CFE – Fraud Prevention and Deterrence — Question 55

Effective risk management involves balancing which of the following?

Answer options

• A. The organization's risk appetite and its ability to meet its objectives
• B. The organization's regulatory requirements and its available resources
• C. The organization's financial reporting model and its risk tolerance
• D. The organization's internal controls and its financial goals

Correct answer: C

Explanation

The correct answer, C, is right because it highlights the need to align financial reporting with risk tolerance to ensure accurate and responsible financial management. The other options do not directly address the integration of financial reporting and risk management, making them less relevant in the context of effective risk management.