Business risk analysis, Auditing

Assignment Help:

Business Risk Analysis

Business risk can be analyzed between external and internal risks:

External risks:

  • Changing legislation (e.g. minimum wage)
  • Changing interest rates (especially with highly geared companies)
  • Changing exchange rates
  • Public opinion, attitudes, fashions (e.g. environmental factors)
  • Price wars initiated by competitors (e.g. supermarkets)
  • Import competition (e.g. the textile trade)
  • Untried technologies and ideas (e.g. dot.com traders)
  • Natural hazards (e.g. fire or flood or effects of global warming)
  • Bad debts
  • Litigation
  • Environmental matters
  • Inflation
  • Political factors


Internal Risks:

Internal risks can also harm the company. These comprise:

  • Failure to modernize products, processes, labor relations, marketing resulting in loss of competitive edge.
  • Employees (e.g. ineffective recruitment or training policies)
  • Board members (e.g. ineffective corporate governance)
  • The process of dealing with suppliers or customers
  • Excessive reliance on a dominance chief executive (thereby weakening internal control)
  • Inadequate cash flow and the risk of corporate failure
  • Inappropriate gearing (resulting in a lack of financial efficiency)
  • Related parties resting in inappropriate terms of trading
  • Inappropriate acquisitions and poor future prospects
  • Overtrading resulting in cash shortages
  • Excessive reliance on one of a few products, customers, suppliers
  • Internal control weaknesses
  • Computer systems failure and loss of records
  • Fraud

 


Related Discussions:- Business risk analysis

What is the role of audit trainee in managing the discrete a, what is the r...

what is the role of audit trainee in managing the discrete assignment?

Auditing case study, #Fortex Limited, the meat processing firm, was formed ...

#Fortex Limited, the meat processing firm, was formed in 1985 from three smaller companies. In 1993, however, after a few years of spectacular growth, the company collapsed. a) S

Evidence, Method of corrercting evidence?

Method of corrercting evidence?

General verification procedures - audit process, General Verification Proce...

General Verification Procedures - Audit Process 1. Get or prepare a schedule for each and every class of liability. Usually this would indicate the makeup of the liability a

INTANGIBLE ASSET, problems associated with intangible asset audit

problems associated with intangible asset audit

Case study and report, Assessment item 2 Case Study and Report Due date: 19...

Assessment item 2 Case Study and Report Due date: 19-08-2016 Length: 2000 words Task Question 1 (5%) Case: Battersby and Associates Chartered Accountants is a successful mid-t

Proxy, if a proxy is voted as per his judgement other than member prescribe...

if a proxy is voted as per his judgement other than member prescribed to him... what is the action to be taken?

Assertions about account, Assertions about account Assertions about ...

Assertions about account Assertions about account balances at the duration end: a) Existence -assets, equity and liabilities interests exist. b) Obligations and Ri

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd