8 COSO Components

Nindita Rahmalaudina - C1L014037

1. Internal Environment

The internal environment sets the foundation for how risk is viewed and addressed by an entity’s people.

2. Objective-Setting

ERM ensures that management has in place a process to set objectives and that the chosen objectives support and align with the entity’s mission and are consistent with its risk appetite.

3. Event Identification

Internal and external events affecting the achievement of an entity’s objectives must be identified, distinguishing between risks and opportunities.

4. Risk Assessment

Risks are analyzed, considering likelihood and impact, as a basis for determining how they should be managed.

5. Risk Response

Management selects risk responses—avoiding, accepting, reducing or sharing risk—developing a set of actions to align risks with the entity’s risk tolerances and risk appetite.

6. Control Activities

Policies and procedures are established and implemented to help ensure the risk responses are effectively carried out.

7. Information and Communication

Relevant information is identified, captured and communicated in a form and timeframe that enable people to carry out their responsibilities.

8. Monitoring

Monitoring is accomplished through ongoing management activities, separate evaluations or both.

Sources: http://info.knowledgeleader.com/bid/163293/what-is-the-coso-enterprise-risk-management-framework