Intermediate Financial Management
14th Edition
ISBN: 9780357516782
Author: Brigham, Eugene F., Daves, Phillip R.
Publisher: Cengage Learning
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Question
Chapter 24, Problem 5MC
Summary Introduction
Case summary: A mid-sized company TSI has hired a financial analyst. The company creates the exotic sauces from imported fruits and vegetables. The CEO of the company has asked the financial analyst to make a report on enterprise risk management thus company’s executive may gain knowledge about enterprise risk management as no one knows about it in the organization.
To discuss: Some of the risk events for each risk category.
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Students have asked these similar questions
a)discuss the following risks: operational risk, model risk, liquidity risk, accounting risk, legal risk, tax risk, regulatory risk, settlement (Herstatt) risk, systemic risk
b)compare and contrast view-driven risk management and needs-driven risk management.
c)identify the key players in the risk management industry, and discuss how risk management requirements and practices differ amongst these key players.
d)discuss some important organizational considerations for an effective risk management system.
e)explain what is meant by enterprise risk management, and compare and contrast it with decentralized risk management.
Why risk management process is essential in addressing risks that the organization is facing?
Describe some of the risks events within the following major categories of risk: (1) strategy andreputation, (2) control and compliance, (3) hazards,(4) human resources, (5) operations, (6) technology,and (7) financial management.
Chapter 24 Solutions
Intermediate Financial Management
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Similar questions
- Describe a situation in risk management that involves ethical aswell as financial issues.arrow_forward1. How does internal control impart on the achievement of organization’s goals? 2. Why risk management process is essential in addressing risks that the organization is facing? 3. Differentiate qualitative and quantitative assessment of risks.arrow_forward1. Looking at the COSO framework for Enterprise Risk Management, you will notice that this is present all throughout the various functions and levels in an organization. This is to ensure that policies and procedures are followed in making risk responses and implementing company's directives. A. Control Activities B. Risk Assessment C. Monitoring Activities D. Risk Culturearrow_forward
- What are the primary tasks and Education, Training, & Certification, the primary industries of a risk manager?arrow_forward4. Which of the following are true regarding internal auditors and the adequacy of an organization’s risk management process I. Internal auditors must understand the risk assessment process and the tools used to make the assessment II. Internal auditors should determine the level of risks acceptable to the organization III. Internal auditors need to be satisfied that the key objectives of risk management processes are being met IV. Internal auditors should evaluate management’s risk processes the same way they analyze risk when planning an engagement Group of answer choices I and III only I, II, III and IV None of the choices I, II and III only I and II onlyarrow_forwardWhich of the following are true regarding internal auditors and the adequacy of an organization's risk management process 1. Internal auditors must understand the risk assessment process and the tools used to make the assessment II. Internal auditors should determine the level of risks acceptable to the organization III. Internal auditors need to be satisfied that the key objectives of risk management processes are being met IV. Internal auditors should evaluate management's risk processes the same way they analyze risk when planning an engagement O I II, III and IV O None of the choices O , Il and III only O l and Il onlyarrow_forward
- Which of the following are true regarding internal auditors and the adequacy of an organization's risk management process I. Internal auditors must understand the risk assessment process and the tools used to make the assessment II. Internal auditors should determine the level'of risks acceptable to the organization III. Internal auditors need to be satisfied that the key objectives of risk management processes are being met IV. Internal auditors should evaluate management's risk processes the same way they analyze risk when planning an engagement O , II, III and IV O None of the choices OI, Il and III only O l and II only O l and III onlyarrow_forwardCompany management completes event identification and assesses the severity of risk. Management then acts to alter the severity of risk. According to COSO’s ERM framework, the risk remaining after management’s actions is A. Inherent risk. B. Actual residual risk. C. Event risk. D. Target residual risk.arrow_forwardWhich of the following are true regarding internal auditors and the adequacy of an organization’s risk management process: I. Internal auditors must understand the risk assessment process and the tools used to make the assessment II. Internal auditors should determine the level of risks acceptable to the organization III. Internal auditors need to be satisfied that the key objectives of risk management processes are being met IV. Internal auditors should evaluate management’s risk processes the same way they analyze risk when planning an engagement Choices: a. I and III only b. I and II only c. None of the choices d. I, II, III and IV e. I, II and III onlyarrow_forward
- Following is a list of internal controls. Select the COSO component that best matches each internal control. Internal control a. Implementation of policies to reduce risk of internal control failure. b. Reporting of internal control effectiveness to investors. c. Evaluation of internal control effectiveness by external auditors. d. Identification and management of risks. COSO Control activities Information & communication Monitoring Risk assessment Control environment Assessmarrow_forwardEnterprise risk management A. Guarantees achievement of organizational objectives. B. Requires establishment of risk and control activities by internal auditors. C. Involves the identification of events with negative impacts on organizational objectives. D. Includes selection of the best risk response for the organization.arrow_forwardWhen assessing the risk associated with an activity, an internal auditor should: Provide assurance on the management of the risk. Update the risk management process based on risk exposures. Determine how the risk should best be managed.arrow_forward
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