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COSO ERM: Enterprise Risk Management Framework - Coggle Diagram
COSO ERM: Enterprise Risk Management Framework
Enterprise risk management
Aligning risk appetite and strategy
Enhancing risk response decisions
Reducing operational surprises and losses
Identifying and managing multiple and cross-enterprise risks
Seizing opportunities
Improving deployment of capital
Events – Risks and Opportunities
Negative impact, positive impact or both
Negative impact - Risk, prevent value creation
Positive impact - off set negative impact, represent opportunities
Enterprise Risk Management Defined
Deals with risks and opportunities affecting value creation or
preservation
Achievement of Objectives
Strategic
– high-level goals, aligned with and supporting its mission
Reporting
– reliability of reporting
Compliance
– compliance with applicable laws and regulations
Components of Enterprise Risk Management
Internal Environment
- Organizational culture and risk appetite
Objective Setting
- Establishing aligned goals
Event Identification
- Recognizing risks and opportunities
Risk Assessment
- Evaluating risk likelihood and impact
Risk Response
- Avoidance, reduction, sharing, or acceptance
Control Activities
- Policies and procedures for mitigation
Information and Communication
- Ensuring risk transparency
Monitoring
- Continuous assessment and improvement
Relationship of Objectives and Components
Direct relationship between objectives and enterprise risk management components
Effectiveness
The components are also criteria
for effective enterprise risk management
Limitations
Encompasses Internal Control
Roles and Responsibilities
Operations
– effective and efficient use of its resources
Use of This Report
Board of Directors
Senior Management
Other Entity Personnel
Regulators
Professional Organizations
Educators