BUISENESS MANAGEMENT
RISK MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Inherent Risk
|
|
|
Residual Risk
|
|
|
Cause
|
|
|
Risk Rating
|
Detailed explanation-1: -Inherent risk is an error or omission in a financial statement due to a factor other than a failure of internal control. Control risk, on the other hand, refers to the misstatement of financial statements due to sloppy accounting practices.
Detailed explanation-2: -Inherent Risk is typically defined as the level of risk in place in order to achieve an entity’s objectives and before actions are taken to alter the risk’s impact or likelihood. Residual Risk is the remaining level of risk following the development and implementation of the entity’s response.
Detailed explanation-3: -1. The introduction of five new inherent risk factors to aid in risk assessment: subjectivity, complexity, uncertainty, change, and susceptibility to misstatement due to management bias or fraud.