MANAGEMENT

Detailed explanation-1: -External risks are risks over which a company has no control-where the only possible action is mitigation. An internal risk is one where the organization has the power, within the firm, to prevent the risk. With this definition, the list of “internal” risks is quite lengthy. Consider, for example, a firewall.

Detailed explanation-2: -Risk assessments can be conducted internally or externally. Both options have pros and cons which can impact the results and the desired deliverables. External auditors test the underlying transactions that form the basis of the business function.

Detailed explanation-3: -Internal risks exist within your organization and are easier for you and your team to mitigate and manage. External risks happen outside of your organization and are typically beyond your control as a team or project manager.

Detailed explanation-4: -An external audit risk assessment can uncover information such as the presence of any outside pressures from competitors, changes in important relationships with company partners, issues related to pricing or cash flow and other economic pressures that could make the environment more risky.