Question

Discuss the Process that can be used by Management to effectively identify, mitigate, track, and control business risks, particularly those that could result in the financial statements being materially misstated.

Answer 1

there are many tools and techniques used by the management to identify,mitigate,track and control business risks

following are the tools and techniques

1.Documentation Reviews

The standard practice to identify risks is reviewing project related documents such as lessons learned, articles, organizational process assets, etc

2.Information Gathering Techniques

The given techniques are similar to the techniques used to collect requirements. Lets look at a few of them

Brainstorming

Delphi Technique

Interviewing

Root Cause Analysis

Swot Analysis (STRENGTH, Weakness, Opportunities And Threats)

Checklist Analysis

Assumption Analysis

Outputs to Identify Risks etc.,

there will be many risks which cannot be identified easily for that management has to establish a strong internal control system

PERFORM QUANTITATIVE RISK ANALYSIS

The next step of Qualitative risk analysis is to analyze the probability and impact of risks in Perform Quantitative Risk. The purpose of Quantitative Risk Analysis is:

• Identification of risk response that requires urgent attention

• Identify the exposure of risk on the project

• Identify the impact of risk on the objective of the project

• Determine cost and schedule reserves that could be required if risk occurs

• Identify risks requiring more attention

there will be lot of methods for identifying the risks,different types of businesses will choose different method