ERM COSO Presentation - Applying COSO's Enterprise Risk...

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  Applying COSO’s Enterprise Risk Management —  Integrated Framework September 29, 2004
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    Today’s organizations are concerned  about: Risk Management Governance Control Assurance (and Consulting)
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    COSO Definition of Internal Control   “Internal control is a process to provide  reasonable assurance of accomplishing  objectives. Specifically, it helps achieve  objectives relating to reliability of  financial reporting, compliance with laws and regulations, and effectiveness and  efficiency of operations.” 
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    ERM Defined: “… a process, effected by an entity's board of  directors, management and other personnel,  applied in strategy setting and across the  enterprise, designed to identify potential events  that may affect the entity, and manage risks to  be within its risk appetite, to provide reasonable  assurance regarding the achievement of entity  objectives.” Source:  COSO Enterprise Risk Management – Integrated Framework .  2004. COSO.
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    Why ERM Is Important  Underlying principles: Every entity, whether for-profit  or not, exists to realize value for  its stakeholders. Value is created, preserved, or eroded by  management decisions in all activities,  from setting strategy to operating the  enterprise day-to-day. 
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    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. 
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    This COSO ERM framework defines essential components, suggests a common language, and provides clear direction and guidance for enterprise risk management. Enterprise Risk Management  —  Integrated Framework 
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    The ERM Framework Entity objectives can be viewed in the context of four categories: Strategic Operations Reporting Compliance
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    The ERM Framework ERM considers activities at all levels of the organization: Enterprise-level Division or subsidiary Business unit processes
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    Enterprise risk management requires an entity to take a  portfolio  view  of risk.   The ERM Framework
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    Management considers how  individual risks interrelate. Management develops a portfolio view  from two perspectives: - Business unit level - Entity level The ERM Framework
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    The eight components of the framework are interrelated The ERM Framework
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    Internal Environment Establishes a philosophy regarding risk  management. It recognizes that unexpected  as well as expected events may occur. Establishes the entity’s risk culture.
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This note was uploaded on 03/25/2011 for the course ACC 413 taught by Professor Cannon during the Winter '11 term at Grand Valley State University.

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ERM COSO Presentation - Applying COSO's Enterprise Risk...

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