Which of the following processes is used to determine the quantitative or qualitative value of risk associated with the concrete condition and a recognized threat?
Correct Answer for the Question – Which of the following processes is used to determine the quantitative or qualitative value of risk associated with the concrete condition and a recognized threat? is given below
Which of the following processes is used to determine the quantitative or qualitative value of risk associated with the concrete condition and a recognized threat?Answer option D is correct.The Risk assessment process is used to determine the quantitative or qualitative value of risk associated with the concrete condition and a recognized threat.Risk assessment is a process on assessing risk while performing auditing that allows the auditor to determine the scope of the audit and assess the level of audit risk and error risk (the risk of errors occurring in the area being audited). Additionally, risk assessment will aid in planning decisions, such as:The nature, extent, and timing of audit procedures.The areas or business functions to be audited.The amount of time and resources to be allocated to an audit.Answer option A is incorrect. Identify risks is the process of determining which risks may affect the project. It also documents risks’ characteristics. It is part of the project risk management knowledge area. As new risks may evolve or become known as the project progresses through its life cycle, identify risks is an iterative process. The process should involve the project team so that they can develop and maintain a sense of ownership and responsibility for the risks and associated risk response actions. Risk register is the only output of this process.Answer option B is incorrect. Risk modeling describes the utilization of formal econometric techniques to evaluate the aggregate risk in a financial portfolio. It refers to the subtasks within the broader area of financial modeling.Risk modeling uses various techniques consisting of market risk, Value at Risk (VaR), Historical Simulation (HS), and Extreme Value Theory (EVT) so as to analyze a portfolio and make forecasts of the likely losses that would be incurred for a variety of risks. These risks are categorized into credit risk, liquidity risk, interest rate risk, and operational risk.Answer option C is incorrect. Risk limitation is the method used to restrict the risk by implementing controls, which decreases the unfavorable impact of a threat that would exercise a threat. When a risk assessment is completed then the risk limitation process must be worked out. Through establishing risk levels, identifying threats, and selecting reasonable and prudent controls, management is limiting risk exposure.Reference: “Project Management Body of Knowledge (PMBOK Guide), Fourth edition”Chapter: Quality and Risk ManagementObjective: Risk Identification and Assessment
Identify risk
Risk modeling
Risk limitation
Risk assessment
Correct Answer
The Correct Answer for this Question is
Risk assessment
Explanation
The Question – Which of the following processes is used to determine the quantitative or qualitative value of risk associated with the concrete condition and a recognized threat? has been answered correctly and answers for the question is Risk assessment
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