Chapter 2 Flashcards
What are portfolio view risk
they examines risk at the entity level
What are profile view risk
consider risk at a more granular level
Explain Enterprise risk management
ERM is the process of identifying, categorizing , prioritizing and responding to company risks
What are the fours steps of ERM
Identify
Categorize
Prioritizing
Response
What are risk statement
they contain the issues and what the outcome could be
What are the two type of risk that could happen in a company
internal and external
Internal risk are
occur during a company operations and arise during normal operations
External risk are
risk that are outside the company
What are the three major internal risk
Operational
Financing
Reputational
What are operational risk
occurs when there are ineffective internal controls
What are the external risk
Compliance
Strategic
physical
What example of Operational risk
technology interruption
What example of financial risk
failed investment
What example reputational risk
data breach making the news
Example compliance risk
regulatory fines
example of strategic risk
beaten by competitor
Example of physical risk
natural disaster
What are risk management
is require to have excellent critical thinking and decision making skills to understand the entire situation and come up with a reponses
Explain risk appetite
the amount of risk a company is willing to take on a particular time
What are the four risk responses
accept
mitigate
tranfser
avoid
What are residual risk
the remaining risk after a plan to respond to the risk is in place
