Company's industry,economic conditions, and competitive pressures. Understandable operations objectives give clear direcction as to how to allocate resources and are a key factor in corporate success.
Most compliance objectives,and many reporting objectives,are imposed by external entities due to laws or regulations. For. example, some. entities. must comply with requirements to submit information to government agencies,have to send reports to securities regulators. A company's reputation can be impacted significantly by how well it meets it's compliance and reporting objectives.
EVENT Identification
The third ERM component is event identification.visit defines an event as "an incident or occurrence emanating from internal or external sources that affects implementation of strategy or achievement of objectives. Events may have positive or negative impacts or both.,"
By their nature, events represent uncertainty. AN event may or may not occur. IF it does occur, it is hard to know when it will occur.Until it occurs,it may be difficult to determine it's impact on the company.when it occurs,it may trigger another event. Events may occur individually or concurrently.Therefore,management must. anticipate all possible events, whether positive or negative,that might affect the company.It must also determine which events are most and least. likely to occur, and it must understand the interrelationship of events.
Table 6-2 lists some of the many internal and external factors that Visit COSO indicated could influence events and affect a company's abilty to implement it's strategy and achieve it's objectives.Lists like these help management identify factors, evaluate their importance, and examine those that can affect objectives. IDENTIFYING events at the activity and entity levels allows companies to focus their risk assessment on major business units or functions and helps align the company's risk tolerance and risk appetite.
As an example of event identification, consider an organization that is implementing an electronic data interchange (EDI)