Risk Management Policies

Question 1

What is meant by the “tone at the top”

Answer 1

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

Question 2

According to COSO, what four critical accounting activities should be segregated?

Answer 2

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

Question 3

What is “risk appetite”

Answer 3

According to COSO, 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 risk

Question 4

Define Cross-Enterprise RIsk

Answer 4

A risk that occurs in multiple units in an organization. Ie., a security system breach that allowed unauthorized access to a system could occur at multiple sites or units within an organization

Question 5

Define Enterprise Risk Management

Answer 5

According to COSO, the methods and processes used by organizations to identify and manage the events and circumstances that influence the organization’s abiloty to achieve its objectives