COSO ERM Model for IC

Question 1

Igual que original COSO, ERM model shares a focus on

Answer 1

The what, where, and why of controls

Question 2

COSO ERM adds 3 control components to “what” dimension

Answer 2

1. Objective Setting
2. Event identification
3. Risk response

Question 3

Define risk response according to COSO ERM:

Answer 3

Management’s response to risk. Depending on mgt’s appetite for risk, observed risks may be avoided, reduced, shared, or accepted.

Question 4

ERM COSO adds additional IC Organizational Objective:

Answer 4

Strategic. (Others: Operations, Reporting, Compliance)

Question 5

Define Enterprise Risk Management

Answer 5

The methods and processes used by organizations to identify and manage the events and circumstances that influence the organization’s ability to achieve objectives.

Question 6

According to COSO, what 4 activities should be segregated

Answer 6

1. Authorizing
2. Recording
3. Safeguarding
4. Reconciling, oversight, and auditing

Question 7

Define “risk appetite”

Answer 7

The amount of risk exposure, or potential adverse impact from an event, that an organization chooses to accept or retain, as opposed to sharing, avoiding, reducing, or eliminating the risk.

Question 8

Define “cross-enterprise risk”

Answer 8

A risk that occurs in multiple units in an organization.

Question 9

Define “tone at the top”

Answer 9

The extent to which top management is ethical and proactive in establishing an ethical and moral tone & culture.

Question 10

Define “change agents”

Answer 10

They promote and facilitate change related to the system of I/C. They act as catalysts; they meet w system stakeholders, and coordinate resources, to ensure that changes are understood and embraced by those stakeholders.

Question 11

Critical Elements in Managing change in the system of I/C:

Answer 11

1. Change agents
2. Impediments to system user and designer communication
3. Management commitment and support

Question 12

According to COSO ERM, the goals of risk management include: (6)

Answer 12

1. Aligning risk appetite and strategy
2. Improving risk responses
3. Reducing operational surprises and losses
4. Identifying and managing multiple and cross-enterprise risks
5. Seizing opportunities
6. Improving capital deployment

Question 13

Define “expected value”

Answer 13

Calculates and integrates the likelihood of losses with amount of losses.