Causes of Information risk 1. Remoteness of lnformation 2. Biases and motives of the provider 3. Voluminous data Reducing Information risk For larger businesses, it is usually practical to incur costs to reduce information risk, There are three main ways to do this 1. User Verifies Information (IMPRACTICAL 2. User Shares Information Risk with Management sue management if they lie- LAWSUIT l3. Audited Financial Statements are Provide Arens, Loebbecke; Auditing, 8/ o2000 br Prentice Hall. IncArens, Loebbecke; Auditing, 8/E © 2000 by Prentice Hall, Inc. Causes of Information Risk 1. Remoteness of Information 2. Biases and Motives of the Provider 3. Voluminous Data Reducing Information Risk For larger businesses, it is usually practical to incur costs to reduce information risk. There are three main ways to do this. 1. User Verifies Information (IMPRACTICAL) 2. User Shares Information Risk with Management - sue management if they lie - LAWSUIT 3. Audited Financial Statements are Provided