ACCA Strategic Business Leader (SBL) Practice Exam

Which process assesses potential risks in an organization?

1. Control environment

2. Risk assessment process

3. Information system communication

4. Implementation review

The correct answer is: Risk assessment process

The risk assessment process is specifically designed to identify and evaluate potential risks that could impact an organization. This is a critical component of risk management, allowing organizations to systematically identify risks, analyze their potential impact, and prioritize them based on their significance. By conducting this process, organizations can make informed decisions about how to mitigate or manage those risks effectively. The control environment refers to the overall attitude and culture of an organization regarding risk management and internal controls, but it does not assess risks directly. Information system communication involves the flow of relevant information necessary for decision-making and may support risk assessment but is not the process that specifically assesses risks. An implementation review typically evaluates whether a strategy or plan has been executed effectively, rather than identifying or assessing risks beforehand. Hence, the risk assessment process is the correct choice as it directly pertains to evaluating risks and determining the necessary steps to address them proactively.