Why ERM Is Important Q ERM supports value creation by enabling management to n Deal effectively with potential future events that create uncertainty. n Respond in a manner that reduces the likelihood of downside outcomes and increases the upside. Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 16
16 Why ERM Is Important ⧫ ERM supports value creation by enabling management to: Deal effectively with potential future events that create uncertainty. Respond in a manner that reduces the likelihood of downside outcomes and increases the upside
Enterprise Risk Management Integrated Framework o This coso erm framework defines essential components, suggests a common language, and provides clear direction and guidance for enterprise risk management. Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 17
17 Enterprise Risk Management ——Integrated Framework ⧫ This COSO ERM framework defines essential components, suggests a common language, and provides clear direction and guidance for enterprise risk management
The erM framework t Entity objectives can be viewed in the context of four categories: a Strategic n Operations Internal Environment n Reporting Objective Setting Event Idehtification n Compliance Risk Assessment Risk R中 ponse Control activities Information communication Moniforing Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 18
18 The ERM Framework ⧫ Entity objectives can be viewed in the context of four categories: Strategic Operations Reporting Compliance
The erM framework A ERM considers activities at all levels of the organization: n Enterprise-level n Division or subsidiary n Business unit processes Internal Environment Objective Setting Event Idehtification Risk Risk Ro中 ponse Control Activit Information & ommunicption Moniforing Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 19
19 The ERM Framework ⧫ ERM considers activities at all levels of the organization: Enterprise-level Division or subsidiary Business unit processes
The erM framework Q Enterprise risk management requires an entity to take a portfolio view of risk Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity
20 The ERM Framework ⧫ Enterprise risk management requires an entity to take a portfolio view of risk