​Which of the Following Is True of Enterprise Risk Management

question 63

Multiple Choice

​Which of the following is true of enterprise risk management (ERM) ?

• A) ​Enterprise risk management helps an organization make better decisions in uncertain business environments.
• B) ​Only small organizations with sales revenue of $1 million or less engage in some type of ERM.
• C) ​Most organizations in the world already have perfect ERM systems.
• D) ​The most important reason for using enterprise risk management is to ensure complete elimination of all risks that an organization may face.

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Definitions:

Capital Expenditures Budget

A financial plan for a company's planned investments in long-term assets and projects.

Cash Budget

A forecast of cash inflows and outflows over a specified period, used to manage cash flow and ensure liquidity.

Factory Overhead Budget

An estimation of all the costs, other than direct labor and direct materials, that are involved in manufacturing a product over a specific period.

Raw Materials Purchases

The acquisition of the basic materials and components required for the production of goods.