Does The Company Articulate Its Risk Appetite And Define Risk Tolerances For Use In Managing The Business?
Answers
Answer:
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Explanation:
The risk appetite dialogue helps to bring balance to the conversation around which risks the enterprise should take, which risks it should avoid and the parameters within which it should operate going forward. The risk appetite statement is decomposed into risk tolerances to address the question, “How much variability are we willing to accept as we pursue a given business objective?” For example, separate risk tolerances may be expressed differently for objectives relating to earnings variability, interest rate exposure, and the acquisition, development and retention of people.
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Answer:
☬: the amount and type of risk an organization is willing to accept in pursuit of its business objectives. Risk tolerance: the specific maximum risk that an organization is willing to take regarding each relevant risk. ... Exceeding risk limits will typically act as a trigger for management action.