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IIA Exam IIA-IAP Topic 4 Question 3 Discussion

Actual exam question for IIA's IIA-IAP exam
Question #: 3
Topic #: 4
[All IIA-IAP Questions]

Management has decided that transactions less than $50 no longer require authorization. Which of the following risk management strategies does this represent?

Show Suggested Answer Hide Answer
Suggested Answer: B

Comprehensive and Detailed Step-by-Step Explanation:

Risk Acceptance: By deciding that transactions below $50 do not require authorization, management is consciously accepting the low-level risk associated with this decision to streamline processes and reduce administrative burdens.


Other Options:

Option A: Risk avoidance would involve eliminating the activity altogether, which is not the case here.

Option C: Risk reduction would involve implementing controls to mitigate the risk, not eliminating authorization requirements.

Thus, the correct answer is B. Accept.

by Stephania at Jan 25, 2025, 04:47 PM

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Dick
2 months ago
This is a tricky one. I can see both the risk acceptance and risk reduction angles. But I'm gonna go with B. Gotta love those risk management strategies, am I right?
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Paola
2 months ago
Avoid? Really? That's just ridiculous. This is clearly a move towards risk acceptance, not avoidance. What are they teaching these days?
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Roslyn
2 months ago
I think management is trying to streamline the process by accepting smaller transactions without authorization.
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Jeff
2 months ago
Yeah, it doesn't make sense to avoid such small transactions.
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Luis
2 months ago
I agree, it seems like they are moving towards risk acceptance.
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Anastacia
2 months ago
I agree, it seems like they are accepting the risk rather than avoiding it.
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Taryn
3 months ago
Hmm, I'm not so sure. This could also be considered a risk reduction strategy, as they're setting a threshold to minimize the potential impact of unauthorized transactions.
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Glennis
1 months ago
User 4: I agree, setting a threshold for authorization can help minimize risks.
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Refugia
1 months ago
User 3: It could also be seen as a way to avoid unnecessary authorization processes.
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Mel
2 months ago
User 2: Maybe it's a way to reduce the impact of unauthorized transactions.
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Theodora
2 months ago
User 1: I think it's a risk reduction strategy.
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Vallie
3 months ago
I think this is a classic case of risk acceptance. Management is willing to accept the risk of smaller transactions without authorization to save time and resources.
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Tony
2 months ago
Either way, it's important for management to carefully consider the potential consequences of this decision.
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Juliann
2 months ago
I see your point, it could be a combination of both acceptance and reduction.
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Vanna
2 months ago
But wouldn't it also be considered a risk reduction strategy since they are streamlining the process?
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Cathern
2 months ago
I agree, it seems like management is accepting the risk of smaller transactions.
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Izetta
3 months ago
Yeah, it's definitely an 'Accept' risk management strategy.
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Paris
4 months ago
I agree. It seems like they are accepting the risk.
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Tommy
4 months ago
I think it's a risky move.
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Dustin
4 months ago
I can't believe management is doing this.
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