Risk And Compliance Practice Questions - Governance Institute Of Australia - Risk And Compliance Postgraduate Subject Exam

Risk appetite refers to qualitative risks, while risk tolerance refers to quantitative financial risks. Risk appetite is set by senior management, while risk tolerance is set by external regulatory bodies. Risk appetite is the absolute maximum risk capacity of the firm, while risk tolerance is the target risk level. Risk appetite is the amount and type of risk an organization is willing to pursue or retain, while risk tolerance is the acceptable variation around specific objectives.