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Erm Paper Internal Auditing

In: Business and Management

Submitted By priyajakatdar
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Casualty Actuarial Society Committee on Enterprise Risk Management has adopted the following definition which includes the purpose of ERM :
“ERM is the discipline by which an organization in any industry assesses, controls, exploits, finances, and monitors risks from all sources for the purpose of increasing the organization’s short – and long-term value to its stakeholders.”
In the US, COSO published its ERM-Integrated framework in 2004. COSO identified a need for robust framework to help companies effectively identify, assess, and manage risk. The resulting framework has eight components and four objectives. The eight components are:- * Internal Environment- It encompasses the tone of an organization, and sets the basis for how risk and control are viewed and addressed by an entity’s people. * Objective setting –Objectives must be aligned with the organization’s risk appetite, which derives risk tolerance levels for the organization. * Event identification-Management identifies potential events that, if they occur, will affect the entity’s ability to successfully implement the strategy and achieve objectives adversely or positively. * Risk Assessment-It allows an entity to consider the extent to which potential events have an impact on achievement of objectives. * Risk response-It includes risk avoidance, reduction, sharing and acceptance. * Control Activities-These are the policies & procedures that help ensure the management’s risk responses are carried out. * Information and communication-“Pertinent information is identified, captured, and communicated in a form & time frame that enable people to carry out their responsibilities.” * Monitoring-ERM is monitored assessing the presence & functioning of its components over time.
The four objective categories are : * Strategy-High-level goals, aligned with and...

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