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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.
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What is the analysis of a situation to determine the level of risk inherent in that situation is called?
risk assessment
What is the difference between a 'policy' and a 'framework' specifcally in the context of risk management?
What is the difference between Education framework and plicy.
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 is the difference between the traditional risk management and enterprise risk management?
The differences between traditional risk management and enterprise risk management are their strategic applications and performance metrics. Enterprise risk management involves the whole organization while traditional risk management is usually more departmentalized.
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 are the three components of Audit risk?
Inherent Risk, Control Risk and Detection Risk
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
What is Difference between wholesaler and retailer on the basis risk?
what is Difference between wholesaler and retailer on the basis risk?
What is difference between constraint an risk?
A constraint is a limitation that is visible and present. The difference between a constraint and risk is that a risk is problem that is not yet seen, or a potential problem.
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
What are the difference between political risk and country risk?
they are the same
What is the difference between transaction risk and economic risk?
Transaction is bank risk
What is the major difference between non modifiable and modifiable risk factors?
Non modifiable risk factors are things you cannot control such as age, race and family history. Modifiable risk factors on the other hand are things you can control such as weight, physical inactivity and smoking.
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.
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.
