What are the basic risk faced by financiwl intermediaries?

Q: How can the use of passwords actually circumvent security? What actions can be taken to minimize…

A: A password is a combination of letters (eg. a, b, E, etc.), numbers (eg. 1,4,7, etc.) or symbols…

Q: What determines the acceptable level of Detection Risk?

A: Detection Risk:   It is a chance that an auditor will fail to identify any material misstatement…

Q: Explain the types of risk?

A: Introduction: There is a risk involved in any company decision, and in personal life decisions. In…

Q: What is management fraud?

A: Fraud:   It is an intentional misappropriation of the assets or the financial records of an…

Q: How does a lockbox system operates and why a firm might consider implementing such a system?

A: A lockbox system is critical for cash handling. It assists in the collecting of cash from various…

Q: what is control risk

A:

Q: Should managers estimate intrinsic values or leave that to outside security analysts?Explain.

A: Intrinsic value of a stock is perceived value of a stock using analysis of book values of the…

Q: What recommendations will you give to prevent fraud?

A: Fraud is an unethical activity performed against an organization's policy in order to take personal…

Q: Explain Prepayment Patterns and Security Prices?

A: The lending process is subjected o interest rates changes which may trigger prepayment of the…

Q: What is takaful and how it can be used as a risk mitigation tool and write down the names of types…

A: Takaful may be a style of monotheism insurance whereby members contribute cash into a pool system to…

Q: how does communication aid in assessing inherent risk, control risk and detection risk

A: Factors of Communication aid in Assessing Inherent Risk, Control Risk and detection Risk There are…

Q: definition of political risk and how mitigate it?

A: Political risk are risk arising due to political parties of countries with change in government…

Q: Explain types of Security Issuers and Guarantors?

A: Types of security issuers are described as follows: Banks– Banks generally issue securities to meet…

Q: How can intranet expansion increase risk to an organization?

A: Organization: Organization refers to the group of organized people with a particular purpose of…

Q: What are threats and safeguards to independence?

A: American Institute of Certified Public Accountants (AICPA):   It is an association of certified…

Q: What is the risk of assessing Control Risk too low?

A: Definition:   Tests of controls: Tests of controls form the part of audit procedures to be…

Q: How are the characteristics of an organized security exchange differ from an over the counter…

A: Financial markets contain any marketplace where securities such as the stock market, bond market,…

Q: How do you design a fraud prevention programme?

A: A fraud is the intention of a person to deceive(mostly financially) another person or an…

Q: Explain political risk

A: Political risks are important to be considered because they have an impact on the profitability…

Q: What are the rules of safe harbor?

A: Tax: Tax refers to a compulsory payment or a contribution to the state revenue, levied by the…

Q: What controls would you implement to

A: Internal Control system: Internal control system can be defined as the set of policies and…

Q: What do "threat," "vulnerability," and "risk" really mean?

A: Threat : A declaration of purpose to cause someone pain, harm, damage, or other hostile action as…

Q: What are the risks from subversive threats?

A: Taking illegal access over a firm internal system network by doing activity of surpassing the…

Q: What are the differences between bottom-up and top-down approaches to security valuation? What are…

A: A top-down method to security evaluation starts with an examination of the worldwide and national…

Q: What principles are essential to an effective risk management program?

A: All types of organizations face different types of risks which may affect their chances of success.…

Q: What creates rogue traders?

A: A rogue trader is a trader who acts recklessly and without regard for others, usually to the…

Q: What is collusion?

A: Auditing: Auditing refers to the process of verifying the correctness and fair presentation of…

Q: What are the limitations on Control Activities?

A: Internal control: Internal control is a process which ensures continuous reliability of…

Q: State difference between sureties and security?

A: In development contracts, if a worker for hire neglects to play out the works, the business would…

Q: Why is identification of risks, through a listing of assets and their vulnerabilities, so important…

A: Answer: One can never underestimate the importance of risk management that he is engaged in a…

Q: What is shared risk? Use an example to explain the shared risk happen and who will involved?

A: Risk means the uncertainty of happening of an event. When the risk is higher than the uncertainty of…

Q: Why is sanctions compliance important?

A: Financial institutions are the institutions or organizations which act as the intermediaries of the…

Q: What is the relationship between Evidence and Detection Risk?

A: Detection risk is the risk that an auditor will not find a material misstatement in a client's…

Q: Why is identification of risks, by listing assets and their vulnerabilities, so important to the…

A: Risk management: Risk management is the process of recognizing risk, assessing its relative scale…

Q: Outline the anti-avoidance provisions as they relate to dealings in security

A: Anti avoidance provisions means a cluster of statutory provisions designed to stop certain…

Q: What does Security Market Line Capture?

A: Security market line (SML) is a straight line sloping upward depicting an expected rate of return as…

Q: What is the risk of assessing Control Risk too high?

A: Control risk refers to the probability of financial statements that were considered wrongly stated…

Q: Are you able to differentiate between risks that are inherent and those that can be controlled?

A: Inherent risk- A material mis-statement that occurs due to error or due to omission  in the…

Q: What are some limitations of internal control?

A: The below-mentioned points indicate that every system has its frailties and despite such…

Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.