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Hello, Sir
Hope you are doing well!
I am having difficulties with identifying business risks as they are not always evident. I failed AAA , and during the exam, I struggled to find them. So, how do you think I should approach it?
Thank you for sparing your time!
I look forward to your reply!
“Business risk – a risk resulting from significant conditions, events, circumstances, actions or
inactions that could adversely affect an entity’s ability to achieve its objectives and execute its
strategies, or from the setting of inappropriate objectives and strategies.” i.e. anything that could affect the entity adversely – there are lots of examples in s.4.2 of Chapter 7 in the Study Hub. There is also a nice little Activity (Activity 5).As is explained in 4.3, business risk is much broader than RoMM – although ulitimately, most business risks will have some financial consequence. E.g. new regulation brings risk of non-compliance which might risk penalties, etc – omission of actual (or contingent) liabilities would be RoMM.
There is a nice Example 7 at the end of s.4.4 explaining Business Risks to RoMM.
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