Which of the following should be the PRIMARY basis for determining risk appetite?
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A. B. C. D.A.
The primary basis for determining risk appetite should be based on the organization's objectives. Risk appetite is the level of risk that an organization is willing to accept or tolerate in pursuit of its objectives. It reflects the organization's willingness to take risks in order to achieve its goals. Therefore, the risk appetite must align with the organizational objectives.
Senior management input is also important in determining the risk appetite of an organization. Senior management is responsible for setting the overall direction of the organization, and their input can provide valuable insights into the level of risk that the organization is willing to accept.
Industry benchmarks can provide useful information on the level of risk that is typical for organizations in a particular industry. However, it should be noted that industry benchmarks do not take into account the specific risk appetite of an individual organization and should not be relied on solely for determining risk appetite.
Independent audit results can provide valuable information on the effectiveness of the organization's risk management processes. However, it should be noted that independent audit results do not provide information on the organization's risk appetite.
In conclusion, while all of the options provided can be useful in determining risk appetite, the primary basis for determining risk appetite should be based on the organization's objectives.