Discuss some of the techniques available to reduce risk exposure.

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: Name two risk management models and how any of them can resolve an operational risk problem.

A: Risk management is that the process of recognising, analysing, and accepting or mitigating…

Q: Explain the difference between unique risk and systematic risk

A: Answer

Q: Explain the types of risk?

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

Q: One of the most popular methods of analysing a technique involves all the following except: A.…

A: Bow -tie risk technique is to find out how much are effective the new control being adapted as…

Q: Define stand-alone risk

A: Stand-alone risk:This refers to the risk linked with a single aspect of a firm or any particular…

Q: Define Risk aversion

A: A risk averse saver is an investor who favors inferior returns with recognized risks somewhat than…

Q: evaluate the main sources of potential financial risk using suitable techniques.  For each risk area…

A: The question is based on the concept of financial risk and different sources of such risk .

Q: Discuss some of the techniques available to reduce risk exposures.

A: Risk exposure is the estimated potential loss from ongoing or upcoming business operations. The…

Q: Explain risk of overreliance and risk of underreliance in brief.

A: Due to material misstatement, an auditor probably render  an unqualified opinion on the state of…

Q: Define . Slope of SML and its relationship to risk aversion

A: Introduction: SML refers to security market line, it is a line indicating the relationship between…

Q: Describe the effects of risk planning on risk evaluation and treatment.

A: Risks Planning plans help a business to determine what their risks are so that one can lessen their…

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: What is the criticism for using SMB and HML as risk factors?

A: The Fama and French Three-Factor Model (or Fama French Model for short) is an asset pricing model…

Q: Describe Detection Risk.

A: Risk: It is the uncertainty about the future events of the company. The adverse chances of choosing…

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: Describe Inherent Risk.

A: Definition:   Audit Planning: Audit planning is the first step in the auditing process. The auditor…

Q: What is the difference between systematic risk and unsystematic risk? Give an example of each.

A: Risk: The possibility that the actual outcome in a situation will differ from the expected outcome…

Q: Explain political risk

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

Q: What three techniques are used to assess stand-alone risk?

A: Stand-alone risk: Stand-alone risk is the risk related with the anticipated project cash flow. The…

Q: Explain the specific relationship between risk and reward and why this relationship must be true.

A: Risk refers to probability for loss of investment value by an investor whereas Reward refers to…

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 should occur when a low level of Detection Risk is acceptable?

A: Detection risk is the risk that procedures performed to reduce audit risk will not detect a material…

Q: Discuss about systematic and unsystematic risk.

A: Risk refers to the movement or fluctuation in the value of an investment. The movement can be…

Q: Calculate the risk neutral probability

A: Risk neutral probability = (er*Δt - d)/(u-d) r is risk free rate. Δt is time period between each…

Q: List and define the different major categories of risk events

A: Risk can be defined as the variability of returns. When the variability of the return is high, in…

Q: Identify the weakness and the risk relating to the above.

A: Answer: The weakness is the shortcoming in any process and risk is the factor that result due to…

Q: Provide a comprehensive definition of risk

A: Risk is described in financial terms as the probability that the actual gains of an event or…

Q: How to minimize or eliminate risk using diversification or other means.

A: Diversification is a process investment in multiple assets with the available amount.

Q: _________ factors are conditions and other variables that in their present, or absence, as the case…

A: Less start with basic understanding. For auditing being made, audit needs to make plan for…

Q: Analyze the potential disadvantages of the LCNRV method

A:

Q: Explain risk aversion

A: Introduction: Risk can be characterized in terms of the uncertainty of future consequences resulting…

Q: Develop plans to mitigate the risk. A detailed strategy for minimizing the impact of the risk could…

A: In the process of undertaking new projects, risk is ever present. A risk is an uncertain event that,…

Q: Why is it important to be able to quantify risk?

A: Risk is the chance that an outcome of an investment's actual gain will differ from an expected…

Q: Using the flowchart provided below, identify control problems, related risks of the problem and…

A: A cost accountant is different than a cost accountant when we talk about performing duties. The…

Q: Define a risk event.

A: Risk Event:  When an event can cause losses to the company's stakeholders and investors due to…

Q: Discuss how diversification can enhance risk reduction?

A: Introduction : Diversification can be understood as the act of distributing resources in such a…

Q: Explain how NPV varies with risks. Show your argument using formulate for cases with different…

A: NPV or Net present value is the difference between the present value of cash inflows and cash…

Q: Provide one example of a calculation of risk and discuss its significance.

A: Risk is a chance that the actual gain or outcome from the investment will differ from the expected…

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.