Which of the following items is considered as an objective of the three dimensional model within
the framework described in COSO ERM?
A.
Risk assessment
B.
Financial reporting
C.
Control environment
D.
Monitoring
Explanation:
The COSO ERM (Enterprise Risk Management) frame work is a 3-dimentional model. The
dimensions and their components include:
Strategic Objectives – includes strategic, operations, reporting, and compliance.
Risk Components – includes Internal Environment, Objectives settings, Event identification, Risk
assessment, Risk response, Control activities, Information and communication, and monitoring.
Organizational Levels – include subsidiary, business unit, division, and entity-level.
The COSO ERM framework contains eight risk components:
Internal Environment
Objective Settings
Event Identification
Risk Assessment
Risk Response
Control Activities
Information and Communication
Monitoring
Section 404 of the Sarbanes-Oley act specifies a three dimensional model- COSO ERM,
comprised of Internal control components, Internal control objectives, and organization entities. All
the items listed are components except Financial reporting which is an internal control objective.
control objectives.