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My Introspective

by Laurus Nobilis
My BrainCast

Strategic Management

Risk Universe: Finance

 

Risk Register in Risk Management

 

 

 

 

 

What is the role of risk register in preparation for potential risks? How the risk weight and impact should be calculated?

 

Posted: Mar 2012


 

 

 

 

 

 

 

 

 

 

RISK UNIVERSE ASSET CATEGORY: FINANCE

1. Currency/ Foreign Exchange/ Interest Rate volatility: Volatility in foreign exchange/ interest rates, inflation or other macro-economic conditions exposes the organisation to economic and accounting losses (e.g. due to inability appropriately to hedge).

2. Financial controls: Inadequacy of financial controls leads to possible loss of assets, audit non-compliance, breach of regulations, fines and loss of brand and trademark value.

3. Financial misstatement: Accidental or deliberate financial misstatement leads to breach of regulations, fines and loss of brand and trademark value.

 

Risk Universe - Finance

 

4. Forecasting/budgeting/ measurement/ cash flow management: Inaccurate forecasting/ budgeting/ production planning/ performance measurement prevents achievement of business objectives. Inability to fund the operational or financial obligations of the business.

What is the role of risk register in preparation for potential risks? How the risk weight and impact should be calculated?



5. Commodity pricing: Exposure to fluctuations in prices of commodity-based materials or products (e.g., sugar, aluminium) could result in reduced earnings and a shortfall from budgeted or projected earnings due to lower-than-expected selling prices or higher-than-expected input costs.

6. Counterparty Default: The organisation may be exposed to a counterparty that is unable to fulfill its obligations.

7. Capital Availability: The organisation’s credit rating or ability to attract investors may be insufficient to obtain capital at an economic rate.

8. Inventory theft/ fraud: Theft of inventory/ cash by employees/third parties prevents achievement of business plan objectives

9. Valuation: Inaccurate valuation of assets prevents achievement of business goals

 

Related Reading:

Risk Analysis
Risk Register as a Tool of Risk Management
Risk Universe: People Assets
Risk Universe: Product and Marketing Assets
Risk Universe: Infrastructure Assets
Risk Universe: Information Assets
Risk Universe: Finance Assets

 

 

 

 

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