BUISENESS MANAGEMENT
RISK MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Residual Risk level should be higher than Inherent Risk level
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Residual Risk level should be lower than Expected Risk level
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Expected Risk level could be same as Residual Risk level
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Expected Risk level must be same as Residual Risk level
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Detailed explanation-1: -Residual Risks The objective of the introduction of a control is to eliminate or lower identified risks. If the calculated risks are acceptable due to the adopted corrective actions, then the residual risk is called as acceptable risk, i.e., it will not result to any irreversible, serious injury or death.
Detailed explanation-2: -Residual risk also known as inherent risk is the amount of risk that still pertains after all the risks have been calculated, to put it in simple words this is the risk that is not eliminated by the management at first and the exposure that remains after all the known risks have been eliminated or factored in.
Detailed explanation-3: -What is residual risk? Residual risk is the risk that remains after controls are accounted for. It’s the risk that remains after your organization has taken proper precautions.
Detailed explanation-4: -The Inherent risk appetite defines what strategies can / cannot be even brought to the table. The residual risk appetite specifies that only where it is possible to control the risk to the residual risk appetite level, may the strategy be pursued.