Enterprise Risk Management ( Erm )

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Literature Review
Enterprise Risk Management (ERM) In light of the fraud scandals that took place in 2001 and 2002 companies all over the world have been introduced to a new system to help incorporate corporate governance, risk management, and the requirements made by the SOX. That new system is known as Enterprise Risk Management (ERM). The ERM system has been suggested to be the new system to help companies predict risk and help achieve their overall objectives (Arena, Arnaboldi, & Azzone, 2011). The Committee of Sponsoring Organizations of the Treadway Commission (COSO) has defined “ERM as a process, effected by an entity’s board of directors, management, and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives” (Arena, Arnaboldi, & Azzone, 2011, & Baxter, et al., 2013). In addition, the COSO identifies eight unified components that consist of the internal environment, objectives setting, event identification, risk assessment, risk response, control activities, information and communication, and monitoring (Arena, Arnaboldi, & Azzone, 2011). Companies who implement an ERM system and follow these eight components help to guarantee the accomplishment of the company’s overall objective across their different organizational levels. The ERM system entrenches
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