This component of the ERM framework encompasses the tone of an organization and sets the basis for how risk is viewed and addressed by an entity's people, including risk management philosophy and risk appetite, integrity and ethical values.
A)control activities
B)internal environment
C)risk assessment
D)risk response

Question

Quizplus · Accepted Answer

The internal environment component of the ERM framework includes the organization's tone, risk management philosophy, and values. It sets the foundation for how risk is perceived and addressed by the entity's people. Control activities pertain to specific actions taken to mitigate risk, risk assessment involves identifying and analyzing potential risks, and risk response deals with decisions on how to manage identified risks.

This Component of the ERM Framework Encompasses the Tone of an Organization