Question

What is the 1st component of ERM?

1) Encompasses the tone of an organization
2) Sets the basis for how risk is viewed and addressed by an entity's people
3) Includes risk management philosophy and risk appetite, integrity and ethical values, and the environment in which they operate.

Answer 1

The 1st component of ERM is the tone at the top, which encompasses an organization's culture, values, and attitudes towards risk management.

Step-by-step explanation:

The 1st component of ERM (Enterprise Risk Management) is the tone at the top.

This encompasses the organization's culture, values, and attitudes towards risk management. It sets the foundation for how risk is viewed and addressed by the people within the organization.

The tone at the top includes elements such as risk management philosophy, risk appetite, integrity, ethics, and the overall environment in which the organization operates.