QUESTION 3 Essay Example | Topics and Well Written Essays - 500 words

QUESTION 3 - Essay ExampleCompanies can adapt the principles into their policies, rules, and regulations to enhance their performance. Handling these obstacles and balancing the risks with the fraternity growth and return goals to avoid facing challenges from uncertainty, Enterprise (2004) outlines internal environment, objective setting, event identification, risk assessment, information and communication, risk response, control activities, and supervise as the octonary principal factors warranting attention in that order(1) ERM helps the fraternity to prevent risk by creating a good environment within the firm. The risk will be identified by including risk management philosophy, risk appetite, integrity and will be monitored by the firms people. (2) Management should set up the objectives sooner identifying the risk to ensure that it aligns with the companys mission and risk appetite is appropriately factored in. (3) A company should identify both internal and external events that lead an impact on its success and distinguish between risks and opportunities. (4) A company can deal with and respond to the risks effectively by setting up and implementing policies and procedures. (5) The company should identify, capture, and communicate the relevant information across the organization in a suitable format and timeframe so that its workforce has total clarity and are accountable to their duties. (6) Management can decide a set of actions to respond to risks by avoiding, accepting, reducing, or sharing risk along the companys risk tolerances road map and risk appetite. (7) In order to manage the risks, the company should analyze the likelihood and impact of them and evaluate on an inherent and a residual basis. (8) Dynamically monitoring the whole process of activities by independent evaluations, and modifying some points when necessary represents the ultimate flexibility of ERM, rendering it complete and effective.While abiding by