CH10: Monitoring and Reporting on Risk

Question 1

Benefit of Risk reporting and monitoring

Answer 1

1. Measure confidence in organization’s ability to manage risk

Question 2

What is risk assurance?

Answer 2

level of confidence in the organization’s risk management practices, culture, procedure to effectively manage it;s risk.

Question 3

Higher risk assurance

Answer 3

reduces cost on the risk.

Question 4

Characteristics of a high level of risk assurance

Answer 4

1. Board of directors oversight of risk management,
2. Risk management is integrated in all levels of management,
3. Effective and informative and useful risk reporting system,
4. Culture of RM w/i the organization (there must be a risk owner).

Question 5

Board oversightL

Answer 5

the Board oversees broad categories of risk especially strategic risk (b/c it includes long term planning), also operational, and financial risk. Not hazard b/c it is external.

legally imposed obligations for the board to oversee risk management.

Board may elect to oversee priority risks and delegate other risks to committees or to management.

Question 6

2 Committees focusing on risk oversight (under the Board of Directors).

Answer 6

1. Audit Committee
   Assess Compliance with standards
2. Risk Committee
   sets standards and evaluate the appropriateness of standards
   Define the risk appetite and risk tolerance

Question 7

RM

Answer 7

integrated at all levels of management (ERM) consider COSO risk management framework

Question 8

Internal control can

Answer 8

reduce uncertainty by:

1. Establishing lines of authority and responsibilities for RM at all levels
2. communicating up and down the organization and w/i departments.