Final answer:
The group engagement team's risk assessment of a significant component involves evaluating both inherent and control risks to capture a complete picture of potential vulnerabilities.
Step-by-step explanation:
When the group engagement team conducts a risk assessment of a component that is significant in nature, it involves evaluating both inherent and control risks. Inherent risks are the underlying risks that exist in the environment before considering the controls in place. Control risks are those that stem from the potential failure of the control measures which are already implemented. This assessment is not limited to external economic factors only or group-wide risks only; it encompasses a broad evaluation that includes routine transactions as part of understanding the full scope of inherent and control risks.