Enterprise Risk Management ERM and Cyber Security Information Systems and Controls CPA exam ISC

In this video, we discuss enterprise risk management ERM as it relates to cyber security and covered on the Information Systems and Controls CPA exam ISC.
Start your free trial: https://farhatlectures.com/

The ERM (Enterprise Risk Management) framework is designed to streamline and unify the various risk management efforts across an organization, aiming to boost decision-making processes and improve overall performance. This framework is akin to the COSO (Committee of Sponsoring Organizations of the Treadway Commission) framework for internal controls but is specifically focused on risk management. The COSO ERM framework is comprised of several key components, although it's important to note that the framework traditionally identifies more than five core components. However, I'll clarify and expand on the core aspects commonly emphasized within ERM frameworks:

Governance and Culture: This component focuses on setting the tone at the top, establishing the foundation of risk management through leadership, organizational structure, and culture. It involves the commitment of senior management and the board of directors to a risk-aware culture, ethics, values, and the establishment of the necessary structures and practices to support risk management across the organization.

Strategy and Objective-Setting: This stage involves aligning the risk appetite of the organization with its strategy and objectives. It requires identifying business goals, assessing potential risks that could impact the achievement of these goals, and defining risk tolerance levels to guide decision-making.

Performance: This component is about the implementation of risk management strategies and assessing their performance. It includes identifying, assessing, and prioritizing risks, then implementing risk responses and activities to mitigate or capitalize on these risks. Performance metrics and indicators are used to measure how effectively risk management practices contribute to achieving strategic objectives.

Review and Revision: This involves regularly reviewing and updating the risk management process and strategies to ensure they remain effective and relevant. This component ensures that the organization can adapt to new risks and changes in the external and internal environment.

Information, Communication, and Reporting: Effective communication and the flow of information are crucial. This component ensures that risk-related information is captured, communicated, and reported timely and accurately across all levels of the organization. It supports transparency, informed decision-making, and accountability.

In essence, the ERM framework encourages a holistic approach to managing risks, ensuring they are identified, assessed, managed, and monitored in a way that aligns with the organization's strategic goals and enhances its value.



#cpaexaminindia #cpaexam #cpareviewcourse