Which of the following best describes the underlying premise of the COSO enterprise risk management framework?
Which of the following best describes the underlying premise of the COSO enterprise risk management framework?
The COSO enterprise risk management (ERM) framework is fundamentally about creating and preserving value for the entity's stakeholders. This premise recognizes that businesses exist to generate value, and effective risk management practices are geared towards both maximizing opportunities and minimizing setbacks in achieving this goal. Therefore, the best description of the underlying premise of COSO ERM is that every entity exists to provide value for its stakeholders.
why B ???
Why not D?
Enterprise risk management can minimize the impact and likelihood of unanticipated events, describes one of the benefits of the COSO ERM framework, it does not capture the core underlying premise of the framework. The primary premise of COSO ERM is broader and focuses on value creation and preservation for stakeholders, as stated in option B.