The main principles of risk management

 For COSO (1992), Risk Management is one of the five functions of

internal control

D. Garabiol – IPAG – janvier 2012

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 The main principles of risk management

 Risk Management (COSO 1992 / COSO1) :

> Identification of factors that may affect the achievement of the organization's
objectives
> The assessment of their probability of occurrence and the severity of their impact,
> Risk control and management systems,
> The integration of these devices into internal standards and procedures,,
> The existence of and compliance with internal standards and procedures for the
application of these systems..
 The COSO has specified the framework for risk management
in the company (known as COSO 2)
> An ERM (Enterprise Risk Management) cube applies to the Coso I risk
management function

D. Garabiol – IPAG – janvier 2012

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 The Enterprise Risk Management framework

 The revised COSO (2004)

 4 objectives
> The strategy
> Operations
> Reporting
> Compliance

D. Garabiol – IPAG – janvier 2012

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 The Enterprise Risk Management framework

 La Risk management is fragmented

In 4 risk management functions
> The definition of objectives
> Risk identification
> Risk assessment
> Preventive measures
 4 other functions complete
> The internal environment
> Routine controls
> The circulation of information
> The piloting

D. Garabiol – IPAG – janvier 2012

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 The Enterprise Risk Management framework
 Coso I  Coso 2
> Identification of factors that may > The definition of objectives
affect the achievement of the > Risk identification
organization's objectives, > Risk assessment
> Assessment of their probability of > Preventive measures
occurrence and severity of impact,
> Risk control and management
systems,
> The integration of these devices
into internal standards and > Routine checks
procedures,
> The existence of and compliance > Conformity
with internal standards and
procedures for the application of
these systems

D. Garabiol – IPAG – janvier 2012

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