The COSO Cube helps us look at the entire enterprise risk management model of the organization and focus on individual parts. Enterprise risk management (ERM) is the process of planning, organizing, directing and controlling the activities of an organization to minimize the effects of risk on our capital and profits. In another way, enterprise risk management is a way to chart a path and use tools and techniques to stay on that path. Although COSO guidance is not mandatory, it has great influence and many benefits in frameworks because risk management and internal control systems can be evaluated and improved. At the top of the cube are goals such as our strategic goals, operational goals, financial reporting goals, and compliance goals. Say no to plagiarism. Get a tailor-made essay on “Why violent video games should not be banned”? Get an original essay The importance of financial reporting and compliance reflects the legacy and context in which the frameworks were created by a multitude of banks and Enron WorldCom have asked these questions in the public and it is only a corporate conscience. On the front of the cube, we have eight components needed to complete the objectives on the top of the cube. The third and final dimension of the cube divides the organization into different levels, it is about focusing on each part of the organization as well as the whole and emphasizing that each component applies from the board of directors global down to operational units. At the beginning of the third dimension we have the entity which represents the entire organization within which it is divided into each division, business unit and subsidiaries. Internal environment. On the top edge of the front of the cube, we have our first component, the internal environment. This is because the tone of the organization influences risk appetite and attitudes towards risk management and ethical values. Ultimately the tone of the company is set by the board, a board lacking technical knowledge or diverse experiences or an independent voice is unlikely to set the right tone, the work done by directors in board committees can also make a significant contribution to the tone of audit and risk committees. have an important role to play here. Returning to the levels of our organization, it is important to remember the importance of management at the divisional and business unit level. Control mechanisms will only work if they are used correctly. Management tolerating staff ignoring controls or focusing on success rather than results and responsible risk management are our recipes for failure. Goal Setting The organization must have a clear vision and the board sets goals that support that vision. The vision and goals should be consistent with your risk appetite. For the board to be able to set goals effectively, it must be aware of the risks associated with increasing different goals and issues. The board must also consider risk appetite and take a holistic view of the level of risk it is willing to accept. The board will consider a tolerance that corresponds to the acceptable variation around individual goals as part of this process. The objectives must be.