Risk Assessment Is Best Described By

question 62

Multiple Choice

Risk assessment is best described by:

• A)Internal and external events affecting achievement of an entity's objectives must be identified, distinguishing between risks and opportunities.
• B)Management selects whether to avoid, accept, reduce, or share risk - developing a set of actions to align risks with the entity's risk tolerances and risk appetite.
• C)The entirety of enterprise risk management is monitored and modifications made as necessary.
• D)The likelihood and impact of risks are analyzed, as a basis for determining how they should be managed.

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Definitions:

Taxable Income

The amount of income that is subject to income tax after deductions and exemptions.

Average Tax Rate

A metric that reflects the ratio of total taxes paid to total income, showing the proportion of income that goes towards tax payments.

Tax Liability

The total amount of tax owed to a taxing authority by an individual, organization, or other entity.

Income

Consistent financial returns from professional activities or investments.