Which component of the ERM framework is best described here: Internal and external events affecting achievement of an entity's objectives must be identified, distinguishing between risks and opportunities. Opportunities are channeled back to management's strategy or objective-setting processes.
A) control activities
B) event identification
C) risk assessment
D) risk response

Question

Quizplus · Accepted Answer

The component of the ERM framework best described in this statement is event identification, as it emphasizes the need to identify both internal and external events that may affect the achievement of an entity's objectives, and distinguish between risks and opportunities. The second part of the statement also highlights the importance of channelling opportunities back to management's strategy or objective-setting processes. While control activities, risk assessment, and risk response are also important components of the ERM framework, they are not as directly related to the identification and management of events and opportunities as event identification.

Which Component of the ERM Framework Is Best Described Here