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Enterprise risk management (ERM) is a process designed to identify potential events that may affect an organization, to keep risk within acceptable levels, and to provide reasonable assurances regarding the achievement of organizational objectives. It is a process affected by an organization’s board of directors, management, and other personnel and is applied in strategy setting and across the enterprise. ERM has roots in the Committee of Sponsoring Organizations of the Treadway Commission (COSO), which developed a framework to help businesses and other entities assess and enhance internal control systems. This morphed into a process of risk management known as ERM.

The development of this framework was influenced by a number of high-profile business failures and scandals, with widespread disruptive consequences affecting not only company personnel and ...

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