Risk. An Overview 2. Who Must Comply with the Red Flags Rule 3. Consumer preferences, demand, and sales volumes. Of the following, which one(s) fall(s) under business risk? This can be done either before the business begins operations or after it experiences a setback. Economic risks. Business risk is any exposure a company or organization has to factor(s) that may lower its profits or cause it to go bankrupt. Competitive risk is the advantage that competitors may gain over you by achieving the target.A decrease in market share is also a kind of competitive risk because that means other competitors are gaining the market share. False 6.) Which of the following would not help in assessing inherent risk during the planning phase? Competitive Risk. Business risk can be influenced by multi-faceted factors. Unsystematic risk is unique to a specific company or industry and can be reduced through diversification. Large changes in customer demand Unstable selling price Uncertainty in input costs None of the given options Question No :2 In ____________ market stocks and bonds are traded. Which of the following answers does not come from the suggested classification system in TOGAF? The following actions raise the political risk of doing business in China except: A. We have step-by-step … D) determines the nature, timing, and extent of further audit procedures. Which of the following statements is not true? Caused by human weakness and the unpredictability of employees and or customers. In a financial statement audit, inherent risk is evaluated to help an auditor asses which of the, B) the susceptibility of a financial statement assertion to a material misstatement assuming there are no related controls. Risk assessment procedures include inquiries of management and others by the auditor. When a company experiences a high degree of business risk, it may impair its ability to provide investors and stakeholders with adequate returns. However, there are many U.S. states that do not have this type of distribution system; compliance risk arises when a brand fails to understand the individual requirements of the state that it is operating within. The risk of material misstatement refers to. B. Which one of the following is a method companies can use to manage political risk by incorporating risk into business strategies, a ploy known as adaptation? Financial distress occurs when income flows fail to meet the required spending outflows owed to outstanding obligations or needs. But it will be there as long as you run a business or want to operate and expand. But it will be there as long as you run a business or want to operate and expand. Compliance risk primarily arises in industries and sectors that are highly regulated. The risk that your competition will gain advantages over you that prevent you from reaching your goals. Strategic risk arises when a business does not operate according to its business model or plan. The second form of business risk is referred to as compliance risk. As part of these procedures, the auditor should talk to. 1. FAQs 4. However, sometimes the cause of risk is external to a company. A medium-sized healthcare IT business decides to implement a risk management strategy. Business risk cannot be entirely avoided because it is unpredictable. However, there are many strategies that businesses employ to cut back the impact of all types of business risk, including strategic, compliance, operational, and reputational risk. Sometimes it is a company's top leadership or management that creates situations where a business may be exposed to a greater degree of risk. 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