The internal auditor is considering performing a risk analysis as a basis for determining the areas of the organisation where engagements should be performed. Which one of the following statements is true regarding risk analysis?

Question

Accepted Answer

The extent to which management judgements are required in an area could impact the risk assessment of the internal auditor.

Answer

Risk analysis must be reduced to quantitative terms in order to provide meaningful comparisons across an organisation.

Answer

The highest risk assessment should always be assigned to the area with highest probability of occurrence.

Answer

The highest risk assessment should always be assigned to the area with the largest potential loss.

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The internal auditor is considering performing a risk analysis as a basis for de...

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