According to HA guidance, which of the following would best support the internal auditor ' s conclusion that the organization ' s risk management processes are effective?
A.
The organization has identified all applicable operational and financial risks.
B.
The organization has documented its strategic and business objectives.
C.
The organization has selected risk responses aligned with its risk appetite.
D.
The organization has documented risk information pertinent to its business.
According to the guidance from The IIA (International Professional Practices Framework - IPPF), the most robust support for concluding that an organization’s risk management processes are effective is the alignment of selected risk responses with the organization’s risk appetite. This indicates that the organization not only understands its risks but also manages them in a manner consistent with its capacity and willingness to accept risk. It reflects a mature risk management process where risks are identified, assessed, and managed in alignment with strategic objectives and risk appetite, ensuring that the organization is not taking on more risk than it can handle or than is acceptable to its stakeholders.
IIA Practice Guide on Assessing the Adequacy of Risk Management Processes.
COSO Enterprise Risk Management Framework.
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