6. 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.
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11. The ERM Framework The eight components of the framework are interrelated …
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32. Example: ERM Organization ERM Director Vice President and Chief Risk Officer Corporate Credit Risk Manager Insurance Risk Manager ERM Manager ERM Manager Staff Staff Staff FES Commodity Risk Mg. Director
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35. Risk Analysis Source: Business Risk Assessment. 1998 – The Institute of Internal Auditors Control It Share or Transfer It Diversify or Avoid It Risk Management Process Level Activity Level Entity Level Risk Monitoring Identification Measurement Prioritization Risk Assessment
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39. Impact vs. Probability Control Share Mitigate & Control Accept High Risk Medium Risk Medium Risk Low Risk Low High High I M P A C T PROBABILITY
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41. Example: Accounts Payable Process Control Risk Control Objective Activity Completeness Material Accrual of transaction open liabilities not recorded Invoices accrued after closing Issue: Invoices go to field and AP is not aware of liability.
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49. This presentation was produced by Applying COSO’s Enterprise Risk Management — Integrated Framework
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