Explanation:
Risk monitoring is a continuous process that allows an organization to observe risk exposures in real time. It enables an organization to identify when actual outcomes deviate from expected outcomes and thus breach established risk thresholds. When deviations occur, a robust risk monitoring system will ensure that these are promptly reported to relevant stakeholders,
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Q.2508 SolarTech Inc., a company specializing in the production of solar panels, has recently been acquired by a larger energy corporation, Delta Energy Group. The merger has introduced a greater complexity in the company's operations, thereby increasing its risk profile. Olivia Ross, Delta Energy's Chief Risk Officer, is tasked with aligning SolarTech's existing internal control system with Delta Energy's more robust risk management framework. SolarTech's risk monitoring activities have, until now, primarily focused on financial risk controls, while Delta Energy Group's approach encompasses a broader range of risks. Olivia knows that risk monitoring is crucial in an internal control environment, but she faces resistance from SolarTech's management, who find it difficult to understand the broader role of risk monitoring. In order to convince SolarTech's management of the importance of a comprehensive risk monitoring process, which of the following statements should Olivia emphasize?
A
Risk monitoring primarily helps to identify and manage financial risks.
B
Risk monitoring reduces the need for internal audits.
C
Risk monitoring ensures that deviations from risk thresholds are identified and reported.
D
Risk monitoring eliminates all risk associated with business operations.
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