Which of the Following Best Illustrates the Primary Focus of a Risk-Based

question 1

Multiple Choice

Which of the following best illustrates the primary focus of a risk-based approach to control self-assessment?

• A) To evaluate controls regarding the computer security of an oil refinery.
• B) To examine the processes involved in exploring, developing, and operating a gold mine.
• C) To assess the likelihood and impact of events associated with operating a finished goods warehouse.
• D) To link a financial institution's business objectives to a work unit responsible for the associated risk.

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Definitions:

Credit

Refers to the ability of a consumer or business to borrow money with the promise to repay it, along with any agreed upon interest, at a later date.

Channel Conflict

This arises when different sales channels (such as online and brick-and-mortar stores) for the same product compete with each other, potentially undermining sales or brand coherence.

Horizontal

Relating to the expansion or operation across the same level or stage in the supply chain, industry, or market, often involving partnerships or mergers.

Vertical

Pertains to a market or industry structure where the production process, from raw materials to final product delivery, is integrated within a single company or closely controlled through a chain of ownership.