Exam (elaborations)
Internal Audit Ch 4- Risk Management questions with answers.
- Course
- Institution
Internal Audit Ch 4- Risk Management questions with answers.
[Show more]
Seller
Follow
Content preview
Internal Audit Ch 4- Risk Managementquestions with answers.
COSO definition of Risk ANS - possibility that an event will occur and adversely affect the achievement
of an objective
ISO 31000 definition of Risk ANS - the effect of uncertainty on objectives
Risk ANS - any issue that will keep you from achieving your objectives
Why has Risk Management become a hot topic? ANS - historical methods have been insufficient for
today's business and regulatory environment
-risk management has been done informally or in organizational silos
-"risk surprises" have occurred in organizations without a formal process to evaluate and communicate
risk management activities
Business Drivers for better Risk Management ANS - -financial losses and/or damaged reputation from
actual risk events
-challenging global and volatile economic environment
-investors demanding more corporate visibility and accountability for risk management
-rating agencies evaluating risk management program effectiveness
-increasing risks from technology
Regulatory Drivers ANS - NYSE requires audit committees to discuss risk management- 2003
SEC Proxy Disclosure rules- 2009
financial institutions have more rigorous requirements around risk management
, Enterprise Risk Management (ERM) ANS - process conducted by management to understand and deal
with uncertainties (risks and opportunities) that could affect the organization's ability to achieve
objectives
ERM adds organizational value ANS - -involves board in discussion
-helps align or around enterprise strategy, increasing likelihood of achieving objectives
-creates common language and approach to managing risk efficiently
-provides routine process that updates organizational risk profile
-increases management confidence related to taking on new initiatives
-results in cost reduction opportunities by reducing surprises and increasing efficiency of internal risk
management spend
COSO ANS - National Commission on Fraudulent Financial Reporting- organized in 1985 by 5 major
professional organizations in reaction to instances of fraud in 1970s
studied financial reporting systems for 2 years
COSO defines ERM as a process that is ANS - -tied to organization's strategic goals
-geared to the achievement of objectives
-designed to identify emerging events with the potential to affect the entity, assess the potential impact
consistently and to manage risk within a pre-determined risk appetite
-built into routine business practices
-applied across the enterprise
COSO 3 Foundational Aspects ANS - 1. starts with objectives
a. strategic
b. operations
c. reporting
d. compliance
2. applies to activities at all levels of organization
3. has eight interrelated elements
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Professorkaylee. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.59. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
82956 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now