Question

What is the 2nd component of ERM?

1) Identification of potential events
2) Setting objectives
3) Aligning objectives with risk appetite
4) Supporting the entity's mission

Answer 1

The 2nd component of ERM is Setting objectives.

Step-by-step explanation:

The 2nd component of ERM is Setting objectives. After identifying potential events in the 1st component, the organization sets objectives for managing those risks. These objectives help determine the desired outcomes and guide decision-making processes to address the identified risks.