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Internal Auditing
Chapter 4
| Question | Answer |
|---|---|
| Risk | The possibility that an event will occur and adversely affect the achievemnt of objectives. |
| Opportunity | The possibility that an event will occur and positively affect the achievement of objectives. |
| Business Risk | Risks that are specifically associated with organizations conducting a form of business: uncertainties regarding threats to the achievement of business objectives. |
| Enterprise Risk Mangement | The process conducted by management to understand and deal with uncertainties (that is, risks and opportunities)that could affect the organization's ability to achieve its objectives. |
| Objectives | What an entity desires to achieve. When referring to what an organization wants to achieve, these are called business objectives, and may be classified as strategic,operations, reporting, and compliance. |
| Risk Management Philosophy | Set of shared beliefs and attitudes characterizing how the organization consiers risk in everything it does. |
| Risk Appetite | The amount of risk, on a broad level, an organization is willing to accept in pursuit of its business objectives. |
| Risk Tolerance | The acceptable levels of risk size and variation relative to the achievement of objectives, which must align with the organization's risk appetite. |
| Inherent Risk | The combination of internal and external risk factors in their pure, uncontrolled state, or, the gross risk that exists, assuming there are no internal controls in place. |
| Residual Risk | The portion of inherent risk that remains after management executes its risk responses(sometimes referred to as net risk). |
| Control | Any action taken by management, the board, and other parties to manage risk and increase the likelihood that established objectives and goals will be achieved. |
Created by:
edhlions
on 2011-02-03