Exam IIA-CIA-Part1 topic 6 question 253 discussion

Actual exam question from IIA's IIA-CIA-Part1

Question #: 253
Topic #: 6

An organization’s board has approved an expansion plan into a new market. The board acknowledged that if the expansion is not successful, the organization would encounter large monetary losses consisting of legal fees, research and development costs, rent expenses, and labor fees. Which of the following has the board approved?

A. The risk response.
B. The risk tolerance.
C. The residual risk.
D. The inherent risk.

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Suggested Answer: B 🗳️

by f30b972 at Aug. 16, 2024, 6:11 a.m.

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Kozy

4 weeks ago

Selected Answer: A

The risk response refers to management's or the board's chosen action to address a known risk, which could include accepting, avoiding, mitigating, or transferring it. In this case, the board has approved the expansion plan despite acknowledging significant potential losses, which implies they have accepted the risk—this is a form of risk response.

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f30b972

11 months, 3 weeks ago

Why not A? The response is pursuit. Tolerance would have been something determined prior to this.

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