Question

1. Why must a financial manager have an integrated understanding of the five basic finance functions? Why is the corporate governance function considered a finance function? Why has the risk management function become more important in recent years?

Answer 1

Five basic finance functions are:
1.financing (or capital raising)
2.capital budgeting
3. financial management
4.corporate governance
5.risk management
All these factors have a role to play in the job of a finacial manager. Manager should be able to raise the money for a project, expansion etc. by keeping the optimal cost of capital in mind, and should be able to identify, manage and control the risks by acting in the best interests of shareholders.
Mnagers should always act in the best interests of the shareholders. That is why the corporate governance function considered a finance function. Also, companies are facing new risks these years which can leads to high potential losses for the company. Managers should be aware of the new methods to identify, manage and reduce risk.