AIS04 - Financial risk Acct 3320 Market risk tegic risk...

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Financial risk Market Risk Credit Risk liquidity risk zard Risk ectors’ and officers’ liability Operational risk Systems risk Human risk ategic risk al and regulatory risk iness strategy risk Acct 3320 Chapter 4 Internal control: one element of an accounting information system. Policies and procedures designed to achieve 4 objectives: safeguarding assets, ensuring financial statement reliability, promoting operational efficiency, and encouraging compliance with management’s directives. Internal control is a process Internal control involves people in the organization Internal controls are designed to provide reasonable assurance Internal control provide reasonable assurance in a few common areas, such as operations, financial reporting, and human behavior. Foreign Corrupt Practices Act: one of the earliest laws focused on business ethics; passed in 1977. Prohibits conducts that would be considered illegal in the United States, even if that conduct is acceptable in foreign countries Sarbanes Oxley Act of 2002: federal legislative response to the corporate scandals of the late 20 th century, imposes specific duties on manages and auditors for the review of internal controls, disclosures, and related issues. Specifies fines and penalties for noncompliance Brown’s taxonomy of risk: a way of looking at and categorizing risk. Four broad categories include financial, operational, strategic, and hazard. Financial Risk: are related to monetary activities Market risk: refers to changes in a company’s stock prices, investment values, and interest rates. For example, if an organization fails to diversify its financial investments adequately, it runs the risk of a significant decrease in value that will impact financial statements. Credit risk:
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This note was uploaded on 11/27/2010 for the course ACCT 3320 taught by Professor Brown during the Spring '10 term at University of Texas at Austin.

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AIS04 - Financial risk Acct 3320 Market risk tegic risk...

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