Risk Management Standards - COSO ERM Cube

Question 1

What is the top face of the COSO ERM Cube?

Answer 1

SORC - Strategy, Operations, Reporting and Compliance

Question 2

What is the front face of the COSO ERM Cube?

Answer 2

The risk management approach stages.

Question 3

What is the right face of the COSO ERM Cube?

Answer 3

The levels of the organisation.

Question 4

What are the risk management approach stages defined by the COSO ERM Cube?

Answer 4

1. Internal environment - organisational tone and context.
2. Objective setting - objectives to be set before event identification.
3. Event identification - internal + external events impacting the achievement of objectives - risk vs. opportunities.
4. Risk assessment - likelihood + impact analysis.
5. Risk response - avoiding, accepting, reducing or sharing risk
6. Control activities - policies + procedures to help ensure risk responses are effective.
7. Information + communication - information is identified, captured and communicated so people fulfil their responsibilities.
8. Monitoring - EMR is monitored and adjustments are made accordingly.

Question 5

What are the levels of an organisation identified by the COSO ERM Cube?

Answer 5

1. Entity Level
2. Division
3. Business unit
4. Subsidiary

Question 6

What are the benefits of the COSO ERM Cube?

Answer 6

1. Increasing range of opportunity.
2. Identifying and managing risk firm wide.
3. Increasing positive outcomes and advantages while reducing negative surprises.
4. Reducing the variability of performance.
5. Improving resource deployment.
6. Enhancing enterprise resilience.