ExpertEasy1 markMultiple Choice
CPA · Question 10 · Area I: Business Analysis
Under the COSO Enterprise Risk Management (ERM) framework, which component addresses the organization's core values, ethical values, and the operating structure?
Under the COSO Enterprise Risk Management (ERM) framework, which component addresses the organization's core values, ethical values, and the operating structure?
Answer options:
A.
Governance and Culture
B.
Strategy and Objective-Setting
C.
Performance
D.
Information, Communication, and Reporting
How to approach this question
Recall the 5 components of COSO ERM (2017): Governance & Culture, Strategy & Objective-Setting, Performance, Review & Revision, Information, Communication & Reporting.
Full Answer
A.Governance and Culture✓ Correct
A
Governance and Culture is the component that sets the organization's tone, reinforcing the importance of, and establishing oversight responsibilities for, enterprise risk management. It includes ethical values and desired culture.
Common mistakes
Confusing with the Internal Control framework (CRIME); mixing up Strategy with Governance.
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