The main aim of a GRC (Governance, Risk, Compliance) framework is to minimize risks associated with governance, compliance, and operational activities.
Components of GRC
Governance
Risk Management
Compliance
Not a Component
C) Customer Relationship Management (CRM is not part of GRC)
Compliance in GRC
B) Compliance
The 'C' in GRC stands for Compliance, which involves ensuring that the organization follows relevant laws, regulations, and standards.
Types of Risks
External Risk Example
C) Economic Downturn
External risks are typically outside the organization’s control and include factors like economic conditions.
Regulatory Frameworks
GDPR (General Data Protection Regulation)
Governs data protection and privacy in the European Union.
Statements and Responsibilities
Risk Appetite Statement
Purpose: A) To outline the organization’s tolerance for risk
Chief Risk Officer (CRO)
Key Responsibility: C) Overseeing risk management processes
Compliance Programs
Key Inclusions:
Risk Assessment
Policy Development
Training and Education
Not Included:
D) Product Development
Control Self Assessment (CSA)
Purpose: C) To identify and mitigate risks
Types of Risks
Strategic Risk Example
B) Competitive Pressure
Refers to risks that affect an organization’s long-term goals and competitive position.
Business Impact Analysis (BIA)
Main Goal: C) Identifying critical business functions
Control Types
Preventive Control Example
A) Security Cameras
Implemented to prevent incidents or minimize their impacts.
Acronyms
SOX (Sarbanes-Oxley Act)
Risk Register
Purpose: B) To document identified risks
Essential tool for tracking risks within an organization.
Role of Internal Auditors
Not Typically Included: C) Developing marketing campaigns
Internal auditors focus on evaluating financial controls, compliance with regulations, and investigating fraud allegations.