Question

Consider your assignments on Enterprise Risk Management this week and answer the following questions:

1. In what ways can you apply the COSO ERM Framework as a business professional?

2. In what ways can you apply the IMA Ethics standards as a business professional?

3. How is the IMA Statement of Ethical Professional Practice related to the 2017 COSO ERM Framework?

Answer:

Answer 1

1. COSO ERM Framework helps the organization to mitigate and manage the risks. COSO stands for the Committee of Sponsoring Organizations. The United States established the framework to engage the risk mitigation and anticipation process. The main motive of COSO is to determine the financial reports and make necessary recommendations. The business should apply the framework to mitigate the risks to avoid any losses. The market can analyze the environment with the help of COSO, and the structure will help the company determine the probable dangers. The company can evaluate the customers' demand levels to plan the supply process accordingly. The framework focuses on operations and the necessary compliance procedures. Hence, the structure will force the company to follow all the principles.

2. IMA's ethical principles include honesty, fairness, objectivity, and responsibility. The business can apply morality by avoiding any chances of theft, or misappropriation of assets. The managers should take into consideration the right and valuable practices to gain the trust of stakeholders. The fairness means just and ethical behavior towards employees and subordinates. The managers should be fair to all the employees irrespective of race, color, culture, and gender. Objectivity means integrity. The company should act as a single team. The team should work towards achieving a common goal. The last factor is the responsibility. The superior and subordinates should be accountable for any decision or task.

3. The 2017 COSO ERM Framework establishes more secure and easy ways to manage the risks in the enterprise. The framework should adopt the ethical values to ensure that the risk management system provides relevant results. The ethics will help the company to get correct anticipation. The unethical companies cannot gain the trust of stakeholders. Hence, the company should always be ethical in its operation. It is because the confidence of the stakeholders is the prime factor.