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Risk management

2.3 Eight components:

 Internal environment.

 Objective setting.

 Event identification.

 Risk assessment.

 Risk response.

 Control activities.

 Information and communication.

 Monitoring.

2.4 Benefits of ERM

 Enhanced decision making by integrating risks.

 Improvement in investor confidence, and hence shareholder value.

 Focus of management attention on the most significant risks.

 A common language of risk management.

 Reduced cost of finance.

Illustrations and further practice

Now try TYU 1 and 2 from Chapter 2

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