An IS auditor is planning an audit of an organization's risk management practices. Which of the following would provide the MOST useful information about risk appetite?
An IS auditor is planning an audit of an organization's risk management practices. Which of the following would provide the MOST useful information about risk appetite?
To understand an organization's risk appetite, the most reliable source of information would be its risk policies. These policies are developed to clearly articulate the levels of risk the organization is willing to assume in pursuit of its objectives. They provide a comprehensive framework and guidelines for risk-taking, addressing various aspects of risk tolerance and management. While prior audit reports, management assertions, and risk assessments provide useful information, none of these are as directly focused on defining risk appetite as the risk policies.
Risk policies are specifically crafted to define an organization's risk appetite and tolerance levels. They outline the acceptable level of risk the organization is willing to take to achieve its objectives. Reviewing risk policies provides clear insight into the organization's stance on risk and helps establish guidelines for risk-taking activities across different departments and functions. Therefore, examining risk policies would offer the most useful information about risk appetite during the audit process.