A process, effected by an entity's board of directors, management and other personnel, applied in strategy settings and across the enterprise, designed to identify potential events that may effect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives is:
A) enterprise risk management
B) internal control
C) organizational governance
D) risk assessment

Question

Quizplus · Accepted Answer

The definition provided describes the process of enterprise risk management (ERM), which involves identifying and managing risks that could affect an entity's objectives. ERM is a comprehensive approach to risk management that involves all levels of the organization and is led by the board of directors and management. Internal control is a component of ERM, focused on ensuring that risks are controlled within acceptable levels. Organizational governance encompasses the entire system of policies, processes, and practices by which an organization is directed, controlled, and held accountable. Risk assessment is a component of ERM, focused on identifying, analyzing, and evaluating risks to an organization. However, it does not capture the entire process of managing risk across the enterprise as ERM does.

A Process, Effected by an Entity's Board of Directors, Management