Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 197

Which of the following is most likely to be judged as a significant residual risk that would exceed the organization's acceptable risk level?

Answer options

• A. Any risk involving organizational expansion into a new geographical area with an unstable political environment.
• B. Any risk involving investments into bitcoin and suspicious derivatives.
• C. Any risk that can cause material or financial loss.
• D. Any risk that could cause injuries or pollute the environment.

Correct answer: D

Explanation

Option D is correct because risks that could lead to injuries or environmental pollution have significant implications and are often non-negotiable in terms of acceptable risk levels. Options A and B, while concerning, do not have the same immediate life or safety impact, and option C is too broad as it does not specifically address the severity of consequences.