Question

There is a tool (way) to manage business risk. It has four parts. Explain each of them giving examples.

Answer 1

There are different tools to manage the risk for business. These tools minimize the risk and increase the profit for the company. Some tools are as following:

Internal control system- This system manages and minimizes the risk to business. Internal control system prevents from fraud and malpractices in the office.

Insurance- General insurance of goods, employees and building etc. provides cover and prevents the company from losses and damages.

Audit- Company should conduct regular internal audit and external audit also. Auditor cross checks the records and transactions and finds the error if any so that the error may not repeat in future. Audit also shows the real financial position of company.

ERP software- Company should use ERP software so as to manage the data in well manner and for the security of information. Enterprise resource planning is an important part of the company.