Which of the following describes the internal control component risk assessment?
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.
D) Risk assessment is designed to ensure that the business's goals are achieved.

Question

Quizplus · Accepted Answer

Risk assessment is the process of identifying and analyzing potential risks that could prevent a company from achieving its objectives. It is a critical internal control component as it helps a company to identify areas of vulnerability and implement controls to mitigate those risks.

Option A is incorrect because it describes the roles of internal and external auditors, which are separate from the risk assessment process.

Option B is incorrect as it pertains to the overall culture and values of a company, rather than the internal control component of risk assessment.

Option D is incorrect because the internal control component of risk assessment is focused on identifying and addressing potential risks, not on achieving business goals.

Which of the Following Describes the Internal Control Component Risk