BUISENESS MANAGEMENT
RISK MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The following statements are TRUE about the benefit of ERM EXCEPT?
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ERM provides the overall view of the risks involved promotes accountable risk management process.
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ERM allows better communication, monitoring and control with the engagement of the board of directors, top management, and various risk committees at production level.
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ERM can reduced risks arising from information asymmetry in operational level.
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ERM offers a good check and balance systems to ensure the quality of the bank’s assets are protected.
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Explanation:
Detailed explanation-1: -ERM supports better structure, reporting, and analysis of risks. Standardized reports that track enterprise risks can improve the focus of directors and executives by providing data that enables better risk mitigation decisions.
Detailed explanation-2: -The current framework includes eight components layered with four objectives – Strategic | Operations | Reporting | Compliance: Internal Environment – refers to the tone of the organization, its risk appetite and elements such as board oversight.
Detailed explanation-3: -The objective of enterprise risk management is to develop a holistic, portfolio view of the most significant risks to the achievement of the entity’s most important objectives.
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