Exposure is the absence or weakness of a control which increases the firm's risk of financial loss.Select one:TrueFalse

Final Answer: True

Explanation: Exposure, in the context of risk management and finance, refers to the potential for financial loss that arises from a weakness or absence of controls within an organization or a system. When a firm lacks effective controls—such as internal checks, risk assessment protocols, or compliance measures—it becomes more vulnerable to various risks, including fraud, operational failures, market volatility, and other unforeseen events. This lack of control can lead to significant financial repercussions, highlighting the importance of establishing robust risk management practices to mitigate possible exposures. Therefore, the statement that "exposure is the absence or weakness of a control which increases the firm's risk of financial loss" reflects the fundamental concept of risk exposure in financial management.