Enterprise Risk Management (Preview)

38 Part 1 – Concepts and Methods REVIEW QUESTIONS 1. Nature of risk a) Explain the nature of risk. b) Explain the difference between risk management and ERM. c) Why do organizations need to take risks? d) What external forces create risks? e) Outline three important risks identified in the ERM initiative survey. 2. Evolution of risk management a) What industries and professions influenced the evolution of risk management? b) Briefly explain the nature of the influences of these industries and professions. b) Explain the difference between conventional and contemporary risk management. 3. Landmark events and reforms a) What landmark events and reforms impacted risk management? b) Explain the SEC requirements for reporting risk information in annual reports. c) What does S&P look for when assessing ERM practices in general? 4. Risk management guidance a) Briefly describe the COSO ERM framework. b) Briefly describe the ISO Risk Management guideline. 5. Organizational transformations a) Why is there pressure on boards of directors to improve risk management? b) What industries tend to have a greater level of implementation of ERM and why? c) What are the three transformative effects of ERM on organizations? d) Briefly describe one of the three transformative effects. 6. Organizational transformations – Challenges encountered a) What eight challenges are encountered by organizations implementing ERM? b) Briefly explain two of those challenges. 7. Benefits of ERM a) What are the two most important benefits of ERM? b) Give five examples of outcomes that should be expected from ERM. 8. Limitations of ERM a) Explain the limitations of ERM. RESEARCH ASSIGNMENTS 1. What risk factors did Apple outline in its latest annual report (SEC Form 10K)? • What are Apple’s top three risks from your perspective? • Please explain what motivates your selection of the top three risks. 2. How will driverless vehicles disrupt the automobile and insurance industries? • Also, what are implications for public transportation and urban development?