There Are Major Decisions That Financial Advisors Have

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There are major decisions that financial advisors have to make in their daily lives. The first decision is investing decision which is capital budgeting decision. Capital budgeting is when a firm invests its funds in wanting fixed and current assets. This is a decision based on fixed assets taken. There are so many factors that affect investing capital budgeting like cash flow, return on investment, risks involved, and investment criteria. Capital budgeting has many important reasons such as long term growth, large amounts of funds involved, risks involved and permanent decisions (Samiksa). The second major decision is deciding source of finance. Financial managers rely on two sources, owner’s fund and borrowed fund. A concern…show more content…
Risk management goes hand in hand with preventing or reducing the risks from theft, fraud and embezzlement. Lastly, financial managers should apply control when it comes to intensifying internal financial controls. This is followed by the senior financial management staff and internal auditors (Ingait). Financial managers face ethical issues every now and again. Some ethical issues financial managers could face is accuracy, transparency, timeliness, and integrity. Accuracy is ensuring that all financial declarations are fairly reflected upon the financial situation of the company. Financial managers should do their best to maintain precise records and books. They also should maintain inside controls and make financial documents with the receiving accounting fundamentals (Basu). Transparency is another issue. This is explaining financial information clearly, especially for those who are new with the company operations. It is a financial manager’s job not to hide, unknown financial information for usual shareholders to comprehend well. Timeliness is also an issue. A company should not keep any news of a major contract loss, assuming it can replace the lost revenue with new contracts. Lastly, integrity is something that is required for every manager of any business. Managers should not have prejudice, bias, and conflicts of interests to provoke their actions. Managers may be tempted to control stock prices by picking
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