This Component of the ERM Framework That Encompasses the Tone

question 5

Multiple Choice

This component of the ERM framework that encompasses the tone of an organization and sets the basis for how risk is viewed and addressed by an entity's people, including risk management philosophy and risk appetite, integrity and ethical values and the environment in which they operate.

• A) control activities
• B) internal environment
• C) risk assessment
• D) risk response

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Definitions:

Inventory Costing Methods

Refers to the techniques used to determine the value of an inventory, including LIFO (Last In, First Out), FIFO (First In, First Out), and weighted average methods.

Consigned Merchandise

Goods that are sent by one party to another to sell, with payment to the consignor occurring only after the sale.

Consignee's Inventory

Goods that are held by a consignee but still legally belong to the consignor until sold, after which sales revenue is shared as per agreement.

Decreasing Costs

A situation where the total cost of production goes down as the volume of production increases.