What does risk appetite mean on the CPA exam?
Risk appetite. How much risk an organization is willing to accept in pursuit of its objectives, set by the board. It is a stated boundary, not a measurement.
Defined against COSO ERM 2017.
Which CPA exam sections use risk appetite?
Risk appetite appears in the ISC section of the CPA exam.
Related terms
- control objectives: What a set of controls is supposed to achieve, stated so that it can be tested.
- carve-out method: Excludes a subservice organization's control objectives and controls from both the description and the scope of the service auditor's report.