When a company is determining its risk assessment:
A) the risks for all companies in the same industry must be the same.
B) the risks will offer hints of where fraud or mistakes may arise.
C) it must report the risks to the SEC.
D) it must report the risks to the PCAOB.

Question

Quizplus · Accepted Answer

Risk assessment helps companies identify potential areas of fraud or errors, which can help them develop better controls or strategies to mitigate those risks. The level and types of risks can vary for different companies in the same industry, so option A is not correct. Companies do not need to report their risk assessments to the SEC or PCAOB, so options C and D are also incorrect.

When a Company Is Determining Its Risk Assessment