What is Inherent Risk? - Definition & Assessment


Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

A company has a construction business in USA. If a financial crisis happens in the country, its inherent risk will _____.

Create Your Account To Take This Quiz

As a member, you'll also get unlimited access to over 79,000 lessons in math, English, science, history, and more. Plus, get practice tests, quizzes, and personalized coaching to help you succeed.

Try it risk-free
Try it risk-free for 30 days. Cancel anytime
Already registered? Log in here for access

1. In a discussion of inherernt risk, which of the following statements is TRUE?

2. Assume two companies, A and B. A is a retail bank and B is a trading company that deals with risky and complex securities, commodities and derivatives. The inherent risk in B will be _____ than the inherent risk in A.

Create your account to access this entire worksheet
A Premium account gives you access to all lesson, practice exams, quizzes & worksheets
Access to all video lessons
Quizzes, practice exams & worksheets
Certificate of Completion
Access to instructors
Create an account to get started Create Account

About This Quiz & Worksheet

When considering a retail bank and a trading company, which one has greater inherent risk? This quiz and worksheet will test your ability to accurately answer this question and others related to inherent risk.

Quiz & Worksheet Goals

You'll be tested on the following:

  • A company's inherent risk in a financial crisis
  • A true statement about inherent risk
  • Comparing the inherent risk of a retail bank and trading company
  • Examples of transactions that are non-routine

Skills Practiced

  • Knowledge application - use your knowledge to answer questions about inherent risk
  • Interpreting information - verify that you can read information about non-routine transactions and interpret it correctly
  • Information recall - access the knowledge you've gained regarding a true statement about inherent risk

Additional Learning

Be sure to check out the related lesson titled What is Inherent Risk? - Definition & Assessment. You'll learn more about this topic, including:

  • The assessment of risk as a subjective process
  • External factors that affect risk
  • How not having an audit history impacts risk