Using risk assessment and control, which of following risks would be most likely to require creation of an?

internal control?


Probabilty of


Occurrence


A. Low


B. Low


C. High


D. High


Amount of potential Loss


A. Low


B. High


C. Low


D. HighUsing risk assessment and control, which of following risks would be most likely to require creation of an?
An internal control would be required for:





when the probability of an occurrence is high


or when the amount of potential loss is high.





How ever depending on what the result of an occurrence is controls may be needed even when the probability of occurrence is low.





For a high probability of occurrence but low potential loss, C, controls may also be needed, a minor cut every week may not be acceptable to the workforce or a minor leak to the local river every month may not be acceptable to the locals officials!





From above: B, C and D would need controls.