Residual risk acceptance is a governance process where accountable executives explicitly approve continuing operations despite remaining risk exposure after mitigation efforts. This decision recognizes that eliminating all risk is impractical or cost-prohibitive, requiring documented rationale, authority levels, and periodic review. For example, a CFO might accept residual fraud risk below a monetary threshold after implementing detective controls and insurance. Acceptance should be time-bound, monitored against tolerance thresholds, and reassessed when conditions change. Undocumented acceptance creates accountability gaps and potential liability, while formal processes ensure informed decision-making and regulatory compliance.