What is enterprise risk management (ERM)?
A) A process of evaluating internal controls to ensure operations are carried out efficiently and effectively
B) A process designed to identify material events that may affect the financial statements and to manage risk within the entity's risk appetite
C) A process, effected by an entity's board of directors, management, and other personnel designed to identify potential events that may affect the entity and to manage risk within its risk appetite
D) A process by which compliance with laws and regulations can be assessed

Question

Quizplus · Accepted Answer

Enterprise risk management (ERM) is a process that involves identifying potential events that may affect the entity and managing risk within its risk appetite. This process is carried out by an entity's board of directors, management, and other personnel. Option A describes internal control evaluation, Option B describes financial statement risk assessment, and Option D describes compliance assessment.

What Is Enterprise Risk Management (ERM)