Internal vs. External Risk Management Assessment Reviewer

D.

Independence is the freedom from conflict of interest and undue influence.

By the mere fact that the external auditors belong to a different entity, their independence level is higher than that of the reviewer inside the entity for which they are performing a review.

Independence is directly linked to objectivity.

Incorrect Answers: A, B, C: These all choices vary subjectively.

The primary objective difference between an internal and an external risk management assessment reviewer lies in their independence.

Internal risk management assessment reviewers are employees of the organization they are reviewing. They work within the organization and are often familiar with its operations, culture, and systems. Their primary objective is to identify, assess, and manage risks within the organization. However, since they are employees of the organization, they may face conflicts of interest or pressure to downplay risks to protect their jobs or the organization's reputation.

On the other hand, external risk management assessment reviewers are independent of the organization they are reviewing. They are hired by the organization to provide an unbiased assessment of the organization's risk management practices. Since they are not employees of the organization, they can provide an objective perspective on the organization's risk management practices. Their primary objective is to identify, assess, and manage risks objectively without any conflicts of interest.

Therefore, the primary objective difference between an internal and an external risk management assessment reviewer is the level of independence they possess. While internal reviewers have a better understanding of the organization's operations, external reviewers can provide a more objective and unbiased assessment of the organization's risk management practices.