BUSINESS RISK
CHAPTER 7
, BUSINESS RISK
• Differentiate between business risk and audit risk (covered later)
• Very topical! (Frequently examined in the ITC)
• Typically affects the profitability.
• For each risk identified, you must also think of how it can be mitigated (reduced to an
acceptable level).
• Examples: sales volume, competition, regulations, overall economic climate, financial
leverage.
• Read, Read, Read, business newspapers and magazines. Also check out Investopedia
Industry Handbook.
CHAPTER 7
, BUSINESS RISK
• Differentiate between business risk and audit risk (covered later)
• Very topical! (Frequently examined in the ITC)
• Typically affects the profitability.
• For each risk identified, you must also think of how it can be mitigated (reduced to an
acceptable level).
• Examples: sales volume, competition, regulations, overall economic climate, financial
leverage.
• Read, Read, Read, business newspapers and magazines. Also check out Investopedia
Industry Handbook.
