Question

40 a) Which one of the following is NOT a benefit mentioned by Lam of using the ERM approach?

Select one:
a. better risk reporting
b. improved governmental relations with the firm
c. higher profits
d. a more cost efficient organzation

40 b)Which one of the following is NOT a responsibility of the CRO according to Lam?

Select one:
a.developing RM policies
b. providing overall risk leadership
c.communicating to key stakeholders that strategy is in place
d. Eliminating all risks for the firm
Clear my choice

Answer 1

Solution to first question

Enterprise risk management (ERM) is the process of identifying and addressing methodically the potential events that represent risks to the achievement of strategic objectives, or to opportunities to gain competitive advantage.

Therefore it benefits the user in all the three ways stated below.

a. better risk reporting

c. higher profits

d. a more cost efficient organization

And the ERM will never be improving the with the relations with the government.

Therefore the answer that is not the benefits of ERM is

b. improved governmental relations with the firm Solution to second question Typically, the CRO is responsible for the firm's risk management operations, including managing, identifying, evaluating, reporting and overseeing the firm's risks externally and internally to the organization and works diligently with senior management such as Chief Executive officer and Chief Financial Officer. As per Lam, CRO in any organization work closely with the board and other senior management to reduce or mitigate the risk. Following three options are the responsibilities of CRO a.developing RM policies b. providing overall risk leadership c.communicating to key stakeholders that strategy is in place But however the eliminating the all risk is not responsibility of the CRO So the answer of not responsibility of CRO is d. Eliminating all risks for the firm