Which of the following describes the risk assessment component of internal control?
A) Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate.
B) Risk assessment is the "tone at the top" of the business.
C) A company must identify its risks and take necessary steps to minimize them.
D) Risk assessment is designed to ensure that the business's goals are achieved.

Question

Quizplus · Accepted Answer

The risk assessment component of internal control involves identifying and assessing risks faced by the organization and taking necessary steps to minimize them. This includes determining the likelihood and potential impact of various risks, and implementing measures to mitigate or eliminate them. Option A describes the role of auditors in monitoring controls, while option B describes the importance of leadership in setting the tone for the organization. Option D refers to the overall purpose of internal control in achieving business objectives, but does not specifically describe the risk assessment component.

Which of the Following Describes the Risk Assessment Component of Internal