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What is the relationship between Inherent Risk and Control Risk?
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What is the difference between Inherent Risk and Control Risk?
Inherent Risk is embeded in the Model or the structure of the Company, such as Banks and financial institutions have an inherent risk of Robbery as cash is being handled at high volumes.This cant be controlled due to the basic structure of the business. The Auditor can not change this risk due to its embeded nature. Control Risk on the contrary is the Risk due to Internal Control implemented in order to minimize material misstatements. Management designs the internal control system in order to prevent material misstatement occurence. Auditor again cant change this and has to tune the Detection risk based on the level of these 2 risks.
What is the analysis of a situation to determine the level of risk inherent in that situation is called?
risk assessment
What does a risk control procedure aim to do?
A risk control procedure aims to reduce the risk levels. This is a mechanism that is implemented with the intention of minimizing the possible risk.
What does risk management encompass?
Risk Management encompasses the following:- Risk Identification- Risk Quantification and Analysis- Risk Response and Control
Is risk management about controlling risk not avoiding risk?
Avoidance is the best means to control the risk.If your efforts at avoiding the loss are successful it means you will save your business from the loss.That's why avoidance is considered as the first step in risk management process.But there is a difference between avoiding risk and accepting risk.Avoiding risk means that you are not going to do anything with the risk.But in accepting the risk you are actually doing something as you have accepted its impacts.
What are the three components of Audit risk?
Inherent Risk, Control Risk and Detection Risk
What is the difference between Inherent Risk and Control Risk?
Inherent Risk is embeded in the Model or the structure of the Company, such as Banks and financial institutions have an inherent risk of Robbery as cash is being handled at high volumes.This cant be controlled due to the basic structure of the business. The Auditor can not change this risk due to its embeded nature. Control Risk on the contrary is the Risk due to Internal Control implemented in order to minimize material misstatements. Management designs the internal control system in order to prevent material misstatement occurence. Auditor again cant change this and has to tune the Detection risk based on the level of these 2 risks.
What are the strategies that can be used to minimize or adapt to the political risk inherent to global business?
control, avoidance, and cooperative strategies
What are the elements of internal control?
An organization establishes a system of internal control to help it manage many of the risks it faces, such risks are classified as follows:- * Inherent Risk * Control Risk * Detection Risk Establishing an internal control is the responsibility of the management, the elements (components) of internal control framework are the following:- * Control environment * Risk Assessment * Control Activities * Information & Communication * Monitoring
Relationship between risk and return?
risk is pre-stage for return...
What are elements of internal control?
An organization establishes a system of internal control to help it manage many of the risks it faces, such risks are classified as follows:- * Inherent Risk * Control Risk * Detection Risk Establishing an internal control is the responsibility of the management, the elements (components) of internal control framework are the following:- * Control environment * Risk Assessment * Control Activities * Information & Communication * Monitoring
Discuss the relationship between investor protection and corporate risk-taking?
no relationship
How do you use inherent in a sentence?
There was determination inherent in his terse instructions to the workers. Mountain climbing has an inherent risk of injury or death.
Definition of risk return relationship?
the risk that is inherent simply by engaging in business with a third party. Any relationship with a vendor is inherently risky-a supplier, for example, may not deliver its goods per the contract terms, thus leaving your company without the (potentially important) product. Assessing relationship risk is essential in managing your vendors, especially the ones that are key to your company's successful operation.
When it comes to investing what is the usual relationship between risk and reward?
When it comes to investing, one general relationship between risk and reward is that taking more risk is associated with a greater return. However, in many cases there is no relationship between the two. For example, even though stocks tend to have a higher return than bonds, taking that risk does not guarantee a better return.
The analysis of a situation to determine the level of risk inherent in that situation is called?
risk assessment
Residual risk is determined when?
Residual risk is determined after you reassess the hazards as if the controls were in place.
