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Practice CPA®CPA ISC Practice Exam 4Question 62

Hard1 markMultiple Choice

Area III: SOC EngagementsRisk ManagementArea III

CPA · Question 62 · Area III: SOC Engagements

Which of the following is a 'Risk Response' strategy where the company decides to stop the activity that causes the risk?

Answer options:

A.

Risk Mitigation

B.

Risk Acceptance

C.

Risk Avoidance

D.

Risk Transfer

How to approach this question

Avoid = Don't do it. Mitigate = Fix it. Transfer = Insure it. Accept = Live with it.

Full Answer

C.Risk Avoidance✓ Correct

Risk Avoidance

Risk Avoidance involves eliminating the risk by discontinuing the activity that generates it.

Common mistakes

Confusing Avoidance (stopping) with Mitigation (reducing).

Question 61 All questions Question 63

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