When estimating the impact of an inherent risk, internal auditors should consider both financial and nonfinancial factors related to the risk. This approach helps in understanding the full scope of the risk's potential impact on the organization, including how it might affect financial performance, operational efficiency, regulatory compliance, and other aspects of the organization’s objectives.
The other options are related but not directly about estimating the impact of inherent risk:
A. The probability and frequency of occurrence focus more on the likelihood of the risk occurring rather than its impact.
C. The number of risks identified on the heat map helps in understanding the overall risk landscape but not the specific impact of each risk.
D. The residual risk following implementation of appropriate controls relates to the risk remaining after controls are applied, not the inherent risk itself.
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emtofid
8 months, 1 week ago