision Making
• Operational Risk
• Financial Risk
• Strategic Risk
Example: Risk Model
35. Source: Business Risk Assessment. 1998 – The Institute of Internal Auditors
Control It
Share or
Transfer It
Diversify or
Avoid It
Risk
Management
Process
Level
Activity
Level
Entity Level
Risk
Monitoring
Identification
Measurement
Prioritization
Risk
Assessment
Risk Analysis
36. DETERMINE RISK APPETITE
• Risk appetite is the amount of risk — on
a broad level — an entity is willing to
accept in pursuit of value.
• Use quantitative or qualitative terms
(e.g. earnings at risk vs. reputation
risk), and consider risk tolerance (range
of acceptable variation).
37. Key questions:
• What risks will the organization not
accept?
(e.g. environmental or quality compromises)
• What risks will the organization take
on new initiatives?
(e.g. new product lines)
• What risks will the organization
accept for competing objectives?
(e.g. gross profit vs. market share?)
DETERMINE RISK APPETITE
38. • Quantification of risk exposure
• Options available:
- Accept = monitor
- Avoid = eliminate (get out of situation)
- Reduce = institute controls
- Share = partner with someone
(e.g. insurance)
• Residual risk (unmitigated risk – e.g. shrinkage)
IDENTIFY RISK RESPONSES
40. Low
High
High
I
M
P
A
C
T
PROBABILITY
High Risk
Medium Risk
Medium Risk
Low Risk
Example: Call Center Risk
Assessment
• Loss of phones
• Loss of computers
• Credit risk
• Customer has a long wait
• Customer can’t get through
• Customer can’t get answers
• Entry errors
• Equipment obsolescence
• Repeat calls for same problem
• Fraud
• Lost transactions
• Employee morale
41. Control Risk Control
Objective Activity
Completeness Material Accrual of
transaction open liabilities
not recorded
Invoices accrued
after closing
Issue: Invoices go to field and AP is not aware of liability.
Example: Accounts Payable
Process
42. • Dashboard of risks and related responses
(visual status of where key risks stand relative
to risk tolerances)
• Flowcharts of processes with key controls
noted
• Narratives of business objectives linked to
operational risks and responses
• List of key risks to be monitored or used
• Management understanding of key business
risk responsibility and communication of
assignments
Communicate Results
43. Monitor
• Collect and display information
• Perform analysis
- Risks are being properly addressed
- Controls are working to mitigate risks
44. • Accountability for risks
• Ownership
• Updates
- Changes in business objectives
- Changes in systems
- Changes in processes
Management Oversight &
Periodic Review
45. Internal auditors can add value
by:
• Reviewing critical control systems and
risk management processes.
• Performing an effectiveness review of
management's risk assessments and
the internal controls.
• Providing advice in the design and
improvement of control systems and
risk mitigation strategies.
46. • Implementing a risk-based approach to
planning and executing the internal
audit process.
• Ensuring that internal auditing’s
resources are directed at those areas
most important to the organization.
• Challenging the basis of management’s
risk assessments and evaluating the
adequacy and effectiveness of risk
treatment strategies.
Internal auditors can add value
by:
47. • Facilitating ERM workshops.
• Defining risk tolerances where none
have been identified, based on internal
auditing's experience, judgment, and
consultation with management.
Internal auditors can add value
by:
48. For more information
On COSO’s
Enterprise Risk Management
— Integrated Framework,
visit
www.coso.org
or
www.theiia.org
Value is created by informed and inspired management decisions in all spheres of an entity’s activities, from strategy setting to operations. Entities failing to recognize the risks they face, from external or internal sources, and to manage them effectively can destroy value – in absolute or relative terms – for shareholders and other stakeholders, including the community and society at large.
For companies, shareholders realize value when they recognize value creation and benefit from share-value growth. For governmental entities, value is realized when constituents recognize receipt of valued services at acceptable cost.
Enterprise risk management:
Facilitates management’s ability deal effectively with potential future events that create uncertainty.
Provides the mechanisms to respond in a manner that reduces the likelihood of downside outcomes and increases the upside
Enhances the ability to communicate value creation and preservation programs and goals, communicate with stakeholders, and deliver as planned, with few surprises.
Value is created by informed and inspired management decisions in all spheres of an entity’s activities, from strategy setting to operations. Entities failing to recognize the risks they face, from external or internal sources, and to manage them effectively can destroy value – in absolute or relative terms – for shareholders and other stakeholders, including the community and society at large.
For companies, shareholders realize value when they recognize value creation and benefit from share-value growth. For governmental entities, value is realized when constituents recognize receipt of valued services at acceptable cost.
Enterprise risk management:
Facilitates management’s ability deal effectively with potential future events that create uncertainty.
Provides the mechanisms to respond in a manner that reduces the likelihood of downside outcomes and increases the upside
Enhances the ability to communicate value creation and preservation programs and goals, communicate with stakeholders, and deliver as planned, with few surprises.
Monitoring helps determine the effectiveness of the processes, technologies and personnel executing enterprise risk management. The entity establishes minimum standards for each component of enterprise risk management. The entity’s performance against these standards can then be monitored objectively.
Monitoring can be done in two ways: through ongoing activities or separate evaluations. Enterprise risk management mechanisms usually are structured to monitor themselves on an ongoing basis, at least to some degree.
Ongoing monitoring is built into the normal, recurring operating activities of an entity. Ongoing monitoring is performed on a real-time basis, reacts dynamically to changing conditions and is ingrained in the entity. As a result, it is more effective than separate evaluations.
The greater the degree and effectiveness of ongoing monitoring, the lesser need for separate evaluations. The frequency of separate evaluations is a matter of management&apos;s judgment. In making that determination, consideration is given to
the nature and degree of changes occurring, from both internal and external events, and their associated risks;
the competence and experience of the personnel implementing risk responses and related controls; and
the results of the ongoing monitoring.
Usually, some combination of ongoing monitoring and separate evaluations will ensure that enterprise risk management maintains its effectiveness over time.
Deficiencies in an entity’s enterprise risk management may surface from many sources, including the entity&apos;s ongoing monitoring procedures, separate evaluations and external parties. All enterprise risk management deficiencies that affect the entity’s ability to develop and implement its strategy and to achieve its established objectives should be reported to those who can take necessary action, as discussed in the next section
Risk Assessment - ERM encompasses the need for management to develop an entity-level portfolio view from two perspectives and highlights the notion of inherent and residual risk
Risk Response - ERM considers risk responses within categories of avoid, reduce, share and accept. Management considers these responses with the intent of achieving a residual risk level aligned with the entity’s risk tolerances. Having considered responses to risk on individual or group basis, management considers the aggregate effect of its risk responses across the entity.
The ERM framework elaborates on other components of IC-IF as they relate to enterprise risk management, most significantly the environment and information and communication
Enterprise risk management must also be applied in setting strategy, and there must be an entity level portfolio view.
Some differences include (note not all as time is limited):
The choice made by management and its implementation is part of management’s broader role, and are not part of ERM
The Internal Control – Integrated Framework specified the three objective categories of operations, external financial reporting and compliance. Enterprise risk management also specifies three objective categories – operations, reporting, and compliance. The reporting category expands the scope of financial reporting as defined in the Internal Control – Integrated Framework to include a broader array of reporting,
Event identification – ERM considers potential events, defining an event as an incident, or series of incidents emanating from internal or external sources that could affect the implementation of strategy and achievement objectives. ERM also considers alternatives in setting strategy, identifies events using a combination of techniques that consider both past and potential future events as well as emerging trends, considers what triggers events and groups potential events into risk categories.
The board of directors is responsible for overseeing management’s design and operation of ERM.
Knowing the extent to which management has established effective enterprise risk management in the organization;
Being aware of and concurring with the entity’s risk appetite;
Reviewing the entity’s portfolio view of risk, and considering it against the entity’s risk appetite; and
Being apprised of the most significant risks, and whether management is taking appropriate responses.
Management:
Is responsible for the design of an entity&apos;s enterprise risk management framework
Promotes the desired risk culture, frames risks in the context of strategy and activities
Establishes an entity-level risk appetite
Provides a portfolio view of risk
Enforces compliance individually and in the aggregate.
The risk officer works with managers in establishing and maintaining effective risk management in their areas of responsibility, has the resources to help effect enterprise risk management across subsidiaries, businesses, departments, functions and activities and may have responsibility for monitoring progress and for assisting managers in reporting relevant risk information up, down and across the entity and likely chairs internal risk management committees.
We will come back later on the specific role of internal auditors in ERM
Internal auditors contribute to the ongoing effectiveness of the enterprise risk management, normally by their participation in separate evaluations, but they do not have primary responsibility for establishing or maintaining ERM.