OPERATIONS AUDIT: DISCUSSION ASSIGNMENT WEEK 3

WHAT IS RISK?

The word ‘risk’ derives from the early Italian risicare, which means ‘to dare’. In this sense, risk is a choice rather than a fate. The actions we dare to take, which depend on how free we are to make choices, are what the story of risk is all about. And that story helps define what it means to be a human being (Pickett, 2002).

RISK ASSESSMENT

Is the process of identifying, measuring, and analyzing risks relevant to a program or process. This assessment is systematic, iterative, and subject to both quantitative and qualitative inputs and factors. Furthermore, it is also dependent on the timeframe of the review (Murdock, 2015).

DISCUSSION ASSIGNMENT

Describe the concept of risk and suggest ways that this concept can be applied to business practice.

Please provide your answers with a minimum of 200 words and a maximum of 500 words through this page link. Please observe proper citation and use APA format 7th edition.

FOLLOW THESE INSTRUCTIONS:

(1) INDICATE YOUR FULL NAME AND STUDENT NUMBER at the end of your post

(2) IF YOUR POSTS IS MORE THAN 300 WORDS, PLEASE SPLIT IT INTO TWO OR THREE POSTS

(3) REPLY TO AT LEAST THREE of your classmates' perspectives to RISK ASSESSMENT and RISK MANAGEMENT. Rate their comment if you agree with their perspective or not.

Cut-off date in posting to this discussion forum is until November 06, 2021 11:55PM Philippine Time.

NOTE: Do not create a new question in the eRTU Discussion Forum. Please answer directly on the discussion link here as posted by Prof. Markie Grabillo.

Comments

UnknownOctober 28, 2021 at 10:42 PM
The prospect of an occurrence having a negative impact on people, systems, or assets is known as risk. The combined consequences of hazards, the assets or persons exposed to hazard, and the vulnerability of those exposed elements are often represented as a function of risk (UNDRR, n.d.). At the end of the day, risk is the product of our choices. We make choices about the vulnerabilities to which we are likely to disclose ourselves, where to improve infrastructure, industries, dams, and dykes, and how much to expend in disease surveillance, as well as how our communities manage and care for vulnerable individuals and resources. The process of discovering, evaluating, and mitigating threats to an organization's capital and profitability is known as risk management. Financial instabilities, legal liabilities, technology challenges, strategic planning failures, accidents, and natural calamities are all potential causes of risk. A comprehensive risk management program allows a company to analyze all of the hazards that it confronts. Risk management also looks at the link between risks and the potential for them to have a ripple effect on an organization’s objectives (Tucci, 2021).

The concept of risk may be applied to the operations of business by identifying and assessing the primary risks that the company is facing so that accurate and reliable measures will be applied to counter these risks. Risks are also measured to know the impact of certain risks, if it transpires, and the likelihood of the risks, if it actually occurs. It is also recommended to review their risk procedures and effectively manage the interconnectedness of threats across the company that is why more firms are adopting a risk maturity framework.

References:

Tucci, L. (2021). What is risk management and why is it important?. https://searchcompliance.techtarget.com/definition/risk-management?amp=1

UNDRR. (n.d.). Understanding Risk. https://www.undrr.org/building-risk-knowledge/understanding-risk

LEYCO, PATRICIA DENISE P. (2019-101438)
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Angelika D. FranciaOctober 28, 2021 at 11:12 PM
According to Kenton (2020), risk is a company's or organization's exposure to events that will decrease profitability or cause it to fail. Anything that compromises the capacity of the company to achieve its financial objectives is considered a risk. Risk in business can occur in one of four ways: strategic risk, compliance risk, operational risk, and reputational risk. Strategic risk is when a business does not perform in accordance with its business model. As a result of this risk, the business strategy will become less effective over time and it may fail to meet its objectives. Compliance risk is the risk of noncompliance with business’ regulations and laws that may lead to financial losses and poor social performance. Operational risk occurs from within the business, when company's daily business activities fail to operate. Lastly, reputational risk is a risk that affects the company's reputation, either by an event that was the result of a prior business risk or by other incident. It carries the risk of losing customers and lowering brand loyalty.
Operating a business usually involves assessing a lot of risks. Some of these possible risks have the ability to ruin the business, while others might create substantial damage that is time-consuming and costly to remediate. According to the website of Brokerlink (2013), by knowing the concept of risk, businesses may identify potential risks, problems, or disasters before they occur. This enables business owners to implement measures to prevent the risk or mitigate its impact.

References:
Brokerlink (2013). Effective Risk Management Plan: Why Is It Important for Your Business? https://www.brokerlink.ca/blog/risk-management
Davis, M. (2021). Identifying and Managing Business Risks. https://www.investopedia.com/articles/financial-theory/09/risk-management-business.asp

- FRANCIA, ANGELIKA D. (2019-101440)
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Ericka MañalacOctober 29, 2021 at 1:53 AM
Mañalac, Ericka (2015-100842)

In general, we are always facing a risk. In every decision we make, there’s a probability that we may not achieve what we have planned or something bad may happen. Risks may arise from the combination of the effects of the hazard, the people or assets exposed to hazard, and the vulnerability of these exposed elements (Understanding Risk, n.d.). Hazard is the potential cause of something that may lead to injury or damage of the people or asset exposed if it is vulnerable enough to be affected.

For instance, in this COVID-19 pandemic, if those people working in the hospital are already tired from the long working hours and couldn’t get a proper rest, they are more susceptible in infection of the disease because they are exposed to the virus. In a business, if there is a failure in a supplier it will greatly affect the customer, especially if the customer does not have any other alternative supplier, it may lead to a financial loss.

Uncertainty is inherent in a business practice and it may become a potential source of risk. Even though everything was planned, we are not absolutely sure if those plans will be done accordingly. That is why control activities must be done to be more likely to achieve the organization’s objectives, to monitor or to ensure that the management directives to minimize the risks are properly carried out and adapted. Lack or absence of control effectiveness can expose the business entity in more types of risks. The management must also identify the risks so it will be measured and analyzed to apply the appropriate controls needed.

Murdock, H. (2016). Operational Auditing: Principles and Techniques for a Changing World (Internal Audit and IT Audit) (1st ed.). Auerbach Publications.

Understanding Risk. (n.d.). UNDRR. Retrieved October 29, 2021, from https://www.undrr.org/building-risk-knowledge/understanding-risk

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AnonymousOctober 29, 2021 at 4:37 AM
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AnonymousOctober 29, 2021 at 4:38 AM

According to Investopedia in financial terms the word risk is the chance that an outcome or an investment will gain or not and maybe differ from an expected return or outcome. Wherein, as per my perspective risk is something that can affect the business which can also lead to the failure or success of the business. Risk can affect the business because there is a probability that the risk is greater than the return which can financially or operationally affect the business and so we need to come up with a soundful decision that can truly help the business to achieve its goals and in addition, as an auditor we need to have the right set of skills and also the eagerness to assess and manage the risks.

According to Murdock risk assessment is the process of identifying, measuring, and analyzing risks relevant to a program or process. Wherein, this assessment is systematic, iterative, and subject to both quantitative and qualitative inputs and factors. We can infer in the meaning that in assessing the risks there is a process and phases wherein there is a phase where risk is identified, a phase where the risks are measured and phase where the risks are analyzed that is relevant to a program wherein program refers to the series of activity, project or even function. As per my perspective for the business to thrive and succeed they need to think and plan on the ways on how to assess and manage those risks. As an accounting student that is studying about operational auditing, I can suggest that business should follow the steps of assessing risk according to Murdock which is helpful because in those steps you can identify the source of risks whether it came from internal or external environment and what kind of risk are those and from that point you can identify the impact of those identified risks and the likelihood of occurrence.

References:

Murdock, H. (2016). Operational Auditing: Principles and Techniques for a Changing World (Internal Audit and IT Audit) (1st ed.). Auerbach Publications.
Chen, J. (2020) Risk
https://www.investopedia.com/terms/r/risk.asp

RETONE, RENCE LOUIESE E. (2019-105248) CBET-01-503A

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Jerick E. GuasinOctober 29, 2021 at 7:12 AM
By definition, business risk is the threat that every company or organization is facing. This may also hinder them to achieve goals in financial aspect. Additionally, risk may also equate to that of not getting the desired planned originally set or that of not meeting the goals (Corporate Finance Institute, 2020). Thus, the importance of identifying these risks have to be done – be it inherent or controllable. But the question is how? This is now where the operational audit is used, wherein operational auditor has to observe and come up with strategies such as: sources of problems, planning out actions to do, involve other employees, and make a list or create a record of the risks identified. All these may then be classified as to what type of risk it belongs.

Indeed, eliminating the risks in terms of economic decision is impossible. However, decision-making skill will play a crucial when what to come is always unsure. According to Forbes (2021), there are ways that a management can implement to handle operations related risks, and they are: (1) Look for earlier occurrence; (2) Think through multiple scenarios; (3) Eliminate business system silos; (4) Control whatever variables you can; (5) Trust your intuition; (6) Be prepared for a pivot; (7) Research further and assess market trends; (8) Engage regularly; (9) Embrace and accept change; (10) Make a plan regarding risk management; (11) Break potential risks into smaller ones; (12) Prioritize contingency planning; (13) Determine if risk is manageable; and (14) Think through worst-case scenarios.

Evaluating risks will change as your business develops or affected by internal or external factors. This implies that the cycles you have set up to deal with your business dangers ought to be routinely surveyed. Such audits will discover enhancements to the cycles and furthermore can demonstrate when an interaction is as of now excessive (NI Business Info., n.d.)

Therefore, mitigating these said risks will require maintenance of appropriate and at the same time effective internal control. Moreover, risk management plan will be useful for it will help management anticipate risks, measure, and describe them, so that they will have definite way on how to address them. Although, these risk reduction techniques involve different processes, methods, and instruments, but it will definitely be beneficial in company’s end, because whatever the outcome will be – the company will know how to deal with them.

References:

Corporate Finance Institute. (2020, February 24). Business Risk. Retrieved October 26, 2021, from https://corporatefinanceinstitute.com/resources/knowledge/finance/business-risk/

Forbes. (2021, February 23). 14 Smart Ways to Manage Business Risk. Retrieved October 26, 2021, from https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2021/02/23/14-smart-ways-to-manage-business-risk/?sh=5defcdd0cf4e

NI Business Info. (n.d.). Prevent and reduce business risk | nibusinessinfo.co.uk. Retrieved October 27, 2021, from https://www.nibusinessinfo.co.uk/content/prevent-and-reduce-business-risk

GUASIN, Jerick E. (2019-105702 ; CBET-01-503A)
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Bianca Marie Q. AplacadorOctober 29, 2021 at 10:34 AM
Risk is the main cause of uncertainty in any organization. Thus, companies increasingly focus more on identifying risks and managing them before they even affect the business. The ability to manage risk will help companies act more confidently on future business decisions. Risk management is important in an organization because, without it, a firm cannot possibly define its objectives for the future. If a company defines objectives without taking the risks into consideration, chances are they will lose direction once any of these risks hit home. The whole goal of risk management is to make sure that the company only takes the risks that will help it achieve its primary objectives while keeping all other risks under control (Careers in Audit, 2013).
Running a business entails several risks. According to Murdock (2016), there are many negative events that could occur, so the organization should consider the many hazards that the organization and its stakeholders are or could be exposed to. These can occur depending on the magnitude, location, timing, velocity, and persistence of the hazard to cause damage to the organization, its stakeholders, and assets. The occurrence of a risk event could also have a negative effect on the relationships that the organization has with its customers, suppliers, the surrounding community, investors, and other stakeholders. The loss of confidence in the organization, its leadership, its products, and its services can be so severe that it could lead to the total downfall of the business. Therefore, when analyzing risks, the organization's reputation, as well as the health and safety of both internal and external stakeholders, should also be taken into account, rather than focusing just on the organization's monetary and physical assets.

References:

Careers in Audit. (2013). The Importance of Risk Management In An Organisation. https://www.careersinaudit.com/article/the-importance-of-risk-management-in-an-organisation/

Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. CRS Press Taylor & Francis Group. pp 63-70

Aplacador, Bianca Marie Q.
2019-106307
CBET-01-503A
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Jennalyn BatjerOctober 29, 2021 at 11:10 PM
Every business faces dangers that could endanger its success. The chance of an event and its effects are defined as risk. According to CFI, risk in business refers to the possibility that a company's or organization's plans will not come out as anticipated, that it will miss its target, or that it will fail to reach its objectives. The process of recognizing, assessing, and responding to risk factors that develop over the course of a company's activities is known as risk management. Effective risk management entails aiming to influence future events as much as possible by acting proactively rather than reactively. As a result, effective risk management has the potential to lower both the likelihood of a risk occurring and the impact of that risk (CFI, n.d.).

Risk management is an important procedure because it provides a company with the tools it needs to properly identify and manage possible risks. Once a risk has been identified, it is simple to reduce it. Furthermore, risk management provides a business with a foundation on which to make informed decisions. Risk assessment and management are the best ways for a business to plan for events that may obstruct progress and growth. When a company assesses its plan for dealing with potential dangers and then implements structures to deal with them, it increases its chances of becoming successful (CFI, n.d.).

Eventually, risk management is concerned with recognizing what could go wrong, determining which risks should be addressed, and putting in place measures to address those risks. Businesses that have identified the risks will be better prepared and will be able to deal with them more cost-effectively (Info Entrepreneurs, n.d.).

References
CFI. (n.d.). What is Risk Management? https://corporatefinanceinstitute.com/resources/knowledge/strategy/risk-management/
CFI. (n.d.). What is Business Risk? https://corporatefinanceinstitute.com/resources/knowledge/finance/business-risk/

Info Entrepreneurs. (n.d.) Manage Risk. https://www.infoentrepreneurs.org/en/guides/manage-risk/

Batjer, Jennalyn P.
2019-101439
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Jennalyn BatjerOctober 29, 2021 at 11:52 PM
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De lo Santos, Febvie Rose C.October 30, 2021 at 1:45 AM
In financial terms, risk is defined as a chance an investment will have a gain from an expected outcome or return, and it also includes the possibility of losing some or all of the investments. Risks can be measured quantifiably by using historical behaviours and outcomes. A risk assessment is a process to identify potential hazard and the things that could happen when that hazard occurs with the use of Business Impact Analysis (BIA) to determine the potential impact from business decisions and processes. If the risk assessment is the process of identifying what is the hazard or risk, in my understanding, risk management in the process of measuring, monitoring, and controlling the risk as well as the methodological approach on the risk identified. Response on risk factors is in my opinion a vital part for the business to continue and be successful.
According to Dan Moskowitz (2021), the first step in risk management should always be prioritizing risks and threats especially risks that even though not very likely to occur, have potentially substantial financial damage. Implementation of quality assurance should also always be in a business to have a good reputation and sustainable business as the always say that “customer is the key to success”. Lastly, appointing a risk management team if the business wants to save capital from not hiring an outside firm, but the head still should have an experience and skill on risk assessment and management for it to be effective, otherwise, the business should have to invest in hiring outside firm.

Chen, J. (2020). Risk. https://www.investopedia.com/terms/r/risk.asp
Moskowitz, D. (2021). Top Ways To Manage Business Risks. https://www.investopedia.com/articles/personal-finance/072315/top-ways-manage-business-risks.asp
Ready. (2021). Risk Assessment. https://www.ready.gov/risk-assessment

DE LOS SANTOS, FEBVIE ROSE C. (2019-103240)
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UnknownOctober 30, 2021 at 8:56 PM
Every business faces a variety of risks. Some of these could present threats to its financial health, while others may cause significant harm that is both costly and time-consuming to fix. According to James of Broder, CPP risk is "the uncertainty of financial loss, the variations between actual and expected result, or the probability that loss has occur or will occur". Risk is measured by the probability of a threat, the vulnerability of the asset to that threat, and the impact it would have if it occurred. In any organization, it is the primary source of uncertainty. Hence, businesses are increasingly focusing on identifying and managing risks before they it could have a negative impact on their operations.

There are four main risks in a business and these are financial risk, operational risk, compliance risk, and global risk. Financial risk, as the name implies, is anything that threatens an organization's financial growth and profitability. These business risks are frequently derived from sources outside the company, such as customers, suppliers, and legal regulations. Financial risks are inherent and widely accepted as a part of doing business for most companies, but that doesn't mean they shouldn't be avoided. Some financial risks to be aware of are– Credit, Regulatory, and Profitability. Operational risks, on the other hand, is anything that disrupts a company’s ability to function, either temporarily or indefinitely. The risk can be as unpredictable as a natural disaster, or as sinister as theft. Operational risks take many forms, which include: Fire, Theft, and Vandalism; Natural Disasters; Technology, and; Labor. Compliance risk, is the need to comply with laws, regulations, standards and codes of practice. Here are some examples of compliance issues can threaten certain sectors– Finance, Healthcare, Manufacturing, and Technology. Lastly, Global risks is the risks in conducting business with other countries or on foreign territory. Some global risks to be aware of include: Economic, Third-Party, and Cross-Border Compliance.

The ability to manage these risks will allow businesses to make more confident decisions in the future. Their understanding of the risks they face will provide them with a variety of options for dealing with potential issues. Thus, risk management is critical in an organization because without it, a company cannot define its long-term goals. If a company defines its objectives without considering the risks, it is likely that it will lose focus once any of these risks becomes a reality.

References:

Dun & Bradstreet (2000). What is business risks? https://www.dnb.com/resources/what-is-business-risk.html

Careers in Audit (15 Aug 2013). The Importance of Risk Management In An Organisation. https://www.careersinaudit.com/article/the-importance-of-risk-management-in-an-organisation/

https://m.infoentrepreneurs.org/en/guides/manage-risk/

CHENCEL-ANNMAE F. ALMODIEL (2019-105222)
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UnknownOctober 30, 2021 at 11:24 PM
Risk is inherent in everything that we do and is inevitable. Thus, mitigating this risk is essential to decrease the possible damage of something and maximize the possibility of attaining goals and objectives. By definition, the risk is the uncertainty on objectives, whether positive or negative, resulting in opportunities and threats, and the combination of the possible occurrence of an event and its consequences (ISO).
As risk is inherent to everything, it is also relevant to business as it operates with uncertainty. Strategic, Operational, Compliance are among the various types of risks that affect the business operation. A business needs to develop a response mechanism and be flexible to risk to achieve its full potential and thrive. Hence, utilizing risk assessment, analysis, and management is beneficial. Risk assessments allow the business to identify and categorize risks to understand their potential impacts. Risk analysis permits determining the significance of risk identified in the risk assessment to measure the probability of it occurring and its impact. Risk management centers on making strategies to mitigate risks, which will minimize possible adverse effects of potential loss and maximize the fulfilment of available opportunities (Dunkelberger, 2021). Furthermore, the risk is a fundamental element in achieving growth and success. Therefore, avoiding risk is not beneficial, and the best way to deal with it is to accept and embrace it by controlling and mitigating it.

References
ISO. ISO 31000:2018(en) Risk management — Guidelines. Retrieved October 31, 2021, from https://www.iso.org/obp/ui/#iso:std:iso:31000:ed-2:v1:en
Dunkelberger, D. (2021). Risk Management, Risk Assessment or Risk Analysis: What’s the Difference? Retrieved October 31, 2021, from https://www.ispartnersllc.com/blog/risk-management-risk-assessment-or-risk-analysis/

DIZON, JAKE C. (2019-106975)

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AnonymousOctober 31, 2021 at 1:40 AM
Risk is an innate part of everyday life. It is present in every moment or activity we engage in, and we also encounter multiple risks that we are frequently unaware of. These risks can have an impact on every decision and activity we make, both positively and negatively. Hence, every business or organization identifies, measures, and analyzes risks in order to understand and plan for risk mitigation.

Even though risks are inherently unavoidable, it is still necessary for any business to effectively manage those risks because they can appear from out of nowhere that may have a negative impact on the business's operation. A business faces a variety of risks, including compliance risks, strategic risks, capacity risks, environmental risks, security risks, political risks, and so on. These risks are complex and challenging. That is why a company must conduct a risk assessment and employ aggressive risk management. These processes would further assist in identifying and categorizing risks, determining their potential impacts or consequences, measuring the risks' impacts and likelihood of occurrence, and analyzing and understanding the risks that can affect the operation of the business. Furthermore, risk assessment and risk management enables the management of the business to effectively manage risks and implement procedures to prevent, control, and mitigate risks with the goal of minimizing threats and maximizing their potential. (Dunkelberger, 2021)

In addition, risks are necessary for achieving growth and development, and prosperity in life or in business. Therefore, it is important for a business to adequately identify, measure, and analyze risks in order to effectively prepare and plan for eventualities that may adversely impact the business's operations. It would also help businesses deal with potential risks and develop new risk-mitigation strategies or procedures. Moreover, risk assessment and risk management would assist the management in making informed decisions and ensuring the business's profitability.

Reference:
Dunkelberger, D. (2021, February 26). Risk Management, Risk Assessment or Risk Analysis: What’s the Difference? IS Partners Audit Without Anxiety. Retrieved October 30, 2021, from https://www.ispartnersllc.com/blog/risk-management-risk-assessment-or-risk-analysis/

GARCIA, HELEN GRACE M. (2019-106976)

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AnonymousOctober 31, 2021 at 6:25 AM
Our life involves many types of risks and it exists everywhere. For instance, you are an aspirant chef and you plan to establish your restaurant. Even though there are so many competitors and you are not well-known within your community, you still choose to create your business in the end. Although the consequences can be the failure of the business, you accept the level of risk due to your enthusiasm to achieve your objectives despite the low chances of success. In other words, there is always a risk or consequence in every decision we make. Since we have an idea of what is a risk, the next question now is how can we associate risk with a business. Business risk is a company's vulnerability to factors that could decrease its profits or cause the company to fail. It can be considered a business risk if it jeopardizes the plan of the organization to achieve its financial goals. There are several factors why a business exposes to so many risks. The reason may be due to the decisions made by the company's management or influence by different external factors such as the sudden rise of the price of raw materials, changes in government regulations or the unexpected growth of other competitors.

In business practices, management needs to identify what are the risks that might exist within their organization and how minor or severe their impact. It can be done if they conduct a risk assessment. As stated by Cole (2021), risk assessment is the identification of hazards that could negatively impact an organization's ability to conduct business. These assessments determine business risks and provide control measures and processes to lessen the influence of these risks on the operation of the business. The main purpose of the risk assessment is to analyze different hazards and their potential effects on the company and its management. It measures to offset any adverse impact on the business processes as well as the opportunities that could be beneficial to the entire organization.

Business Risks: Definitions and Examples. Indeed Career Guide. (n.d.). Retrieved from https://www.indeed.com/career-advice/career-development/risks-business.

Cole, B. (2021, October 12). What is a risk assessment?. Retrieved from https://searchcompliance.techtarget.com/definition/risk-assessment?amp=1.

STEPHANIE BALAYSOCHE (2019-101856)
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Rhea Lyn MendozaOctober 31, 2021 at 10:59 AM
Every organization faces risks that could present threats in achieving its success. Risk can be defined as the probability of an event that can occur and its consequences that will affect the organization’s operation.

According to the website of AuditBoard (2019), a risk-based approach in auditing begins with a risk dimension that serves as the foundation for the audit plan. The department's goal in a risk-based audit approach is to address management's highest priority risks. A true risk-based audit approach begins with an assessment of the top risks identified by management. All of the audits on the plan are intended to address those risks and provide information to decision makers for effective and efficient management.

Businesses face numerous risks. Thus, risk management should be an integral part of any company's strategic management. Risk management aims to assist you in identifying and addressing the risks that your business faces, increasing the likelihood of successfully achieving your business objectives. As an internal auditor, identifying risks is essential so that we can examine all potential sources of risk within the organization. Arranging all the identified risks will help in prioritizing those, that can have a significant impact are dealt urgently. Once a business entity has decided to assess potential remedies to mitigate identified risks and prevent their recurrence, auditors should have the following question in mind, “what precautions can be taken to avoid the recurrence of the identified risk?” and “what is the best course of action if it occurs again?” Lastly, developing precautionary actions for the identified risks can help to mitigate possible future risks.

Therefore, it is crucial to understand the fundamental principles of risk management and how they can be applied to help mitigate the effects of risks on business entities as they face numerous risks that can significantly affect their survival and growth.

Reference:
AuditBoard. (2019, June 12). 5 Risk-Based Audit Approaches with Tips & Techniques You Need. Accessed October 27, 2021, from https://www.auditboard.com/blog/5-Approaches-to-Risk-Based-Auditing/

- MENDOZA, RHEA LYN B. (2019-101819)
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Alyssa DueñasOctober 31, 2021 at 8:37 PM
Risk, according to Merriam Webster, is a chance of losing or incurring injury. Risk in the business context is the firm’s vulnerability that may result in low profits or business failure (Kenton, 2020).

Quoting Murdock (2017), “a chain is only strong as its weakest link,” risk should not be taken for granted as it may make or break your firm. Like in life, we may have many strengths and attributes, but sometimes, it only takes a mistake for us to have our built success go down the drain. We must pay attention to determining risks for us to prepare for what is yet to come.

As there are many types of risks, their influence and impact also vary that an auditor should forecast what is to come and make a suitable approach together with the organization’s utmost adaptability (Murdock). Risk assessment and risk management can be used to tackle those unseen and unforeseen weaknesses and threats in a business.

Risk assessment according to Murdock, recognizes, quantifies, and examines significant risks which may happen in an operation. It is done repetitively. Examples of applying risk assessment in business practices would be “Make to Order (MTO)” and “Make to Stock (MTS)” as per Murdock.

The process of MTO manufactures products only when the customer’s demand is obtained. The risk implications here would be irregular sales, lengthy delivery time, and the availability of raw materials, as stated in the Corporate Finance Institute (n.d.). Meanwhile, the risks of MTS would be inefficiency, increased wastage, and flexibility (Software Shortlist, 2021), as the process depends on demand forecasts (Murdock).

MTS and MTO consider the assemble to order method as it combines both strategies. Following Murdock, for a quick answer to the customer demand, materials for assembly are prepared early. Discovering the common ground between the two processes helps in reducing idle time and storage costs. Murdock affirms that it is not only applicable in manufacturing but also services such as corporate training.

Chambers (2010) suggests using risk matrix and risk registers when it comes to risk management. A risk matrix estimates the possibility of the happening of a circumstance together with its impact. It comes in different forms graphs and contains inherent and gross risk. On the other hand, risk registers are a less visual graph and focus more on managing and tracking threats at all levels and parts of the organization. In keeping with Chambers, the management should guarantee that they are not too focused on the goals which, may bury crucial risks. An example of this is falsification of data quality, which breaches the integrity of the organization.

Risk assessment and risk management play a vital role in keeping the company prepared against adverse risks; that’s why an organization should seek to develop appropriate measures in line with its goals and adaptability.

References:
Chambers, A., & Rand, G. (2010). The Operational Auditing Handbook (pp. 101-102, 106-107) [eBook edition]. John Wiley and Sons, Ltd., Publication.

Corporate Finance Institute. (n.d.). What is Make To Order (MTO)? Corporate Finance Institute. Retrieved October 31, 2021, from: https://corporatefinanceinstitute.com/resources/knowledge/strategy/make-to-order-mto/

Kenton, W. (2020). Business Risk. Investopedia. Retrieved October 31, 2021, from: https://www.investopedia.com/terms/b/businessrisk.asp
Merriam-Webster (2021, October 26). Risk. Merriam-Webster. Retrieved October 31, 2021, from: https://www.merriam-webster.com/dictionary/risk

Murdock, H. (2017). Operational Auditing (pp. 63-64, 70, 76) [eBook edition]. CRC Press.

Software Shortlist (2021, January 7). Make-to-order vs make-to-stock: implications for your ERP system. Software Shortlist. Retrieved October 31, 2021, from: http://www.softwareshortlist.com/erp/articles/erp-applications/make-to-order-vs-make-to-stock-implications-for-your-erp-system/

DUEÑAS, ALYSSA MAE B. (2019-102691)
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UnknownNovember 1, 2021 at 6:23 AM
Risk management is the process of identifying, assessing and controlling threats to an organisation's capital and earnings. These risks stem from a variety of sources including financial uncertainties, legal liabilities, technology issues, strategic management errors, accidents and natural disasters. The process of discovering, assessing, and controlling threats to an organization's capital and profitability is known as risk management. Financial uncertainties, legal liabilities, technology challenges, strategic management failures, accidents, and natural disasters are all potential causes of risk.

Because of its emphasis on predicting and comprehending risk across an organization, the holistic approach, also known as enterprise risk management, can be used to apply the concept of risk to a business practice. Enterprise risk management (ERM) highlights the necessity of managing positive risk in addition to focusing on internal and external threats. Positive risks are possibilities that, if seized, could boost a company's value or, on the other hand, harm it if not taken. Indeed, the goal of any risk management program is to retain and add to corporate value by making informed risk decisions, not to remove all risk.

A comprehensive risk management program allows a company to analyze all of the threats it confronts. Risk management also looks at the relationship between risks and the potential for them to have a cascade effect on a company's strategic objectives.

In any organization, risk is the primary source of uncertainty. As a result, businesses should increasingly focused on detecting and controlling risks before they have a negative impact on their operations. The capacity to manage risk will enable businesses to make more confident business decisions in the future. Their understanding of the dangers they face will provide them with a variety of options for dealing with future issues.

Another method it may be used in business is to create risk management departments, which are responsible for identifying risks, developing risk mitigation plans, implementing these strategies, and motivating all people of the organization to participate in these tactics. They're also in charge of evaluating each risk and determining which are crucial to the firm's success, ensuring that the organization only takes risks that will help it reach its core goals while keeping all other risks under control.

References:

‌CareersInAudit (2013). The Important of Risk Management in an Organisation. https://www.careersinaudit.com/article/the-importance-of-risk-management-in-an-organisation/

‌SearchCompliance Linda Tucci (2021). What is Risk Management and Why is it Important?. https://www.google.com/amp/s/searchcompliance.techtarget.com/definition/risk-management%3famp=1

BERTIZ, COLINE B.
2019-100749
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John Carlo B. De VeraNovember 1, 2021 at 6:23 PM
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John Carlo B. De VeraNovember 1, 2021 at 6:24 PM

Risk in simple terms is the possibility of a bad situation or a consequence might occur in one’s decision. In business, risk is indeed an inherent part of endeavoring any kind of business regardless if it is a small or a big venture. Risk has a significant part in every business due to the fact that these will be useful in assessing which department needs more focus or emphasis. As what economics says, higher risk is associated with greater probability of higher return whilst lower risk is associated with greater probability of smaller return. These risks are assessed through the process of identifying, measuring, and analyzing them with a systematic approach to be beneficial in the minimizing risks and maximizing opportunities for the business (Murdock, 2017). In the process of assessing relevant risk, it will be vital for an organization in knowing and emphasizing what areas of the organization need focus on especially on the opportunities and ventures it takes for the business success. Hence, risk management team will also be knowledgeable on how to treat or decide the opportunities by weighing such venture risks. Thus, helping the business to hedge risks regardless of its size but especially to an endeavor with greater risk. Furthermore, these risks will be beneficial on improving the decision-making, planning, and prioritization of the business. Also, will help the business to monitor how each department works with risks assessed in every department. And ultimately, risk management will allow business asses worst-case scenarios and hedge these higher risks to prevent greater affect on the business’ financial and management loss.

Murdock, H. (2017). Operational Auditing. Florida: CRC Press.

DE VERA, JOHN CARLO B.
2019-104382
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Sean Lester NombradoNovember 2, 2021 at 1:23 AM
Identifying threats that potentially damage an organization's ability to conduct business is known as risk assessment. These analyses contribute to identifying these possible underlying threats and establishing strategies, processes, and controls to mitigate their impact on company operations. (Cole, 2021). The risk would also be defined as a combination of the probability of an event and its consequences. On the other hand, running a business comes with many types of risks. Companies of all sizes use them to reduce business risks, create disaster recovery plans, and purchase insurance for what they cannot wholly control. Some of these possible threats could permanently damage a firm, while others can potentially create significant, costly, and time-consuming harm to restore (Davis, 2021).
Despite the inherent risks of doing company, CEOs and risk management officers may anticipate and plan for them, regardless of the size of their business—the concept of risk assessment can be applied to business practice in some different ways. Harvey (2020) states that you can assess the likelihood and impact of those threats from actually happening and allow yourself to evaluate your current security controls to determine if what you are doing will be an efficient security mechanism against a malicious attack. Another way a risk assessment can save the business is by being proactive rather than reactive. Suppose owners or auditors have the opportunity to anticipate a potential security incident and address the potential adverse impacts. Chances are it will be successful and save the business from an operational and reputational loss. Reducing the chance of threats or mishandling in the workplace could help a business protect its people against hazards. Risk assessment can also protect the company's resources and improve the company's brand image.

References:
Cole, B. (2021, October 12). risk assessment. SearchCompliance. https://searchcompliance.techtarget.com/definition/risk-assessment
Davis, M. (2021, May 9). Identifying and Managing Business Risks. Investopedia. https://www.investopedia.com/articles/financial-theory/09/risk-management-business.asp
Harvey, S. (2020, September 25). https://kirkpatrickprice.com/blog/. KirkpatrickPrice Home. https://kirkpatrickprice.com/blog/how-a-risk-assessment-can-save-your-business/

Sean Lester Nombrado / 2019-106902
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John Michael RuizNovember 2, 2021 at 1:44 AM
The concept of risk according to the International Organisation for Standardization (ISO), It is a combination of the probability of an event and its consequences. Variously, there is a proverb saying, “a chain is only as strong as its weakest link.” It tells only that all things have their weakest parts which are open for assessment and improvement. It deals with the idea that the weakest is the most vulnerable in risks. This only means that the organizations, programs, processes, and even departments are vulnerable because the weakest element can always damage, break, or adversely affect the outcome. (Murdock, 2015). We tend to identify which part of the system is the weakest and so we pay attention to a certain part, perform a gap analysis to identify the appropriate responses, implement these corrective actions, and monitor results. It is a collective responsibility of every business to put Risks Management in practice because it involves the possibility of financial and operational difficulties in the business environment. There are a lot of risks we could face and their consequences or effects may vary as to degree whether they could be anticipated or prevented. The management must be aware, engaged, and knowledgeable to learn from
history, understand the present, and prepare for the future risks.

These are risks that should be managed and assessed by the business:
1. Capacity risks - It is about following the standard operational procedure to avoid having delay in production or overproduction which results in risks of loss.

2. Strategic risks - It occurs mainly from competition. These are risks that could affect your customer relation and sales and so you have to show your customer your edges or on how your product is superior from the other.

3. Compliance risks - It is all about legal where your company has always to be compliant in federal, state, local government as well as from the internal regulations to be a going concern entity.

References:
Hernan, M. (2017). Operational Auditing. CRC Press.

Council of Europe Portal. (2021). Concept of Risk. https://www.coe.int/en/web/europarisks/concept-of-risk

Osmon V., Implications of Business Risk. https://smallbusiness.chron.com/implications-business-risk-4567.html

John Michael Ruiz (2019-103444)
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Marvie JayNovember 2, 2021 at 2:35 AM
Risks are the future uncertainties expected that could affect an entity as a result of a certain activity or decision. It is inevitable and can be low, medium, or high risks. Though there is a saying that “higher risk equals higher return”, it is still important to know the nature of the risk that will be faced in the future as it can greatly impact the operations of a business. In order to classify these risks, a risks assessment is done. According to Murdock (2017), risk assessment is the process of identifying, measuring, and analyzing risks relevant to a program or process. It is systematic, iterative, and subject to both quantitative and qualitative inputs and factors. It can be strategic, operational, compliance, reporting, or IT-related risks. Because of the possible impact of risk, a business must develop an effective risk management plan in order to identify, assess, and give proper response to eliminate, if not, reduce the risks. Risk management according to Long (2020), can be defined as forecasting and evaluating risks to the organization, determining impact (financial, brand, people, etc.) and identifying steps to avoid or reduce their impact. Effective management of risk will allow businesses to be systematic and knowledgeable in controlling and mitigating risk, and make sound decisions based on these risks experienced.

References:
Murdock, H. (2017). Operational Auditing Principles and Techniques for a Changing World. Taylor & Francis Group, LLC. pp. 64.

Long, R. (2020, January 29). The Risk Management Process: Manage Uncertainty, Then Repeat. MHA Consulting. https://www.mha-it.com/2020/01/29/risk-management/

MARVIE JAY N. SAYSON (2019-100731)
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Bernard I. DusayenNovember 2, 2021 at 9:37 PM
(1/2)

In business, there will always be some level of risk that any organization must bear in order to achieve its objectives. In essence, risk is a necessary component of growth, progress, profit, and wealth. According to Investopedia, business risk is a company's or organization's vulnerability to factors that will reduce profitability or cause it to collapse. A business risk is anything that jeopardizes a company's capacity to meet its financial objectives (Kenton, 2020).

Risks come in a variety of shapes and sizes. Witte cites the Committee of Sponsoring Organizations of the Treadway Commission (COSO) advice, which divides risk into four categories: strategic risk, compliance risk, financial risk, and operational risk (Tucci, 2021). Strategic risk occurs when a company fails to follow its business strategy or plan. Compliance risk is more prevalent in highly regulated industries and areas. Operational risk develops from within the organization, particularly when a company's day-to-day operations fail to function. Finally, financial risk comes as a result of financial market instability, losses, or swings in stock prices, currencies, interest rates, and so on.
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Bernard I. DusayenNovember 2, 2021 at 9:38 PM
(2/2)

It might be difficult to sort through the various risk-related words, such as risk assessment, risk management, and risk analysis. The key distinction, though, is breadth (Dunkelberger, 2021). To begin, risk management entails identifying, analyzing, evaluating, and prioritizing present and anticipated hazards. This enables you to handle loss exposures, monitor risk control, and financial resources in order to reduce the potential negative effects of prospective loss. Furthermore, a solid risk management approach enables you to optimize the realization of available risk-aversion options. Second, risk assessment assists you in identifying and categorizing hazards. Furthermore, it gives a framework for various outcomes. It also includes methods and technologies that aid in the identification, evaluation, and reporting of any risk-related concern. Finally, risk analysis is a critical evaluation component of the whole risk management and assessment processes. Risk analysis assesses and provides the relevance of discovered risk factors identified throughout the risk assessment process. Furthermore, it assesses risk by calculating the likelihood of risks occurring and tolerances for specific events.

Scoring the identified risks encompasses the chance of occurrence as well as the projected magnitude of the potential impact. This allows you to prioritize risks and devise a strategy for managing them.

References:

Dunkelberger, D. (2021, August 1). What's The difference: Risk management, risk assessment, risk analysis? I.S. Partners. Retrieved November 3, 2021, from https://www.ispartnersllc.com/blog/risk-management-risk-assessment-or-risk-analysis/.

Invest Northern Ireland. (n.d.). Risk management: Financial risk. nibusinessinfo.co.uk. Retrieved November 3, 2021, from https://www.nibusinessinfo.co.uk/content/financial-risk.

Kenton, W. (2021, May 19). Business Risk. Investopedia. Retrieved November 3, 2021, from https://www.investopedia.com/terms/b/businessrisk.asp.

Tucci, L. (2021, October 12). What is risk management and why is it important? SearchCompliance. Retrieved November 3, 2021, from https://searchcompliance.techtarget.com/definition/risk-management.

Dusayen, Bernard I.
(2019-106143)
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Hans Theo ValenzuelaNovember 2, 2021 at 10:35 PM
According to Chen (2020), Risk is defined in financial terms as the chance that an outcome or investment's actual gains will differ from an expected outcome or return. Risk includes the possibility of losing some or all of an original investment. In more simpler terms, risk are threats that could affect the business severely but sometimes these risks are opportunities that will help the business. Some risk will really hinder the progress of the business if not found soon. That’s why we have Risk Assessment. According to Murdock (2015) Risk Assessment Is the process of identifying, measuring, and analyzing risks relevant to a program or process. This assessment is systematic, iterative, and subject to both quantitative and qualitative inputs and factors. Furthermore, it is also dependent on the timeframe of the review. We need to know what type of risk it is, how it originated, how big it is, and how will it affect the business. Seeing how a business operates and how they manage risk will them in the long run. Assessing risk should always be done step by step in order for the business to fully comprehend and know the risk they are about to take.

Sources: Chen, J. (2020, October) Risk. Investopedia
https://www.investopedia.com/terms/r/risk.asp
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. CRC Press Taylor & Francis Group. pp 63 - 82

Valenzuela, Hans Theo Ezequiel N. (2020-110421)
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John Paul SavillaNovember 2, 2021 at 11:22 PM
Some phenomenon may happen to be in favor or against the one in charge. It maybe classified as opportunity or threat depending on the approach that someone will going to take. Risk is the uncertainty that something dangerous may happen in the future, if not properly addressed may result as a threat, on contrary if managed properly may result as opportunity. Risk carries both characteristics that results in minimizing threat and maximizing opportunities. In relating to business, which a primary purpose is to gain profit, risks plays a vital role in carrying businesses primary objective. In past years, management of risk became a very part of a business that they managed to categorized it and therefore having a complete processes to properly address it. Risk in business can be categorized as economic risk, compliance risk, security and fraud risk, financial risk, reputation risk, operational risk, competition risk and many more. Process in talking, risk usually has three primary processes to take into account. Processes of risk includes identifying the risk, measuring the risk and analyzing the risk.

Variables affects the exposure of business to risk. A good organizational management will identify risk as early as possible in order to addressed it properly. Approach to take to identify those risks usually lies on how will the management comprehensively identify the business activities. Being able to identify business activities also means being able to anticipate what might happen in the future. It's like putting your own feet to someone's shoes. Organization's management might want to accept the risk which in return might result in a greater return. Organization's management might transfer the risk which they will learn from the approach that others might consider to address it. Organization's management might reduce the risk to minimize the exposure to both threat and opportunity. And organization's might completely address the risk to eliminate it. Risk approach differs in every organization's as they have different processes and activities. Moreover risk must be taken as it the bigger it is, the bigger the return.

Boitnott, J. 2021. Types of Business Risks to Plan For
Chen, J. 2020. Risk. Investopedia. https://www.investopedia.com/terms/r/risk.asp
Davies, M. 2021. Identifying and Managing Business Risks. Investopedia. https://www.investopedia.com/articles/financial-theory/09/risk-management-business.asp
Iris Intelligence. (n. d.). Defining Risk and Opportunity. https://www.irisintelligence.com/blog/defining-risk-and-opportunity/

John Paul Savilla, 2019-101412
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UnknownNovember 3, 2021 at 12:44 AM
Risk denotes the possibility that a company's or organization's plans will not go as planned or that it will fail to meet its aim or achieve its objectives.

Every environment and business is fraught with risks. Risk can't be avoided, so they have to be dealt with head-on to have the least amount of impact. To develop a risk management strategy, the first step is to identify the risks. There are two types of nature of risk: the inherent and controllable risk. Inherent risk is a risk that was already existing before setting up a business. In contrast, the controllable risk is a risk that the management can control through implementing proper internal control. After identifying the threat, next is measuring the size of the risk, if it is low, medium, or high. And lastly, analyzing the effects of the risk if it is hazardous or not.
It is essential to understand the nature of the risk because this is the first step in determining its risk, for example, in a company's global environment. If the company is based in America and does business with China, trade tensions may be between the two countries. And if the American company is unable to obtain the supplies or products it requires, the company's viability may be compromised. And until now, tensions between the two countries have been rapidly escalating. This is an example of an inherent risk that the management can't be controlled. Controllable risk, on the other hand, is when the company is located in an area prone to natural disasters such as flooding or earthquakes. They can reduce the risk of flooding by constructing a building that cannot be easily flooded, such as raising the structure's ground higher than usual and making it with multiple stories. In addition, the best structural engineer should be hired to ensure the building's safety and durability.
It is indeed vital to identify what kind of risk that the business has, to be able to conduct proper internal control.

REFERENCES:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. CRC Press Taylor & Francis Group. Pp 64-65
White, A. (2019). Can You Identify Significant Risks for an Audit Client? Amanda Loves to Audit. Retrieved October 8, 2021. https://www.youtube.com/watch?v=ENdilHkF2wY

Aronce, Mary Angelou N. 2019-105627
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Vince DelambacaNovember 3, 2021 at 2:08 AM
Essentially, risk denotes to the possibility of future earnings or outcomes deviating from expectations. Risk refers to the level of risk that a venture capitalist is ready to accept in order to maximize revenue from an investment. It is also likelihood of anything awful happening when there's ambiguity about the effects/implications of an activity on something humans value, with a focus on negative, unwanted outcomes.

In the field of organization, it is essential to comprehend the essence of risk assessment towards ti the impact of the firm. Risk assessment is the process of identifying prospective vulnerabilities and determining what might happen if they occur. According to Murdock, it is fundamental factor beacuse its identify, measured,and analyze hazards associated with a process, causing to have contingent on review's timeline. In assessing the risks, it is critical to considered steps in order to grasp its donotation, usage and impact in organizations. There are 3 major steps in assessing the risks namely: identifying the risks, measuring the risks and analyzing the risks. Risk is the primary source of uncertainty in any firm, as we all know. As a result, business are increasingly focusing on identifying the nature of risks in order to know where the risk came from and to ascertain what assistance should be yield.

Risk measurement is also imperative since it allows us to determine the size of the risks whether a risk is high, average or slow. Risk measurement are statistical indicators of uncertainty and variance that have been used to anticipate them in the past. Business can understand the significance of the risks they face through measurements. Furthermore, Organizations can more easily assess risks on a variety levels and observe declines of improvements in their overall conditions or specific problem areas when they measure risk. Following the identification and measurement of risks, it is critical to conduct a risk assessment analysis in order to know the effects and understand what requisites must be met with the aim to achieve and maintain a sound risk solution. Moreover, risks analysis is a tried-and-true method of identifying and evaluating elements that could jeopardize a company's or projects success. It enables you to assess the risks that company incur and determine whether or not to proceed with a decision.

Hence, risks management is the practice of insurance in and of itself, and it is a prerequisite for long term success. A thorough examination of your company and industry will aid in the development of a risk management strategy that could revamp the company you worked so hard to build. The purpose of assessing risks was to develop a system for quantifying operational risks company profiles and finding effective solutions to mitigate them. In order to interact with this, organizations must yield valuable information on how to eliminate this risk. To mitigate this risk, business should address these issues through the application of scientific and unique methods of economic research in a system that will achieve a broad approach and logical decision-making procedures.

REFERENCES:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. CRC Press Taylor & Francis Group. pp 63 - 82
Rob Burgon ( 2013). Step Guide to Risk Assessment: https://rospaworkplacesafety.com/2013/01/21/what-is-a-risk-assessment/
Volodymyr V Bobyl, Maryna A Dron, AS Taranenko (2018). Operational risks. nzpr.ukma.edu.ua

DELAMBACA, VICENTE JR T. 2019-106640
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Don Luis M. VillanuevaNovember 3, 2021 at 3:10 AM
Risk would be defined as a "combination of the probability of an event and its consequences" According to the International Organisation for Standardization (ISO). And risk derives from the early Italian risicale, which means "to dare" in the sense, risk is a choice rather than a fate (Pickett, 2002). Basically risk is the possibility that something may happen. The uncertainty is present and often focus on negative and undesirable consequence.

Risk assessment is one of the concept of risk, it is the process of identifying, measuring and analyzing the risks relevant to a program of process (Mundock 2015). Risk assessment is important to conduct in order to know the possible or existing risk and for them to take action as quickly as needed. The steps in assessing the risk is first, identify the nature of risk. Identify if it is inherent risk or risk that is already existing or controllable risk or risk that are not too significant and can be controlled. Second is measure the size of the risk, measure whether if it's significant or not, timely or need urgent respond. Last is analyze the effects of risk, auditor analyze all the effects and take actions by avoiding the risk, control the risk and accept the risk.

Risk assessment should be applied to every business, it creates awareness to the risk and hazards. It will also protect the business from failures and the risks. This will help to properly implementing action through identifying and measuring the risk. Risk assessment can be done by operational auditor.

REFERENCES:

Grabillo, M. A. (2021). Risk Assessment Parts 1 & 2. Accounting Made Easy. Retrieved October 25, 2021. https://www.youtube.com/watch? v=lk313MOYcl0&list=PLqmYUi2kytZY168mPBCbvZLI QETDe8tat&index=2

Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. CRC Press Taylor & Francis Group. pp 63-82

Pickett, K. H. S. (2002). The Internal Auditing Handbook 3rd Edition. John Wiley & Sons, Ltd. ISBN 978-0-470-51871-7. pp 177

- Don Luis M. Villanueva (2019-102313)

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AnonymousNovember 3, 2021 at 8:45 AM
In my opinion, Risks are anything that can or will be a burden in doing business transactions and will lead to a decrease in the income of the business or reaching its full potential. The most common thing to consider in doing any business-related activity is the concept of risk especially the “the higher the risk the higher the reward” concept, but this is not always the case since not all risk is worth the risking and some risks can be avoided in the first place. for instance, there are controllable risks that can be manipulated and reduced the impact it has if given the right treatment.

This reduction or minimizing of the risk can only be done by doing the proper risk management. According to www.ispartnersllc.com, there are 3 levels of risk management. The smallest level is risk analysis, it identifies and measures the risk, and the impact it has at a micro-level process. It is common in traction between the entity and potential client or investor. The next level is Risk-assessment or the meso-level analysis, it divides the risk into smaller threats that can be identified into different categories and define the impact it has. The highest level is Risk management, identifying, mitigating, and prioritizing the risk can have an impact on the entity’s performance and balance sheet account.

(Niel Camorongan/2019-102455)
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Me-An Joy A. OmpadNovember 3, 2021 at 10:11 AM
Running a business is not easy, it is more than selling your product and earning money. When you start a business, you need to identify the possible risks that you may encounter and think a solution to reduce its impact. According to the International Organization for Standardization (ISO), the risk would be defined as a "combination of the probability of an event and its consequences". Risk is the possible outcome of a situation that the business is involve with and what its impact. The consequence of the different types of risks may vary on how the business will respond, that’s why it is important to give attention when assessing the business strengths and weaknesses to identify the appropriate response, to implement the action plan, and to monitor the results. There are two types of risks, the inherent risk and controllable risks. The inherent risk comes from the nature of the business transaction or operation while the control risk arises because an organization doesn’t have proper and accurate internal controls to detect the present error or fraud in the organization. It is important to assess the type of risk to give a proper evaluation to reduce its impact.

Even though risks are part of doing a business, we must find ways to manage those risks effectively to reduce its impact. The suggested ways after analyzing the concept of risks in the business are: first, identify the risk the nature of the risk whether it is inherent or control risk. Next is, measure the size of the risk on how it can impact the entity or based on its degree to the business. And last, analyze the effect of the risks if it’s cost the entity a loss or will it create an opportunity. (1/2)

-OMPAD, ME-AN JOY A. (2019-104916)
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Me-An Joy A. OmpadNovember 3, 2021 at 10:13 AM
That’s why it is important to establish a proper and accurate risk assessment and management. An effective risk assessment and management of an organization will help the entity to function effectively and attain their goals. The main goal of the risk assessment and management is to identify the risk, make a proper evaluation on how it will alleviate its influence to the operation of the business.

REFERENCES:
Concept of Risk. (n.d.). Retrieved from Council of Europe:
https://www.coe.int/en/web/europarisks/concept-of-risk

Davis, M. (2021). Identifying and Managing Business Risks. Retrieved from
Investopedia: https://www.investopedia.com/articles/financial-theory/09/risk-
management-business.asp

Grabillo, M. A. (2021). Risk Assessment Parts 1 & 2. Accounting Made Easy. Retrieved
October 25,2021. https://www.youtube.com/watch?v=lk3l3MOYcl0&list=
PLqmYUi2kytZYI68mPBCbvZLlQETDe8tat&index=2

Reciprocity. (2020). Inherent Risk vs. Control Risk: What’s the Difference?
Retrieved from Reciprocity: https://reciprocity.com/inherent-risk-vs-control-risk-
whats-the-difference

(2/2)
-OMPAD, ME-AN JOY A. (2019-104916)
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Divine Grace A. MondiaNovember 3, 2021 at 11:51 AM
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Divine Grace A. MondiaNovember 3, 2021 at 12:05 PM
Risk is defined as an event having adverse impact on profitability due to several distinct source of uncertainty. It is necessary that the managerial process captures both the uncertainty and potential adverse impact on profitability or reputation of the business. Risk is an event or injury that can cause damage to an institution’s income and reputation. It is like energy that cannot be created or destroyed but can only be passed on or managed. Risk has a direct relationship with return, i.e., higher the risk higher the return and vice versa. Precisely because of this, risks are needed for the conduct of business.

This concept can be applied to any type of business but mostly applicable to investments such as stocks, forex, cryptocurrencies, etc. These kinds of businesses are exposed to high risk but at the same time has higher returns or earnings. The risks that can damage in field of investment are the changes of market risk, this un/certainties might affect the rise or fall of your investment. We cannot extinguish or destroy risks but it is manageable. Therefore, it is necessary to study and be familiar with the related risks of your interested business before entering on it.

Pallavi, K. (n.d). Risk: Meaning, Concept and Characteristics. Retrieved (Nov. 2021) from https://www.yourarticlelibrary.com/business/risk-management/risk-meaning-concept-and-characteristics/89506

MONDIA, DIVINE GRACE A.
2019-105175
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Thea Sofia A. BarabichoNovember 3, 2021 at 7:43 PM
Everyone experiences risk on a daily basis, may it be financial, environmental, personal, business, and the like. It is any unforeseen thing that might or might not occur in the future. Like any other people, businesses also face threats to the company’s ability to achieve their financial goals. From a business perspective, risk is the possible chance that a plan may not turn out as originally planned or a goal will not be met. In order for an organization to set its feet on safer grounds, they must learn how to assess and manage risks to mitigate the impact of any negative events which could possibly be disastrous and chaotic.
The concept of risk is applied to business because organizations make various economic decisions which will determine their current and future financial standing. According to Murdock, some internal auditors fail to identify relevant risks due to their insufficient knowledge about the audit process. Through this, the importance of auditors is highlighted because of doing research and planning in order to gain familiarity over the activities involved. This process is called risk assessment which is the identification, measurement, and analysis of the risks inherent and controllable significant to a certain activity.
Risks, even though it might seem scary, can deliver positive outcomes too. Risks do not always connote a negative impact because it is just an event with an uncertain outcome. There is a saying that goes, “High risks will give you high rewards.” If a company is willing to take on a risk and prepare for it successfully, it can turn the tables around and give a lot of opportunities. It is true that the operation of a business entails a lot of risk determination and mitigation. Some of these risks have the capacity to exhaust and wipe out organizations. Eliminating risk is impossible, but it can be reduced to a minimal impact. However, with proper planning and decision-making, a company can continue to live and dominate another day in the market.

Barabicho, Thea Sofia A.
2019-106912

Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World (Internal Audit and IT Audit) First Edition. CRS Press Taylor & Francis Group. pp 64
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UnknownNovember 3, 2021 at 8:44 PM
In the corporate world, every choice that an entrepreneur makes, whether small or big it is, is a risk. According to Chambers and Rand (2010), governance processes, internal control, and risk management are the three overlapping areas that correspond to the scope of internal audit’s review. Meaning to say that risk has become one of the most assessed and essential parts of a growing business. Kenton (2020), defined risk in business as the exposure a company or organization has to a factor that will lower its profits or lead it to fail. These risks are the threat that a company needs to assess not just in business operations but also the aftermath of any business decisions. To furtherly control these risks, the management should put an effort to adapt risk assessment to the business by means of identifying what type of risk is outgrowing the business, what and how much impact it can cause- whether it is likely to happen or almost certain, and analyze the effects of these risks. A successful risk management program can help the organization see the full range of risks that it will face in the future. Proportionately, if the entity fails to assess the risks that a company faces, a company can experience a high degree of business risk that may result in impairment or inability of the business to sustain the expectations of its investors and stakeholders. As we can see, it can affect the overall performance of a business in a chain-like structure. In a certain condition that the leaders of the company or let say the authorities made a decision that failed due to improper assessment, it will affect ofcourse the board of directors especially the investors. The company will lose the trust of the investors and will discourage them from investing more in the company. Not only the investors but also the customers trust that gives life to the company. This will result in business loss in the future.

Reference:
Chambers, A. & Rand, G. (2010). The Operational Auditing Handbook: Auditing Business and IT Processes. John Wiley and Sons, Ltd., Publication. pp 95 - 112
Kenton, W. (2020, July 28). Business Risk. Investopedia. https://www.investopedia.com/terms/b/businessrisk.asp

Bandola, Erica C.
2019-105307

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UnknownNovember 3, 2021 at 10:12 PM
According to James Chen (2020), risk is defined in financial terms as the chance that an outcome or investment's actual gains will differ from an expected outcome or return. Risk includes the possibility of losing some or all of an original investment.
Risk can occur in strategic risk, compliance risk, operational risk and reputational risk. Strategic risk refers to the internal and external events that may make it difficult, or even impossible, for an organization to achieve their objectives and strategic goals. These risks can have severe consequences that impact organizations in the long-term. Compliance risk is an organization's potential exposure to legal penalties, financial forfeiture and material loss, resulting from its failure to act in accordance with industry laws and regulations, internal policies or prescribed best practices. Compliance risk is also known as integrity risk. Operational risk is the risk of loss resulting from ineffective or failed internal processes, people, systems, or external events that can disrupt the flow of business operations. The losses can be directly or indirectly financial. Reputational risk is a hidden danger that can pose a threat to the survival of the biggest and best-run companies. Reputational risk can also arise from the actions of errant employees, such as egregious fraud or massive trading losses disclosed by some of the world's biggest financial institutions.
Overall, it is possible and prudent to manage investing risks by understanding the basics of risk and how it is measured. Learning the risks that can apply to different scenarios and some of the ways to manage them holistically will help all types of investors and business managers to avoid unnecessary and costly losses.

Chen J. (2020) Reviewed by Brock T. Investopedia: Risk. https://www.investopedia.com/terms/r/risk.asp
Glossop A. (2021) Ideagen: Strategic risk: a quick guide https://www.ideagen.com/thought-leadership/blog/strategic-risk-a-quick-guide
Sales F. (N.D.) Compliance risk. https://searchcompliance.techtarget.com/definition/compliance-risk
Kenton W. (2021) Fact checked by: Rathburn P. Investopedia: Reputational Risk https://www.investopedia.com/terms/r/reputational-risk.asp
N.A. (2018) What is operational risk management? The Overview https://www.auditboard.com/blog/operational-risk-management/

NUDO, MARINEL S.
2019-106335

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AnonymousNovember 3, 2021 at 11:04 PM
Risk is defined as an uncertain event that, if it occurs, will affect the achievement of an objective or goal. Businesses are usually exposed to risk. That’s why it is imperative for an organization to have an audit team or to hire an external auditor to assess and manage those risks. Risk assessment is sometimes confused with risk management. Risk management is the overall or macro-level process of how the organization identifies, measures, and responds to risk, while risk assessment is a process within risk management. Risk assessment is the foundation of audit as it is done to identify, measure, and analyze risk. In risk assessment, it is important to identify the risk, whether it is an inherent or controllable risk. Inherent risk refers to natural risk which the organization is exposed to, such as natural environmental risk and political risk. The organization has no control over inherent risk, but they can design a plan to mitigate it. Controllable risks, on the other hand, are those risks that the organization has control over and over which they can do something, not just to mitigate but rather to illiminate. In risk assessment, it is also important to measure the size of the risk and analyze the effect of those risks on the operation in order to come up with a plan that can address the risk identified. Risk assessment is conducted to look for vulnerable areas of an organization or operation that make it susceptible to risk. Risk management or assessment is a vital part of the audit that, if only done by all businesses, there’s a high chance that they will succeed and achieve their objectives.

Reference:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. CRC Press Taylor & Francis Group.

BUCAL, RINA P. (2019-102462)
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Airon Nicole JadraqueNovember 3, 2021 at 11:09 PM
Every once in a while in one’s life come challenges. These challenges can be so daunting and demanding that it places the person in not just a weird external state but also a peculiar state of mind. Since the risk is uncertain one has to guess the probability of risk occurrence. In order to minimize the possible detrimental effects, not only for us individuals but to the businesses and any other organizations or matters, we have to anticipate every possible risk and be ready enough to deal with it and solve it to the extent of what we can do in order to control the outcome and other unfortunate consequences.

Risk events are not only uncertain, but also lurk with possibility of severe loss. Identifying every risk or doing a risk assessment will be a great help towards achieving one's goal. Risk assessment is defined as the process of identifying, measuring, and analyzing risks relevant to a program or process. This assessment is systematic, iterative, and subject to both quantitative and qualitative inputs and factors. Furthermore, it is also dependent on the timeframe of the review (Murdock, 2015).

Businesses, no matter how we see some of them as great, strong, and successful as they look like, they're still fragile and prone to different risks and perhaps failure. Applying the concept of risk would swerve the business' path, it will make the business more robust, flexible and adaptable with the situation. Although risks are inevitable and can not be eliminated, these can be controlled with proper preventive measures so businesses could still go on without fearing that they'll collapse and plummet eventually as long as things are in control and the person dealing with it is extremely capable and smart.

Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. CRC Press Taylor & Francis Group. pp 63 - 82

JADRAQUE, AIRON NICOLE T.
2019-101826
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Dela Cruz, Joyce Ann N.November 4, 2021 at 12:17 AM

Business risks are anything that threatens a company's ability to achieve its financial goals. There are many factors that can converge to create business 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. Running a business comes with many types of risk. Each decisions of a manager or anyone who manages and governed the institution might encounter different risk which can affect their future decisions for their company. Some of these potential hazards can destroy the operations of an organization, while others can cause serious damage that is costly and time-consuming to repair or solve (Davis, 2021). There are proper ways and means to ensure against it, to prevent and to minimize their damage on the institution. Risk management is one of them. It is the process of identifying, assessing and controlling threats to an organization's capital and earnings (Tucci, 2021).
Risk concepts can and may be applied to the overall operations of the business using organizational strategy. Strategies which can help identify what risk, how can it affect the organization and how big or small the impact of these risks to the managers, employees, and stockholders of the company. Just like what Forrester Research senior analyst Alla Valente, a specialist in governance, risk and compliance, said that companies don't manage risks so they can have no risk. It manage risks so they will know which risks are worth taking, which ones will get us to its goal, which ones have enough of a payout to even take them. In conclusion, the aim of any business risk management program is not to eliminate all risk but to preserve and add to enterprise value by making smart risk decisions.

References:
Davis, M. (2021). Identifying and Managing Business Risks. Investopedia. https://www.investopedia.com/articles/financial-theory/09/risk-management-business.asp

Tucci, L. (2021). What is risk management and why is it important?. TechTarget. https://searchcompliance.techtarget.com/definition/risk-management

- Dela Cruz, Joyce Ann N. (2019-105673)
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Palogan, Danielle C.November 4, 2021 at 1:48 AM
Risk involves future uncertainty regarding differences from expected returns or expected outcomes. In relation to business, the business risk is the risk that a company or organization is exposed to factors that could undermine its profits or lead to bankruptcy (Kento, 2020). There are many types of risk, these are strategic, operational, compliance, reporting, and IT-related.
Every firm or organization is vulnerable to risk, and it is impossible to avoid. In entrepreneurship, risk-taking is encouraged because innovation cannot happen without risk. Furthermore, it is also necessary to know what risk is worth taking because not all risk applies to every organization, for there are differences in industry, business practices, geographical location, and the size of the organization. That is why businesses should engage in risk assessment or risk management. Risk assessment helps to identify relevant risks and measure and analyze the risks.

The concept of risk can be applied in business. Sidorenko(2016) outlines four key criteria that are essential for effective risk management. The criteria are as follows: integrating risk into decision making, strong risk management culture, disclosing risk information, and continuously improving risk management. Like other elements of corporate governance, risk management needs to be integrated into the organization's overall management system. ISO 31000: 2009 clearly states that risk management needs to be adaptive, dynamic, repetitive, and adaptable to change. As an organization's risk increases, so do the tool it uses to manage the risk in decision making. Professional risk managers need to not only develop their organization's risk management process but also improve their risk management skills.

References:

Kenton, W. (2020). Business Risk. investopedia.com/terms/b/businessrisk.asp

Sidorenko, A. (2016). Four key concepts for effective risk management. https://www.continuitycentral.com/index.php/news/erm-news/1402-four-key-concepts-for-effective-risk-management

PALOGAN, DANIELLE C. (2019-101944)
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Mark Raven R. DizonNovember 4, 2021 at 2:27 AM
Describe the concept of risk and suggest ways that this concept can be applied to business practice.
In finance, risk is the probability that actual results will differ from expected results. In the Capital Asset Pricing Model (CAPM), risk is defined as the volatility of returns. The concept of “risk and return” is that riskier assets should have higher expected returns to compensate investors for the higher volatility and increased risk. (Corporate Finance Institute. 2020, January 24).
According to the International Organisation for Standardization (ISO), the risk would be defined as a "combination of the probability of an event and its consequences". Consequently, a potentially dangerous event, the HAZARD , is not transformed into RISK only if it applies to a zone where human, economic or environmental STAKES are in presence and this zone has a certain degree of VULNERABILITY. (BPP Learning Media 2020) ACCA strategic business leader.
Hazard is characterized by its probability of realization (annual, decennial, centennial...) and its intensity (magnitude for seisms, height and speed of water for floods, bandwidth for landslides, etc.). (Publications Division 2020). India 2020: Reference annual book. Publications Division Ministry of Information & Broadcasting.
Risk is the probability that an accidental phenomenon produces in a given point of the effects of a given potential gravity, during one given period. (Rausand, M., & Haugen, S. 2020). Risk assessment: Theory, methods, and applications. John Wiley & Sons.
Stakes are buildings (commercial dwellings, buildings, factory sites, ...), infrastructures (gas/water/electricity supply networks, road, etc.), cultures (agricultural, animal, etc.), and naturally population. (United Nations Publications 2017). Sustainable consumption and production: A handbook for policymakers. UN.
Vulnerability of a zone or a given point is the appreciation of the sensitivity of the targets present in the zone at a type of effect given (intensity of seism, volume of precipitations, concentration of toxic product, etc.). (Blaikie, P., Cannon, T., Davis, I., & Wisner, B. 2014). At risk: Natural hazards, people's vulnerability and disasters. Routledge.
The uncertain economic times of the past few years have had a major effect on how companies operate these days. Companies that used to operate smoothly with the help of forecasts and projections now refrain from making business judgements that are set in stone. Now, companies have a renewed focus: to manage risk. (Byars, S. M., & Stanberry, K. 2018). Business ethics.

Risk is the main cause of uncertainty in any organisation. Thus, companies increasingly focus more on identifying risks and managing them before they even affect the business. The ability to manage risk will help companies act more confidently on future business decisions. Their knowledge of the risks they are facing will give them various options on how to deal with potential problems. (Mack, O., Khare, A., Krämer, A., & Burgartz, T. 2015). Managing in a VUCA world. Springer.
References:
https://www.careersinaudit.com/article/the-importance-of-risk-management-in-an-organisation/
https://www.coe.int/en/web/europarisks/concept-of-risk

DIZON, MARK RAVEN R. (2019-107007)
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Genelyn AloroyNovember 4, 2021 at 2:35 AM
Describe the concept of risk and suggest ways that this concept can be applied to business practice.

Risks are always in the environment. These are uncertainties that may or may not happen. However, there are ways that we can mitigate these. It could result to a negative or positive impact which results to a positive effect that could use on succeeding events. In order to mitigate risk, it should initially identify accordingly. Proper identification of risk could result in proper assessment, analysis, evaluation and control that leads to more suitable ways of mitigating the identified risk. On the other hand, risk management is a holistic approach in managing risk, it emphasizes on forecasting and understanding risk across the organization. An effective risk management program allows a company to analyze all of the hazards that it confronts. Risk management also looks at the link between risks and the potential for them to have a cascade effect on an organization's strategic goals.

Risks in business are the uncertainties or threats that hinders in the company’s ability to achieve financial goal. Risk is also important in business. By proper management and mitigation, it could result in a positive impact in the overall company’s performance. Most businesses adopt the use of risk management strategy and development of strategic risk plan to control the risks associated in the operation of the business. Some examples of business risks are change in consumer taste, change in demand, state of overall economy and government rules and regulations. However, risks such as fire, explosion and hazardous materials accident risks can be managed through insurance.

Prevention is the best risk insurance. Employee training, background checks, safety inspections, equipment and physical facilities maintenance are the greatest ways to prevent numerous dangers from arising in your firm. Risk management tasks should be delegated to a single, accountable employee with managerial responsibility. While there are many business risks, and their implications may be severe, there are strategies to protect against them, prevent them, and reduce the harm they cause if and when they occur. Having an effective risk management is an important step in risk prevention and management.

References:
Tucci, L. (2021 October). What is risk management and why is it important? Retrieved from: https://searchcompliance.techtarget.com/definition/risk-management
Kenton, W. (2020 July 07). Business Risk. Retrieved from: https://www.investopedia.com/terms/b/businessrisk.asp
Davis, M. (2021 May 09). Identifying and Managing Business Risks. Retrieved from: https://www.investopedia.com/articles/financial-theory/09/risk-management-business.asp

ALOROY, Genelyn T.
2019-202971
CBET 01-501A
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AnonymousNovember 4, 2021 at 4:28 AM
According to Merriam Webster, risk is defined as the possibility of loss or injury, and in terms of business, if something is at risk, it is in a state or condition marked by a high level of risk or susceptibility. In the field of business, risks are uncertainties or events that are unexpected which are beyond control by the management. For the longest time, risk is an essential part of every business, it exists when a business exists, hence, risk is inevitable. Risks are broad discussion as for the fact that they vary based on the nature, size, and industry of a business, risk may be significant in one firm but it does not mean that the same is also significant to the other, or vice versa, even though they are the same type of risk. There are different ways risks can be related to business since there are different types of it but most significant ones are the risks inside the business or organization itself such as risks in the operation which are essential matters that must be dealt with as effective as possible. Operational risks occur when there is a flaw in the organization internally particularly when a department is not carrying out its responsibility efficiently and if the management would not address and handle it as soon as possible, then it might affect the whole operation and may lead to disrupt the organization’s objectives. Furthermore, internal risks are not the only ones that management must consider, risks come from various sources and one of these is derived externally. Organization may encounter risks from changes in technologies, environment, and customer preferences, and if they can’t keep up with these changes, it will probably affect the profitability of the organization. Risks may also happen financially wherein it relates to the organization’s financial health or the ability to carry on operations in case of non-payment by clients. Moreover, risks may cause tremendous loss to an organization if not given attention and plan to handle, with that being said, it can still be prevented and controlled by creating an efficient and effective program or policy.

Chavez, Catherine H.
2019-101209
CBET-01-502A
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UnknownNovember 4, 2021 at 4:38 AM
Risk is the exposure of the business to a possible failure or loss. If the business cannot identify or control the risk, it will greatly affect them. According to Chamber & Rand (2010) Risk can be defined as a function of what is at risk and how likely is it to be at risk. In other words, the extent (or size) of the risk and the probability of that risk actually occurring. An alternative term for the size dimension would be inherent risk. An alternative term for the probability dimension would be the control risk or the system risk. Risk cannot be prevented but it can be mitigated by having a risk assessment. Assessing the risk is some ways that this concept can be applied to business practice. Risk assessment is the process of identifying, measuring, and analyzing risks relevant to a program or process. This assessment is systematic, iterative, and subject to both quantitative and qualitative inputs and factors. Furthermore, it is also dependent on the timeframe of the review (Murdock, 2017). (1/2)

Maria Eloisa A. Ramos
2019-101335
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UnknownNovember 4, 2021 at 4:40 AM
The first step is identifying the nature of risk, it is important because it can further distinguish whether it is inherent or control and if it is significant or not. Second step is measuring the size of risk; to be able to perceive how it will affect the business, if it has high impact, medium impact or low impact. Lastly, analyzing the effects of risk can reduce or control its harmful result in the business. Some of the common risks that operational auditors should consider during their risk assessments are: capacity risk, the inability to produce as many units as required; strategic risk is the changing customer preferences; compliance risk is meeting external requirements (e.g., laws and regulations); natural environment risk; and, political risk (Murdoc, 2017). Risk is like the shadow of the business, it is always there. By assessing the risk, it cannot assure that the risk can be controlled but it can be mitigated. (2/2)

Reference:
Chambers, A. & Rand, G. (2010). The Operational Auditing Handbook: Auditing Business and IT Processes. John Wiley & Sons, Ltd. ISBN 978-0-470-74476-5. p.52

Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. CRC Press Taylor & Francis Group. pp. 64-65

Maria Eloisa A. Ramos
2019-101335
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Batulan, AnnaNovember 4, 2021 at 6:26 AM
Risk is the chance or probability of experiencing some type of harm if exposed to a hazard. Risk factors are variables (natural, human, mechanical, technological, and logistics) to help identify and asses the risk associated that may harm the efficiency and effectiveness of an organization and in some cases the adverse effect of outcome may also happen. Risk can involve a large degree of control and has little or no control at all.

For me, we can apply the risk concept by applying, for instance, the risk assessment of Murdock (2017) to produce a business strategy that is in line within the organization. It has the process of identifying, measuring and analyzing these risks that are relevant to an activity, project or business function of an organization. The process of identifying risk, it could be from external or internal factors like risk types based on nature such as capacity risks, strategic risks, compliance risks, natural environmental risks, and political risks. Then, we are measuring the risk whether it is low, moderate, or high for us to easily compare risks on a variety of levels and observe the decreases or improvements in their overall conditions or specific issue areas. Lastly, we analyze the risk on how we can solve and address the risk as best as possible and how it can affect our decision making.

References:
Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World (Internal Audit and IT Audit) (1st ed.). Auerbach Publications.

BATULAN, Anna Marie M. 2019-102079 CBET-01-503A
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Ela Rain TalabongNovember 4, 2021 at 7:12 AM
(1/2)

Risks are always been there with every step taken by businesses and even the entities with strong foundations and flourishing paths have weak spots too. As Keeland (2016) quoted, “But tough had its limits. Even a diamond, if you hit it at the exact right place, the spot where it was flawed and weak, would sometimes shatter.” The vulnerable parts of different processes, operations, plans, and departments in the business are always been the easiest to be damaged and destroyed by different risk factors that a business might encounter.

Business risks have two types: inherent risks and controllable risks. By identifying these two, it will be easier for businesses to cope and create their counter-plans against these risks so that they would not be much affected by them. When the business identified which of the business risks they have are the inherent risks, they could formulate the proper plan to lessen its effects on the business as inherent risks are risks that cannot be avoided. On the other hand, if they identified controllable risks, they could easily formulate steps to take to avoid them and if the opportunity came, they could turn it to their advantage.

TALABONG, ELA RAIN F.
2019-102788
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Ela Rain TalabongNovember 4, 2021 at 7:17 AM
(2/2)

Moreover, when a business properly identified its risks, measuring its effects and formulating the solutions for it can be conveniently done by the business with consideration for every factor it affects and will be affected. This will help the business practices of the entities adapt to these risks, toughen up their systems, and have integrated plans for them to have a promising future.

Everything in the business is risks taken by its owners and as Nixon (n.d.) noted, “If you take no risks, you will suffer no defeats, but if you take no risks, you win no victories.” Businesses are gambles and in every risk they take, the road is only either failure or success, but with the businesses knowing what risks to take and to avoid, success will come easier.

References:

Keeland, V. (2016). The Baller (Kindle Edition). https://www.wisefamousquotes.com/vi-keeland-quotes/but-tough-had-its-limits-even-a-diamond-498088/

Murdock, H. (2016). Operational Auditing: Principles and Techniques for a Changing World (1st ed.). Auerbach Publications. https://doi.org/10.1201/9781315368733

Richard M. Nixon Quotes. (n.d.). BrainyQuote.com. Retrieved October 27, 2021, from BrainyQuote.com Web site: https://www.brainyquote.com/quotes/richard_m_nixon_386545

TALABONG, ELA RAIN F.
2019-102788
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Anthony "Baks" MangilogNovember 4, 2021 at 7:25 AM
According to Investopedia, the risk is defined as the possibility that an outcome or investment’s actual gains will differ from the projected outcome or return. Every person is exposed to risk daily - whether while driving, going down the street, investing, capital planning, or doing something else. Risks are something that someone should be aware of; not because it does not affect an individual or business now does not mean it will not affect their future decisions. That is why I believe prevention is better than cure. Identifying risks and adequately assessing them would help the company or a business to control them or avoid encountering a bigger problem in the near future.

There are two significant risks that we have been discussed in our last discussion. The first one is the inherent risk, which exists even though the business is not even started. Then the other risk is controllable; it is a risk that can be controlled by applying proper control.

Risk assessment, according to Murdock, is the act of identifying, measuring, and analyzing the potential risks with the program or process. It is a systematic, continuous process that incorporates quantitative and qualitative inputs and factors. Additionally, it is determined by the review’s timeline. To identify risk, one may gather and discuss first the possibility of the risks to occur. It can be identified by reviewing the nature of the business. Then we measure the risks on how it impacts the company or a business. Then lastly, analyze the potential harm that can be brought to the company. By saying so, properly addressing the risks and tackling them will help the company avoid occurring them. It also will help the company to come up with a proper solution for it.

References:
Risk. (2020, October 6). Investopedia. Retrieved November 1, 2021, from https://www.investopedia.com/terms/r/risk.asp

What is Risk? Definition of Risk, Risk Meaning. (n.d.). The Economic Times. Retrieved November 1, 2021, from https://economictimes.indiatimes.com/definition/risk

Murdock, H. (2016). Operational Auditing: Principles and Techniques for a Changing World (Internal Audit and IT Audit) (1st ed.) [E-book]. Auerbach Publications.

Mangilog, Anthony C.
2019-104415

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UnknownNovember 4, 2021 at 7:57 AM
AGULLO, JAMAICA MAE A.
2019-105485

Business Risks are inevitable circumstances that a business may encounter. It is intangible, may comes in different natures, sizes, and effects. These are important points regarding different kind of risks such as capacity, strategic, compliance, natural environment and political. Through this, entities wil be able to know what to maximize and minimize to the operations of a business.

Risks associated to the operations of a business can be measured through high, moderate, and low intensity or this could be in a color chart such as green, yellow, and red which signifies the low, moderate, and high, respectively. This is under the risk management system as a process of identifying, assessing, and controlling the threats to an entity (Tucci, n.d.). The main objectives of risk management are to strengthen the risk avoidance and mitigation. It is a lenient action to prevent failure to act from the possible threats that might cause a business to an end.

Given the example of today's changing world, because of pandemic many businessess have to think of another way through their customers. Unless you have noticed, COVID-19 Pandemic does not only guaranteed one kind of risk but many more to get prepared for. Judging our current situation, in a business perspective, the global pandemic is a natural environmental risk's world wide. However, it associated the compliance and strategic risks along it's way. If a business has a handful of risks to handle, it demands an immediate action, therefore the risk is very high.

With the above example, the risk tolerance of a business is in danger. On the other hand, those businessess who have already established their customers online before the pandemic may now see their customers starting to try the product or services of a newly entered business in an online platform. This could be a strategic risk for the established online business because of competition and it could be treated as low or moderate level of risk.

Simply follow the 5 steps of risk assessment such as identify the potential risk, analyzing the risk, evaluating the risk, treating the risk, and monitoring and reviewing the risk (Horvath, 2021). These are procedures that can help the business through asking themselves the basic of 'what are the natures, sizes, and effects of these risks?' After identifying the nature, analyze the size like for example, use estimates to give yourself presentation of possible loss, and evaluate the impact through scale of low, moderate, or high.

The following are the basic ways to help the businessess improve their risk managements. These are key concept of risks that can be applied when doing risk assessment. Though, after all, risk is a choice it's up to an entity if they will take it as a threat or not. Unless, they don't want to end.

Tucci, L. (n.d.). What is risk management and why is it important? Search Compliance.

https://searchcompliance.techtarget.com/definition/risk-management

Horvath, I. (2021). Five Steps of Risk Management Process. IT Security and Governance.

https://www.invensislearning.com/blog/risk-management-process-steps/?amp
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Jan Lorraine RogelioNovember 4, 2021 at 8:01 AM
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Jan Lorraine RogelioNovember 4, 2021 at 8:04 AM
Financially, risks may be defined as a chance that the actual gain on investment will differ from what is expected (Chen, 2021). Risks, in simple terms, involve uncertainty and loss. It can take many forms, and operational risks are one of those. Operational risk, as defined by Morgan (2021), is the risk of losses caused by flawed or failed processes, policies, systems, or events that disrupt business operations. There are many factors that can trigger operational risks. They may be internal or external factors such as employee errors, regulatory compliance, etc. Risks can be mitigated or controlled through the application of risk management. Risk management is a concept whereby we understand and manage the risks that an entity will face or is currently facing, whether they like it or not, in their attempt to achieve their goals. It involves risks assessment in which we identify, analyze and evaluate risks.

Through proper risk assessment and management, entities would be able to be aware of the risks in their organization, be confident in their goals and objectives, be in compliance with the laws and other regulations, improve operations, safety and security for their consumers and employees, and be more competitive in the market. There are four strategies that management may use to deal with risks. First, the "no risk" strategy, which involves risk avoidance. Its goal is to eliminate the risks. The other strategies are focused on getting an acceptable risk. Risk reduction is a strategy to reduce risk to an acceptable level. Risk transfer, on the other hand, occurs when management contracts with an outside party to bear some or all of the cost of a risk that may or may not occur. The risk acceptance strategy is the inverse of risk avoidance in that the entity accepts its potential risk because the impact or harm that it will inflict on the organization is limited or the cost of mitigating it is greater than the damage (Tucci, 2021). Enterprise Risk Management (ERM) is an approach to risk in which the organization manages risks to know which risks are worth taking or the ones that, if taken, will be more beneficial to the achievement of its objectives. ERM is focused on positive risks, or those that, if taken, will either bring more value to the organization or damage it if taken. According to Valente (n.d), ERM views risks as a strategic enabler versus the cost of diing business.

References:
Chen, J. (2021, October 22). Risk. Investopedia. Retrieved November 4, 2021, from https://www.investopedia.com/terms/r/risk.asp.
Morgan, L. (2021, October 12). What is operational risk? definition from searchcompliance. SearchCompliance. Retrieved November 4, 2021, from https://searchcompliance.techtarget.com/definition/operational-risk%3famp=1.
Tucci, L. (2021, October 12). What is risk management and why is it important? SearchCompliance. Retrieved November 4, 2021, from https://searchcompliance.techtarget.com/definition/risk-management?_gl=1%2A1jp7gp4%2A_ga%2AUUphc0Vjdk1qVkcyT2tBU2xUaS1idFIyWWs5eTc0QUEyWjRPNkpQUjhhalJxUURxYnM4YjFxbDhPWGNKQmRlOA

Rogelio, Jan Lorraine M.
2019-105301
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Bernadeth DugayNovember 4, 2021 at 9:02 AM
The concept of risk is that risk would be based on a combination of an event's plausibility and its implications. As a result, a potentially hazardous event, the HAZARD, is only transmogrified into RISK if it occurs in a zone with living person, institutional, or ecologic Holdings and this zone has that risk. There are many or different ways on how this concept can be applied in bisunesses. Business or entrepreneurship entails a variety of risks. Some of these identified dangers have the potential to ruin a business, while others have the potential to be harmful that is both complex and expensive and time-consuming. Company must identify in what risks threaten to their operational processes. Location hazards also abuses among personnel, innovation risks like as power failures, and strategic risks such as investment in R&D are all potential threats. A risk management advisor can strongly advise a strategy that includes training sessions, regular inspections, machinery and area preservation, and any insurance policies that are required.
Prevention is the best plan against risk. An entity must make sure that there are workers training, proper background checks, safety checks, equipment and machinery maintenance, and obviously the proper maintenance of physical premises. These are the way on how we assess risk and how it will manage.

Concept of Risk (n,d) retrieved from https://www.coe.int/en/web/europarisks/concept-of-risk

Davis, Mark (2021) Identifying and Managing Business Risks; retrieved from https://www.investopedia.com/articles/financial-theory/09/risk-management-business.asp

-Dugay, Bernadeth B. (2019-103892)
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Iris IsipNovember 4, 2021 at 9:59 AM
In our life, there are a handful of moments where we ask ourselves, is it worth the risk? We look in various perspectives to evaluate which one can give a favorable outcome and have less chance of failing. Even knowing what could happen, we still encourage ourselves to do it and hope for the best. Risk, in a simple term, is the uncertainty or the probability of something wrong happening. A successful business is built upon numerous risks the owner took to reach the top. We should note that plans and strategies will not go as we have planned. It is inevitable, but with the proper assessment, we can face it head-on. First, we need to identify the sources of the problem from the external and internal of the organization because it is one of the significant influences in risks. After that, we should act hastily to stop the potential problem from developing into an actual one. This reasoning should apply to anything that can pose a threat to the company in achieving its goals. We should also let the employees get involved in resolving a risk, so they know what to do when they recognize one.
An example would be setting up a business in a new location. There is a possibility that consumers within the area might not like it for different reasons, such as it is against their religion or culture. Another type of risk in a business is when a bank gives a loan to a new business. The company's value is not equal to the loan they are asking for, but if they give documents that show proof they are taking up a big project, the bank might risk giving them a loan. The higher the risk we take, the better the return because the bank can give them high interest.

Business risk. Corporate Finance Institute. (2020, February 24). Retrieved November 4, 2021, from https://corporatefinanceinstitute.com/resources/knowledge/finance/business-risk/.

ISIP, IRIS G.
2019-103614
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Shayne Danielle G. SamsonNovember 4, 2021 at 10:07 AM
Risks are like the moon in the sky; there are times that it is not visible but, it never goes away, just hiding and waiting for its time to reveal itself. We all know that as we make actions in life, we may encounter obstacles and risks unexpectedly. The same applies to operating a business, as opportunities and decisions taken are accompanied by threats and challenges. Business risk refers to a threat to the company’s ability to achieve its financial goals (CFI, 2019). These would be the times that some things did not go according to plan. And so, businesses should be prepared to overcome these and get back on track.

Facing risks is being brave, and planning an action to mitigate risks is being wise. The way to properly understand and respond to risks is to start from their roots, to identify the relevant risks and their nature. Risks come in different sources, internal or external, and types, like capacity, strategic, compliance, natural environment, political, the long list goes on. It is also not the same for different business processes, so operational auditors need to be familiar with the business activities. The identified risks are then measured. There is a certain limit of risks that the business could take, wherein the process could still go on even with the presence of it. Some risks would be too hazardous for the business process, so it needs an immediate response. Quite often, risks are measured using a three-point scale of high–medium–low (Murdock, 2016). With the nature and size of risks already taken into consideration, it would now be easy to come up with the right plan of action. Other options with less risk could be looked into and considered. It is the creation of a safe environment for the business. All in all, it is the process of risk assessment. It is one of the tools for the operations to continue and succeed as risks are always present in the business world.

References:

CFI. (2019). Business Risk - Overview, How to Identify, and How to Manage. Corporate Finance Institute. https://corporatefinanceinstitute.com/resources/knowledge/finance/business-risk/

Murdock, H. (2016). Operational Auditing (1st ed.). Auerbach Publications. https://doi.org/10.1201/9781315368733

SAMSON, SHAYNE DANIELLE G.
2019-102562
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Patrisha C. MarananNovember 4, 2021 at 11:47 AM
Starting a new business venture or operating a firm entails a particular risk. Corporate Finance Institute (2020) defines business risk as a threat to the company's ability to achieve its financial goals. In business, risk means that a company's or an organization's plans may not turn out as initially planned or that it may not meet its target or achieve its goals.

Risk is always present, but it is manageable. So, to prevent harmful events that can destroy and cause severe damage to the business, we must have a risk assessment. Murdock (2015) stated that risk assessment is the process of identifying, measuring, and analyzing risks relevant to a program or method. This assessment is systematic, iterative, and subject to both quantitative and qualitative inputs and factors. Furthermore, it is also dependent on the timeframe of the review. It is necessary to conduct appropriate and sufficient risk assessments to manage risk effectively. Once the threat is recognized, it is then easy to mitigate.

Risk management plans are an essential factor in mitigating business risks. Having effective risk management reduces both the probability of risk and its potential impact. It will enable the corporation to prepare for unforeseen events that may hinder progress and growth. Furthermore, it can improve in future commercial decision-making. It is critical to identify and comprehend early where and how one firm may be most vulnerable to such dangers.

References:
Corporate Finance Institute. (2020, February 24). Business Risk. Accessed November 4, 2021, from https://corporatefinanceinstitute.com/resources/knowledge/finance/business-risk/

Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing
World. CRC Press Taylor & Francis Group. (pp 63 – 82)

Corporate Finance Institute. (2021, April 26). Risk Management. Accessed November 4, 2021, from https://corporatefinanceinstitute.com/resources/knowledge/strategy/risk-management/

Tucci, L. (2021, October 12). What is risk management and why is it important? Accessed November 4, 2021, from https://searchcompliance.techtarget.com/definition/risk-management#:%7E:text=Risk%20management%20is%20the%20process,errors%2C%20accidents%20and%20natural%20disasters.

MARANAN, PATRISHA C., 2019-100624
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Christian CasalNovember 4, 2021 at 12:56 PM
A risk assessment is the process of finding, measuring, and analyzing a potential threat to one's safety. The process of identifying hazards that could impede a firm or organization from achieving its objectives is known as risk identification or risk assessment. Because if the risks that have been identified materialize, they will have a negative impact on the company's ability to achieve its ultimate goal, it is vital that they are identified. Risk measurement is a collection of statistical variables that are used to predict the volatility of a company's stock price. At work, risk measurement assists in quantifying the likelihood and possibility of a hazard or accident occurring. When it comes to estimating the impact of recognized hazards, risk measurement is a critical instrument to have in place. The use of statistical analysis is prevalent for evaluating the level of risk. It is possible to determine the possibility of an event occurring by performing risk analysis in a company. It assesses the unpredictability of prospective risks as well as how they might affect the organization. For the purpose of assessing risk, two approaches are available: quantitative and qualitative. The ability to analyze risk is crucial because it allows you to reduce the effect of any unfavourable outcomes that may result from unclear conditions. It aids the organization in planning for any changes that may come in the future. When utilizing a qualitative method to risk analysis, it is necessary to determine the likelihood of occurrence based on subjective features and rating scales in order to be effective. The potential risk is represented by a fixed value when the quantitative approach of risk analysis is used to conduct the analysis. Various company issues, such as employee health and safety, can benefit from the adoption of risk assessment techniques. First, determine whether or not the employee is in any risk. Certain employees may not be permitted to move heavy objects, which is a possibility. When you've recognized the hazard, you need to quantify it. Assess the likelihood that a threat may cause harm to the employee following that assessment.

Reference:

Davis (May 28, 2021). What is a risk assessment and why is it important? Retrieved October 28, 2021, from https://www.mvorganizing.org/what-is-a-risk-assessment-and-why-is-it-important/

CASAL, CHRISTIAN T.
2019-103830
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UnknownNovember 4, 2021 at 5:13 PM
Risk is defined as the probability of an event and its consequences. In business, it is anything that threatens a company’s ability to achieve its financial and operational goals. It means that a company’s or an organization’s plans may not turn out as originally planned or that it may not meet its target or achieve its goals. According to Murdock (2017), there are many types of risks ranging from strategic, operational, compliance, reporting, and IT related. Strategic risks are those risks associated with operating in a particular industry. It includes the risk arising from the changes among customers or in demand, industry, and research and development. Compliance risks are those associated with the need to comply with laws and regulations. Operational risks are associated with your business’ operational and administrative procedures. Financial risks are associated with the financial structure of your business, as well as the transactions your business makes. Lastly, IT risks are those risks associated with IT technologies and data protection. All of these risks need to undergo in risk assessment.

Risk assessment is the process of identifying, measuring, and analyzing risks relevant to a program or process. This assessment is systematic, iterative, and subject to both quantitative and qualitative inputs and factors (Murdock, 2017). By identifying those risks, you’re able to set up procedures and processes to avoid and/or mitigate the risk, minimize its impact, and help your business cope better. As an auditor, it helps you make better business decisions. It enables you to reduce the things that could have a negative effect on your business. Moreover, assessing those types of risks helps to provide a safe and secure environment not only for the employees, but also for the stakeholders of the business such as investors, lenders, customers, and the society.

REFERENCES:
Info Entrepreneurs. Manage Risk. Accessed October 30, 2021. https://m.infoentrepreneurs.org/en/guides/manage-risk/

Murdock, H. (2017). Operational Auditing Principles and Techniques for a Changing World. Taylor & Francis group.

StrategyDriven. (2019, April 09). The Importance of Risk Assessment in Business. Accessed October 30, 2021. https://www.strategydriven.com/2019/04/09/the-importance-of-risk-assessment-in-business/

HEDREYDA, HILARY N. (2019-103876)
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Dalmacion, Khyla Bernadette S.November 4, 2021 at 5:45 PM
Risk is the probability of an outcome having a negative effect on people, systems or assets. The combined impacts of hazards, the assets or persons exposed to hazard, and the vulnerability of those exposed elements are often portrayed as a function of risk. At the end of the day, risk is the product of our choices.

The process of discovering, assessing, and controlling threats to an organization’s capital and profitability is known as risk management. Financial uncertainties, legal liabilities, technology challenges, strategic management failures, accidents, and natural disasters are all potential causes of risk. A comprehensive risk management program allows a company to analyze all of the hazards that it confronts. Risk management also looks at the link between risks and the potential for them to have a cascade effect on an organization’s strategic goals.

Because of its emphasis on predicting and understanding risk across a company, this holistic approach to risk management is sometimes referred to as enterprise risk management. Enterprise risk management (ERM) highlights the necessity of managing positive risk in addition to focusing on internal and external threats. Positive risks are possibilities that, if seized, could boost a company’s value or, on the other hand, harm it if not taken. Indeed, the goal of any risk management program is to retain and add to corporate value by making informed risk decisions, not to remove all risk. Risk management jobs are quite fulfilling, owing to the fact that a risk expert serves a critical role in an organization. They are also well compensated financially. However, the task can be difficult, especially when the organization is dealing with volatile risk variables. Nonetheless, risk management is now one of the most well-respected jobs in businesses and organizations.

DALMACION, KHYLA BERNADETTE S.
2019-105708

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Capinlac Carl AngeloNovember 4, 2021 at 6:52 PM
In financial terms, risk is defined as the possibility that the real profits from an outcome or investment will differ from the expected outcome or return. The danger of losing some or all of one's initial investment is a risk. Risk is usually measured quantitatively by looking at past behaviors and consequences. Standard deviation is a risk indicator used frequently in finance. Standard deviation is a measure of asset price volatility in contrast to historical averages over a specific time period. Overall, understanding the fundamentals of risk and how it is measured makes it possible and smart to control investment risks. Learning about the risks that can arise in many settings, as well as some holistic approaches to managing them, will assist all sorts of investors and business managers in avoiding avoidable and costly losses. In general, there are two types of risk: systematic and unsystematic risk. The market unpredictability of an investment is known as systematic risk, and it refers to external factors that affect all (or many) enterprises in an industry or group. Unsystematic risk refers to asset-specific risks that can affect an investment's performance.The following is a list of the most essential forms of risk to consider while analyzing investment opportunities for a financial analyst:Systematic Risk – The market's total impact. Unsystematic Risk — Uncertainty about a specific asset or firm.Political/Regulatory Risk - The consequences of political actions and regulatory changes.Financial Risk - A company's capital structure (degree of financial leverage or debt burden). Changes in interest rates have an impact on interest rate risk. Uncertainties that are peculiar to a country are referred to as country risk. Changes in social norms, movements, and unrest have an impact on social risk. Uncertainty regarding environmental obligations or the impact of environmental changes is an example of environmental risk. Uncertainty about a company's operations, such as its supply chain and the delivery of its products or services, is known as operational risk. Management Risk - The influence of a management team's decisions on a corporation. Legal Risk - Uncertainty about lawsuits or operating freedom. And Competition - The level of competition in a certain industry and the impact that competitors' decisions will have on a business.

Chen, J. (2021, October 22). Risk. Investopedia. Retrieved November 2, 2021, from https://www.investopedia.com/terms/r/risk.asp.

Chen, J. (2021, October 22). What is systematic risk? Investopedia. Retrieved November 3, 2021, from https://www.investopedia.com/terms/s/systematicrisk.asp#:~:text=Systematic%20risk%20refers%20to%20the,a%20particular%20stock%20or%20industry.

Capinlac, Carl Angelo SJ
2019-102322
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UnknownNovember 4, 2021 at 7:27 PM
Risks can be applied in a variety of ways, such as deciding which career path to pursue, whether to invest in a company, purchase something, and so on. These risks are a part of our decision-making process, and we were exposed to a wide range of risks that could have a positive or negative impact on our lives. But what exactly is risk? The chance or probability that a person will be harmed or suffer an adverse effect if exposed to a hazard is referred to as risk. It may also apply to situations involving the loss of property or equipment, as well as negative environmental effects (CCOHS, 2021). Now that we know what risks are, we can assess whether the risks we are encountering have a significant impact or not. However, one of the most difficult decisions to make when confronted with a risk is deciding what to do about it, and many of us have struggled with deciding which risks to take and which to ignore.

Let's take a look at the risks that many businesses have been facing in today's changing and competitive operational environment. Keep in mind that business operations aren't always simple and error-free; each business is unique in terms of industry, activity, location, and organization size. While a risk can have a negative impact on an organization's relationship with its stakeholders, if handled properly, it can also lead to a new opportunity. Financial resources, tangible assets, public image, and the health and safety of both employees and customers are examples of these risks that can be applied to business practice. These risks must be assessed, which is why risk assessments are used. Risk assessment is the process of identifying, measuring, and assessing risks that are important to a program or process (Murdock, 2017). Risk assessments begin with identifying potential hazards, researching them to see what might happen if they occur, treating risk conditions, monitoring results, and making adjustments as needed. To perform risk assessment, management must look both in the past and in the future.

If risks are effectively managed, it can provide several benefits that can have a positive impact on capital and profitability of a company. Every business must be adaptable and resilient. Anticipating negative outcomes is essential for success. Failure to accept and comprehend risks in industry, technology, products, expanding markets, and social dynamics can lead to complications.

References:

Canadian Centre for Occupational Health & Safety (2021). What is the risk? https://www.ccohs.ca/oshanswers/hsprograms/hazard_risk.html

Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. CRC Press Taylor & Francis Group.

ALCANTARA, SHIELA MAE D.
2019-103506
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Catherine BulingNovember 4, 2021 at 8:05 PM
People are exposed to a wide range of risks throughout their lives. In the field of auditing, risk plays a significant role. Risk is something that may affect the business. It is referred to as the combination of likelihood and consequence. There is always a risk in a business organization. When dealing with a risk, one of the most difficult decisions to make is what to do about it. Some of the many responsibilities of an auditor is to assess, identify and measure risk before they even affect the company or business.

Operating a business may involve numerous challenges, including strategic market risks, IT risks, operational risks, financial risks, legal risks, and capital risks. Internal auditors must be aware of significant risks that could adversely influence a company's objectives. According to Charles Hall, risk assessment creates efficiency.
Risk assessment enables us to identify, analyze and measure risks that may affect the business success. An external audit risk assessment, for example, is a necessary process in financial audits to identify areas where fraud or errors could occur. In addition, performing a risk assessment will assist you in identifying the risks that need to be addressed first. Risk management, on the other hand, is important for a company to identify its objectives in the future. The company needs to consider risk before defining its objectives. Risk management will help the company in prioritizing risk that needs to be handled first and how will the company respond to it. Managing and assessing risk will allow businesses to make more confident business decisions in the future.

Reference:

Hall, C. (2021, October 12). Audit risk assessment: The why and the how. CPA Hall Talk. Retrieved November 4, 2021, from https://cpahalltalk.com/audit-risk-assessment/.

BULING, CATHERINE (2019-103626)
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AnonymousNovember 4, 2021 at 8:20 PM
A company's or organization's exposure to aspects that will reduce profits or cause it to fail is referred to as business risk. A business risk is anything that jeopardizes a company's ability to meet its financial objectives. There are numerous factors that can come together to create business risk. Audit risk is the potential that financial statements are substantially inaccurate, even if the auditor's report states that there are no material misstatements. Audit risk is essential to the assessment process because auditors cannot and will not attempt to verify all transactions. It would be difficult to check all of these transactions, and nobody would be willing and able to pay the auditors to do so, emphasizing the importance of the comprehensive risk management strategy to auditing.
According to Harvey S. (2020), A risk assessment is a critical component of any organization’s infrastructure as they help to create an awareness of risk. It is critical to accomplish a risk assessment because most data security frameworks require it. By conducting formal risk assessments on a regular basis, you can gain a clear portrayal of where your investments are and what possible risks may exist. The goal of risk assessment is to identify elevated situations and develop preparedness and protection strategy to minimize the risks that may occur.
Audit risk | ACCA Qualification | Students | ACCA Global. (n.d.). ACCA. Retrieved November 5, 2021, from https://www.accaglobal.com/gb/en/student/exam-support-resources/fundamentals-exams-study-resources/f8/technical-articles/audit-risk.html
Harvey, S. (2020, September 25). https://kirkpatrickprice.com/blog/. KirkpatrickPrice Home. Retrieved November 5, 2021, from https://kirkpatrickprice.com/blog/how-a-risk-assessment-can-save-your-business/

SALVO, MARY ROSE E. 2019-102485
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Darlene PalacioNovember 4, 2021 at 10:01 PM
Risk is defined as an event having adverse impact on profitability and/or reputation due to several distinct source of uncertainty. It is associated with every business activity and are ascertainable, although not always quantifiable (Pallavi, n.d.). The biggest source of uncertainty in any firm is risk. Thus, businesses are increasingly focusing on detecting and controlling risks before they have an effect on the organization. Risks can be internal and external to your business and can also directly or indirectly affect your business's ability to operate. It can be hazard-based (e.g. chemical spills), uncertainty-based (e.g. natural disasters) or associated with opportunities (e.g. taking them up or ignoring them) (Queensland Government, n.d.). In general, business risk cannot be completely avoided because it is unpredictable. However, there are ways to reduce the overall risks associated with running a business; most businesses do so by implementing a risk management strategy.

According to United Nations Economic Commission for Europe (UNECE), risk management is an organizational model aimed at developing the quality of management processes… and it doesn’t overlap with other internal controls because it represents a different perspective that cuts across planning and control, performance evaluation system, audit, quality and so on. Therefore, it helps the organizations bring about a higher level of quality of services and products because it supports the decision-making processes, preparing for the difficulties that could hinder the achievement of the strategic goals.

This concept is applied in business operations through following the risk management discipline that has published by the International Organization for Standardization known as ISO 31000 standard, Risk Management-Guidelines. These are the steps of risk management process and can be used by any type of entity: (a) risk identification, (b) risk analysis, (c) risk evaluation, (d) risk treatment (e) monitoring and review and (f) recording and reporting (International Organization for Standardization , 2018). Furthermore, establishing a firm risk management policy would instill a sense of accountability and dedication among board members, top managers, departments, and staffs.

References:
International Organization for Standardization . (2018). ISO 31000:2018 Risk management — Guidelines. Retrieved from iso.org: https://www.iso.org/obp/ui/#iso:std:iso:31000:ed-2:v1:en
Pallavi, K. (n.d.). Risk: Meaning, Concept and Characteristics. Retrieved November 5, 2021, from https://www.yourarticlelibrary.com/: https://www.yourarticlelibrary.com/business/risk-management/risk-meaning-concept-and-characteristics/89506
Queensland Government. (n.d.). Identifying business risk. Retrieved November 5, 2021, from business.qld.gov.au: https://www.business.qld.gov.au/running-business/protecting-business/risk-management/identifying-risk#:~:text=Risks%20can%20be%20internal%20and,them%20up%20or%20ignoring%20them).
United Nations Economic Commission for Europe. (n.d.). Module 1: Concept of Risk. Retrieved November 5, 2021, from statswiki.unece.org: https://statswiki.unece.org/download/attachments/170787235/UNECE%20DOR%20RM%20Module%201%20Concept%20of%20Risk.pdf?version=1&modificationDate=1542635305140&api=v2

-Palacio, Darlene L. (2019-103509)
CBET 01-503A
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UnknownNovember 4, 2021 at 10:56 PM
To form an appropriate basis for expressing an opinion on the financial statements, the auditor must plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement due to error or fraud. Reasonable assurance is obtained by reducing audit risk to an appropriately low level through applying due professional care, including obtaining sufficient appropriate audit evidence. When the auditor is performing an integrated audit of financial statements and internal control over financial reporting, the requirements in AS 2201, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements, also apply. However, the risks of material misstatement of the financial statements are the same for both the audit of financial statements and the audit of internal control over financial reporting. (PCAOB Release No. 2010-004, 2010). Applying risk control in your daily life can be a big help in advancing in your own career at the same time knowing when its crucial to take advances. It can also be a big help in applying risk in business practices to assess to problems they have to face. By knowing the risk, the business operation can identify and measure its impact to the business and will resolve it quickly.

PCAOB Release No. 2010-004. 2010. AS 1101: Audit Risk. https://pcaobus.org/oversight/standards/auditing-standards/details/AS1101.

HABON, ASHLEY P (2019-102695) CBET-01-501A
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Jun Roi RoseteNovember 4, 2021 at 10:57 PM
We are encountering risk each and every day in our lives. It is often the possibility of something bad happening or is the probability that actual results will differ from expected results. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property the environment), often focusing on negative, undesirable consequences. Risk is assessed by considering historical behaviors and outcomes
The concept of risk is applied to business because organizations make countless economic assessments which will determine their existing and upcoming financial standing. According to Murdock, some internal auditors miss to recognize appropriate risks due to their inadequate knowledge about the audit process. Through this, the significance of auditors is highlighted because of doing research about the risk and planning about it in order to become knowledgeable over the activities involved. This process is called risk assessment which is the identification, measurement, and analysis of the risks inherent and controllable significant to certain activity.
Risks, even though it might seem frightening, can lead you to positive results too. Risks do not always mean an undesirable impact because it is an event with an uncertain outcome. Many people know the saying” Higher risk is associated with greater probability of higher return and lower risk with a greater probability of smaller return. “If a business is willing to take on a risk and make for it successfully, it can turn the tables around and provide a lot of opportunities. It is true that operation of business requires a lot of risk assessment.

Murdock, H. (2016). Operational Auditing: Principles and Techniques for a Changing World (Internal Audit and IT Audit) (1st ed.). Auerbach Publications.
Risk. (2020, October 6). Investopedia. https://www.investopedia.com/terms/r/risk.aspWikipedia
contributors. (2021, October 18). Risk. Wikipedia. https://en.wikipedia.org/wiki/Risk

Rosete, Jun Roi S.
2019-106001
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UnknownNovember 4, 2021 at 11:30 PM
In our daily lives, we are bound to take risks in order to experience new learnings and test our limits. In that way, it can help us grow and can be our stepping stone towards greatness and success. Risk entails uncertainties, possibilities, hazards, danger, or success. Most of the successful business stories begins with risking. Risk is a part of getting a business done. A successful risk assessment helps you to align your goals and visions in your company. Identifying internal and external systems that are critical to the operation of your whole business is important in risk assessment. It helps to maintain balance in productivity, reduces costs, and provides appropriate decision-making. There are many factors that can converge to create business risk. It is anything that is a potential threat to achieve the financial goals and visions of a business entity. (Kenton, 2020). As the business risk increases, the ability to provide adequate returns to investors may be affected. There are numerable ways to identify, assess, and minimize potential threats to the company. It can be managed through acceptance, reduction, revision, or elimination of strategies. It is important to include identifying of risk as part of business planning in that way it can help to comprehensively analyze the activities. Some businesses seeks help to risk management consultant in terms of safety checks and maintenance policies. In addition to, a stringent accounting procedures may also discover fraud and misstatements. A thorough background check to the future and existing employees may be needed to eliminate the risk of common crimes such as theft and fraudulent acts. This will help to prevent loss and promote productivity by ensuring a safe workplace. Prevention of risk is acquired through safety checks, employee training, daily maintenance, and others. Identifying and measuring of risks in a business is a worthwhile step since it avoids future conflicts, costs and energy. There are ways to ensure, prevent, and minimize the damage; the challenge is to know the suitable policies for a more effective business operation.

Reference:
Kenton, W. (2020). What is Business Risk? Retrieved from https://www.investopedia.com/terms/b/businessrisk.asp

Zarain, Kianna Erika D.
2019-104924
CBET-01-502A
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Leila Lauren CarlosNovember 4, 2021 at 11:42 PM
As per the International Organization for Standardization (ISO), risk can be defined as a combination of the probability of an event and its consequences; a probability than an accidental phenomenon produces in a given point of the effects of a given potential gravity during one period. To simplify, risk refers to the likelihood of anything unpleasant occurring. Risk refers to uncertainty regarding an activity's effects/implications on something that humans value (such as health, well-being, wealth, property, or the environment), with a concentration on negative, unwanted outcomes.
When it comes to business, risk is inevitable. And sometimes those risks are unmanageable—or worse, disastrous that could lead to business’ bankruptcy. That is the reason why accountants, specifically auditors are essential to an organization. Their job is a vital and crucial one since they are the ones to check and see possible occurrence of risks and prevent it from happening as soon as possible.
There are various ways which we can apply to a business practice in order to prevent or better, eliminate risks. First would be the proper risk management which can be done through systematically identifying the risks that your business actions pose, and then assessing the chance of an event occurring in order to properly comprehend how to respond to these risks. After that, we must put in place procedures to deal with the repercussions, and ultimately, we must assess the success of your risk management strategies and controls. As a result, decision-making will be efficient and effective, we will be able to prioritize and allocate our capital and resources more accurately; it will also allow us to anticipate what may go wrong to minimize the amount of firefighting we have to do or, in a worst-case scenario, to prevent a disaster or serious financial loss.
When a company decides to try something new, such as launching a new product or entering new markets, risk management becomes even more critical. Competitors following it into these markets, or technological advancements rendering the product obsolete, are two dangers to consider in these situations.

Reference:
Council of Europe Portal (2021). Concept of Risk. Retrieved November 05, 2021. https://www.coe.int/en/web/europarisks/concept-of-risk

-Carlos, Leila Lauren M. [2019-101650]
CBET 01-503A
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Carandang, CelineNovember 5, 2021 at 12:54 AM
Risk is an uncertain situation that may bring undesirable outcomes. Taking risk is making a choice or decision even if the result is uncertain. In operations, there are also different types of risks that the business encounters such as capacity risks, strategic risks, compliance risks, natural environmental risks, and political risks. Also, there is a risk-based audit where internal auditors assess the risks that are existing and the risks that the entity’s operations have. Evaluating the risks if they are immaterial or if they are high-risk that can really affect the activities of the company.

We all know that it is important for the business to determine which risks are present because they may greatly affect the business and its operations in a way that the risk is greater than the return. To determine and manage the risks then they should undergo risk assessment. Risk Assessment is the process of identifying the nature of risks, measuring the size of risks, and analyzing the effects of risks. These steps should be done to properly manage the risks and to know their source if it is internal or external, and to know how it can greatly affect the business to eradicate them immediately which may prevent losses. There is also a risk management process according to International Organization for Standardization. The five steps are (1) Identify the risk, knowing what kind of risk it is, it may be an inherent or controllable risk. (2) Analyze the likelihood and impact of each one, they should know if it is a high-risk, low-risk or if it is a risk that may impact the whole company and make a disaster. (3) Prioritize risks based on business objectives, they should decide which type of risk they are giving attention to because it should be aligned to the goals of the business, that if the risk is from the department that will not affect the operations as well as the whole company then prioritize managing other risks. (4) Treat the risk conditions and (5) Monitor results and adjust as necessary.

Therefore, risk assessment and management are really important for a business to conduct because it helps them to be aware of those risks that can highly affect the operations and be a threat to the company’s ability to achieve its objectives.

References:
Accounting Made Easy. (2021, October 24). Risk Assessment Part 1 (in Filipino). [Video]. YouTube. https://www.youtube.com/watch?v=lk3l3MOYcl0

Murdock, H. (2016). Operational Auditing: The Principles Techniques for a Changing World (1st ed.). Auerbach Publications. https://doi.org/10.1201/9781315368733

Tucci, L. (2021, October). What is risk management and why is it important? TechTarget. https://searchcompliance.techtarget.com/definition/risk-management

-Carandang, Celine D. (2019-104928)
CBET-01-502A
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Arabit, Princess MaeNovember 5, 2021 at 1:20 AM
To begin, let us define risk in the context of a business. Business risk is the possibility of loss associated with a company. Risks surround everything a business, large or small, does (Spacey, 2016). As a result, it is common for businesses to identify risks regularly to avoid or mitigate future losses. As we can see, there are unavoidable risks in business, whether they are inherent, controllable, or significant; however, we can mitigate these risks through various risk assessments.

Risk Assessment is a process of identifying, measuring, and analyzing risks relevant to a program or process (Murdok, 2015). While businesses cannot wholly avoid business risk, they can take steps to mitigate its impact, such as developing a strategic risk plan.
Doing a product over the maximum amount in a typical operation, the business not following the trend or being open to innovation, some fortuitous events, and many more are examples of risk situations. The role of an internal auditor comes into play when defining or locating those other risks. An internal auditor is well-versed in risk-mitigation techniques. The first step is to identify the risks, measure the impact and likelihood of the risks occurring, and become familiar with the client so that it is easy to state the occurrences or findings and ultimately identify the mistake or error.

Hence, encountering the risks mentioned above can be dealt with appropriately. We must determine the nature of the threat, whether it is internal or external. It's a good idea to understand the various types of risks that the business may face so that the industry can recognize and plan before the risks happen.

References:
Spacey, J. (2016). What is Business Risk? Simplicable. https://simplicable.com/new/business-risk-definition

Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World. CRC Press Taylor & Francis Group.

-Arabit, Princess Mae D. (2019-103719)

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Connard LandarNovember 5, 2021 at 1:31 AM
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Connard LandarNovember 5, 2021 at 1:33 AM
According to Canadian Centre for Occupational Health and Safety, in general, risk is the chance or probability that a person will be harmed or experience an adverse health effect if exposed to a hazard.
On the other hand, in the context of business, risk is the exposure a company or organization has to factor that will lower its profits or lead it to fail. Anything that threatens a company's ability to achieve its financial goals is considered a business risk. There are many factors that can converge to create business 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.
However, sometimes the cause of risk is external to a company. It may be inherent to the environment or it may be controlled by the entity. Undoubtedly, any type of business is expose to different type of risk. However, there are ways to mitigate the overall risks associated with operating a business; most companies accomplish this through adopting a risk management strategy.
When a company experiences a high degree of business risk, it may impair its ability to provide investors and stakeholders with adequate returns. For instance, the internal management of a company may make certain system that affect its profits, or the owner of the entity may not accurately anticipate certain events in the future, causing the business to incur losses or fail.
Business risk is influenced by a number of different factors including: Consumer preferences, demand, and sales volumes, Per-unit price and input costs, Competition, The overall economic climate, and Government regulations. These factors have an important role why the business will be expose to many types of risks. From those factors presented above, the entity may assess what type of risk occurs in the internal systems. As a result, the management can create entity-level controls, risk assessment and management, and internal procedures to mitigate future risks.
References:
• Kenton, W. (2020). Business Risk. Investopedia. Retrieved November 5, 2021 https://www.investopedia.com/terms/b/businessrisk.asp
• Hazard and Risk. (n.d). Canadian Centre for Occupational Health and Safety. Retrieved November 5, 2021 https://www.ccohs.ca/oshanswers/hsprograms/hazard_risk.html

-Landar, Connard B. (2019-105059)
CBET-01-502A
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Rhea Mae YugaNovember 5, 2021 at 2:25 AM
According to Chen (2020), based on financial terms, risk is the chance that an outcome or investment’s actual gains will differ from an expected outcome or return. As an accountancy student, we were designed to put into practice the concept of the higher the risk, the higher the return. Taking on some risk is the result of achieving return, therefore, if you desire high returns, you cannot avoid all the risk involved. This concept is widely used in investment. It is also known for risk-return trade-off. Like in investment starting and running a business comes with many types of risk. Some of these can cause serious damage that is costly and time-consuming to repair while others can potentially destroy the business. Risk is a threat to the company’s ability to achieve its financial goal. It also means that a company’s or an organization’s plan may not turn out as originally planned or that it may not meet its target or achieve its goals. As for Bill Gates an American business magnate, software developer, investor, author, and philanthropist, “Business is a money game with few rules and a lot of risk.” Taking the risk is a part of business process as it maintains the competencies of business internally and externally. You can’t run the business by simply staying at your comfort zone. It is a money game that every businessman should consider. The best insurance against risk is prevention. It includes training of employees, background checks, and equipment and physical premises maintenance are all crucial risk management strategies for any business.

References:
Business Risk a Threat to the Company’s Ability to Achieve its Financial Goals. (n.d.). Corporate Financial
Institute. Retrieved October 28, 2021 from https://corporatefinanceinstitute.com/resources/knowledge/finance/business-risk/
Chen, J. (2020, October 06). Risk. Investopedia. https://www.investopedia.com/terms/r/risk.asp
Perez, Y. (2021, May 09). Identifying and Managing Business Risk. Investopedia.
https://www.investopedia.com/articles/financial-theory/09/risk-management-business.asp

Yuga, Rhea Mae D. (2019-103574)
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Lovely BangateNovember 5, 2021 at 3:33 AM
Problems in life are inevitable. These problems make us vulnerable that can lead us to countless failures yet, these make us resilient and adaptable individuals. Just like our life, business is consistently associated with risks. By definition, the risk is the probability of an outcome having a negative effect on people, systems, or assets. Risk is depicted as being a function of the combined effects of hazards, the assets or people exposed to the hazard, and the vulnerability of those exposed elements. (UNDRR, n.d.) Commonly, people perceive risk as an adverse condition however, we can view it with a double-sided idea of bad things and good things that can impact the realization of organizational goals. The notable application of this connotation would be the risk of integrating technological advancement in the manual-labor garment industry. These risks may include personnel safety, the high cost of acquiring and maintaining technology, increased risk of job cuts, and operation disturbance because of machine malfunctions, to name a few. Generally, without taking these risks, the company will lose its opportunity to maximize its income and transcend market competition by improving its operational process and equipment. Therefore, the risk is an essential element for business growth and this risk must be managed accordingly to mitigate its unfavorable outcome to the company. Be mindful that risk cannot be avoided, at best, it can only be managed and mitigated. And this is where the role of risk management comes into the picture.

Variously, there is a proverb saying, “a chain is only as strong as its weakest link.” It tells only that all things have their weakest parts which are open for assessment and improvement. It deals with the idea that the weakest is the most vulnerable to risks. This only means that the organizations, programs, processes, and even departments are vulnerable because the weakest element can always damage, break, or adversely affect the outcome. (Murdock, 2016). We can depict that the auditor must focus on what the client lacks to generate necessary support for its survival. For instance, the auditor should identify related threats and assess their severity and the likelihood of occurrence in the organization through the use of statistics and risk assessment tools. It is followed by implementing appropriate risk treatment policies, monitoring the response of the client, recording, and reporting the outcome. By doing these processes, the benefits acquired because of the presence of risk management can outweigh the cost of doing business and its related risk.

In conclusion, risk management protects business welfare by focusing on the weaknesses and encouraging them to become proactive planners. In addition, it contributes to the management and stockholders making sound decisions to leverage opportunities and minimize probable loss. It proves to us that risk does matter and requires urgent attention. All we can do is recognize its existence and think critically, innovatively, and creatively as a response to prepare for its occurrence.

References:
UNDRR. (n.d.). Understanding risk. Retrieved November 05, 2021 from https://www.undrr.org/building-risk-knowledge/understanding-risk

Murdock, H. (2016). Operational auditing: Principles and techniques for a changing world (Internal Audit and IT Audit) (1st ed.). Auerbach Publications.

BANGATE,LOVELY V. (2019-104176)

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AnonymousNovember 5, 2021 at 3:45 AM
In general, risk implies future uncertainty about expected outcome that will most likely have a negative impact to something it is related to. There are many types of risks, ranging from strategic operational, compliance, reporting, and IT related. In business, risk management focuses on identifying what could go wrong, evaluating which risks should be dealt with and implementing strategies to deal with those risks. Businesses that have identified the risks will be better prepared and have a more cost-effective way of dealing with them.

According to Murdock, operational changes, such as technological advances, globalization, outsourcing, complexities in financial markets, and demographic shifts, have all exposed organizations to a set of risk dynamics that require creativity and constant vigilance. Manual controls and procedures have limited value in an environment where conditions can change rapidly, and the relentless expectation of lower costs and higher quality require automation, speed, and accuracy.

The concept of risk is applied in different areas of business practice such as in management investing strategies and audit of a firm. For instance, the use of Risk-based approach technique in auditing whereas auditors focus on analyzing and managing different types of risks that could lead to material misstatement. Risk-based audit approach not only helps auditors to manage and minimize the audit risk, but it also helps to reduce audit work on some levels while maintaining the audit quality. This is due to in this approach, auditors need to focus on the risky areas that could lead to material misstatement only. Hence, they don’t need to spend much time on the low-risk areas; and their audit objectives can still be met.

The use of risk assessment sets out how to identify the risks that a business may encounter. It also looks at how to implement an effective risk management policy and program which can increase the business' chances of success and reduce the possibility of failure. Risk management will be even more effective if there’s a clearly assigned responsibility to chosen employees. A good risk management can improve the quality and returns of your business

References:
Accounting Guide (n.d.) Risk-Based Approach in Audit. https://accountinguide.com/risk-based-approach-in-audit/

Info Entrepreneurs. (n.d.) Manage Risk. https://www.infoentrepreneurs.org/en/guides/manage-risk/

Murdock, H. (2017). Operational Auditing (pp. 63-64) [eBook edition]. CRC Press.

MORENO, GLORENE MAE R. (2019-105014)
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Patricia Lynn D. GuamosNovember 5, 2021 at 3:47 AM
The International Organization for Standardization (ISO) defines risk as a "combination of the likelihood of an event and its effects." As a result, a potentially harmful occurrence, the hazard, is only converted into risk if it occurs in a zone with human, economic, or environmental stakes, and this zone has a specific degree of vulnerability. The risk in finance is the probability that the real profits from a result or investment will differ from the projected outcome or return. The risk includes the possibility of losing some or all of the initial investment. Risk is frequently measured by considering prior behaviors and consequences. Risk management is the practice of controlling hazards using procedures, methods, and instruments. Risk management focuses on detecting what may go wrong, deciding which risks should be addressed, and putting measures in place to address those risks. A risk management process entails methodically identifying the risks associated with your business activities, assessing the likelihood of an event occurring, understanding how to respond to these events, implementing systems to deal with the consequences, and monitoring the effectiveness of your risk management approaches and controls. Overall, grasping the principles of risk and quantifying it allows you to control investing hazards. Learning about the risks that may develop in various situations and how to handle them completely will help all types of investors and business owners avoid unnecessary and costly losses.

Manage Risk Info Entrepreneurs. Chamber of Commerce of Metropolitan Montreal. Time Retrieved 12:32PM
https://www.infoentrepreneurs.org/en/guides/manage-risk/

GUAMOS, PATRICIA LYNN D. 2019-103828

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Lexter M. TandayuNovember 5, 2021 at 4:56 AM
The term risk is used in a variety of context and has varying definitions depending on the field and setting. Common to most definitions of risk is uncertainty and undesirable outcomes. According to business dictionary, risk is "a probability or threat of damage, injury, loss, or any other negative occurrence that is caused by external or internal vulnerabilities, and that may be avoided through preemptive action." In other words, risks are the factors that affects the outcome of something that entails negative result. In the context of business, risks are factors that prevents businesses to attain its objectives. That's why businesses and organizations implement risk assessment and risk management.

Risk assessment defined by (Murdock, 2017) is the process of identifying, measuring, and analyzing risks relevant to a program or process. It is systematic, iterative, and is subject to both quantitative and qualitative inputs and factors. Furthermore, it is also dependent on the timeframe of the review (p. 64). The first step is identification of risk, this is the process where all relevant and possible risk that exist in the organization will be known. And after risks are being identified, the next step is measuring these risks. In this process risks are being measure according to its impact and likelihood in the organization. This is to know how high or low the impact of existing risk, this is where also the organization set priorities in mitigating risks. And the last step is analyzing these risks, this is where the consequences of these risks being looked over. On the other hand, risk management is also a process of identifying, assessing and controlling of risk. This is where such controls are being implemented in the organization to mitigate the risks that exist within. However, some are confused with risk assessment and risk management, as stated by (Murdock, 2017), risk assessment is a complex activity and it is a process, which means it is dynamic (p. 70).

In general, risks affect organizations in many ways and can cause damage in terms of business performance, reputation, environmental impact, and stakeholder safety, among others. Thus, it is critical to identify, assess and manage risks effectively (Murdock, 2017, p. 135). Risks is inevitable in every businesses and organizations, hence adapting and implementing of such controls is necessary to mitigate these risks and help the organization to achieve its objectives.

References:

Murdock, H. (2017). Operational Auditing Principles and Techniques for a Changing World. CRC Press Taylor & Francis Group. pp. 64 – 135

T Morphy. (n. d.). What is a Risk? 10 definitions from different industries and standards. Retrieved November 05, 2021, from https://www.stakeholdermap.com/risk/risk-definition.html

Tandayu, Lexter M. (2019-106755)
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Charlotte GestaNovember 5, 2021 at 5:42 AM
In everyday life, everyone has exposure to risks. It may be the risk of being involved in an accident while traveling to school or the risk of getting the COVID virus when going out during this pandemic. In a simple definition, a risk is the possibility of something bad happening at some time in the future (Oxford Learner’s Dictionaries, n.d.). This concept of risk is not only applicable to individual lives but also to businesses and organizations.

The International Organization for Standardization (ISO) 31000, the international standard for risk management, defines risk as "the effect of uncertainty on objectives." From an entity-level perspective, the risk isn’t the chance of the share market crashing but the chance that a crash will disrupt or affect you or your organization’s objectives by, for example, limiting capital for expansion. (Broadleaf, 2012). According to Murdock (2017), there are many types of risks, ranging from strategic, operational, compliance, reporting, and IT-related. The risks that exist in an organization may be inherent risks or controllable risks. Inherent risks are those that are already in existence even before the establishment of the business, and controllable risks are risks that the organization can do something about. Risk is simply a fact of life that cannot be avoided or denied. It arises because organizations set their objectives, but to reach them they must often deal with internal and external factors and influences over which it has no control. Some types of risks that an organization must be aware of are capacity risks, strategic risks, compliance risks, natural environmental risks, and political risks.

Furthermore, risk is implicit in the decision-making of an organization as it jeopardizes the achievement of its objectives. That is why it is important for the management to carefully assess and measure these risks to mitigate their effects on the organization. If risks were identified, such as their causes, influences, consequences, and the likelihood of these consequences to occur, the management can modify and mitigate it so that the organization is more likely to achieve its objectives.

References:
Broadleaf. (2012, June). A Simple Guide to Risks and Its Management. Retrieve October 31, 2021 from http://broadleaf.com.au/resource-material/a-simple-guide-to-risk-and-its-management/

Grabillo, M. A. (2021). Risk Assessment Parts 1 & 2. Accounting Made Easy. Retrieved October 31, 2021. https://www.youtube.com/watch?v=lk3l3MOYcl0&list=PLqmYUi2kytZYI68mPBCbvZLlQETDe8tat&index=2

Internal Audit Foundation. (2017). Internal Auditing: Assurance & Advisory Services, 4th Edition. Internal Audit Foundation. https://dl.theiia.org/BookstorePublic/Case-Study-1-v.3.pdf

Oxford Learner’s Dictionaries. (n.d.). Risk. In Oxford Learner’s Dictionaries. Retrieved October 31, 2021 from https://www.oxfordlearnersdictionaries.com/us/definition/english/risk_1

Murdock, H. (2017). Operational Auditing: Principles and Techniques for a Changing World (1st ed.). Taylor and Francis Group, LCC.

Gesta, Charlotte G. (2019-100594)
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