Which of the following risks is represented in the risk appetite of an organization? 

Answer options:

A. Control
B. Inherent
C. Residual
D. Audit

C

Residual risk is unmanaged, i.e., inherent risk which remains uncontrolled. This is key to the organization`s risk appetite and is the amount of residual risk that a business is living with that affects its viability. Hence, inherent risk is incorrect. Control risk, the potential for controls to fail, and audit risk, which relates only to audit`s approach to their work, are not relevant in this context.