Free Essay About Analyse The Relationship Between Risk And Return.

Discussion Questions

Discussion Questions

Risk and return relate directly in the sense that the greater the risk of investment, the greater the returns on investment or profits. Similarly, low-risk investments produce low returns.

Explain The Portfolio Approach To Risk Management.

Using a portfolio approach to risk management, means a person has defined a set of parameters around which to consider all parts in a combined approach and each part in isolation. This overall context facilitates decision-making as well as a coordinated resource allocation.

Explain The Use Of Insurance In Managing Risk.

Indeed, the use of insurance is one common way of managing risks. When used correctly, the insurance company shares losses associated with income, property, and liability. One can purchase separate policies for each type of loss. Besides, people also use a cheaper option of commercial packages to cover a range of losses.

Explain The Links Between Business Continuity, System Availability, And Disaster Recovery.

In my perspective, I view them as a continuum. On one side, you have systems available that are operational. In protecting them against unexpected failures, you move to business continuity. However, since systems will always fail, irrespective of all safeguards and protection efforts, you eventually resort to aspects of recovery.

Explain Some Major Risks Inherent In The Payroll Cycle. How Can These Risks Be Mitigated?

Incorrect records are one of the great risks a firm may face in payroll accounting. Manual entry errors, computer system faults, and calculation mistakes are major causes of these risks. Ideally, companies ought to have proper procedures to detect risk errors and fraud. They should impose regulatory penalties too.
Explain The Purpose And Importance Of The Completeness Assertion For Accounts Payable. What Other Function(S) Would The Completeness Assertion Be Particularly Important To?
In most cases, completeness assertion ensures the recording of all transactions during an accounting period. The completeness assertion focuses more on liability and expense accounts, and it could be significant to the business. For example, if a customer fails to record a valid revenue transaction, the understatement results in the revenue account. Accounts payable refer to the vendor obligations for purchases of inventory, supplies, or services on credit.

Describe The Source Documents And Controls That Would Be Included In A Typical Production Cycle.

The production cycle has a link to the acquisition cycle of goods and services and to the revenue cycle in which there is an inventory sell. During an audit, source documents provide evidence of business transactions. These materials include cash register tapes, cancelled checks, cash receipts supplier invoices, deposit slips, and purchase order, among others.

Why Is The Portfolio Approach A Good Tool To Manage Risk? Explain Your Answer.

Under uncertainty, portfolio management provides a basis for decision-making. It presents the best investment plan, as it minimizes the investing risks while increasing profit-making opportunities.