Financial control risk covers a wide range of financial disciplines and processes that collectively aim to ensure that your business follows good practices in the critical area of financial discipline. What does this include? Financial control includes: General financial (e.g. budget) discipline Having suitably qualified and dedicated accounting staff Ensuring robust procurement processes Accurate and timeous financial reports The segregation of duties Regular reconciliation of accounts Credit extension processes Good debtor and asset management To name but a few Why is it important? It will force you to consider ALL areas of financial controls, even those you may not think of or consider important and will identify the areas that most expose your business to loss.. A lack of financial controls is probably the most common reason for businesses to fail. What could I get hope to get out of the assessment? Doing the financial control assessment will help you identify critical potential risks in your financial controls. It will provide high level feedback on financial discipline and help identify specific risks, not only via specific recommendations, but also in the process of answering the questions.

What is Balance Sheet Risk?

The risks arising from specific weaknesses in asset and liability management as well as in financial disciplines and financial controls which impact on the balance sheet.

What does it cover?

This assessment emphasises the need for an understanding of the implications of financial decisions involving areas such as debt levels, borrowings, profit margins, liabilities, debtors and stock have on the balance sheet.

Why is it important?

Weaknesses in financial disciplines surrounding asset and liability management and in particular the impact debt levels and liabilities can have on a business’s balance sheet are critical to its survival.

What can I get out of the Balance Sheet Risk assessment?

An indication of the strength of and risks inherent in your balance sheet e.g. solvency, liquidity, capital and funding mix and ability to meet debt obligations.

What is Debtor and Credit Extension Risk?

The risks arising from the extension of credit to customers. Credit extension may trigger other risks (e.g. operational risks).

What does it cover?

The obvious financial risks of cash flow problems and bad debt risks, but also the potential operational risks that these can create.

Why is it important?

Many businesses fail as a result of poor credit extension and debtor management, especially when revenue is highly dependent on credit sales  and funding is scarce.

What can I get out of the Debtor and Credit Extension Risk assessment?

A high level indication of the risks inherent in your credit extension and debtor management, but with specific feedback on how to improve these.

Strategic Risk

Strategic risks are those factors/ risk that threaten the long-term prospects of the business, and come from the outside (e.g. new competitors) and inside (e.g. poor decisions).

What does it cover?

Strategic risks are very broad, spanning new entrants, the impact of technology, strategic funding and stakeholder relations, to name but a few.

Why is it important?

Businesses must not only carefully position themselves for the future, but execute plans well. Failure to address big strategic risks will probably cause a lot of pain.

What can I get out of the Strategic Risk assessment?

General feedback on your overall strategic risk management, but with specific feedback on a few risks. It will also highlight risks you may not have even been aware of.

What is Operational Risk?

Operational risks are the factors/ risks that could impact your ability to produce products or render services.

What does it cover?

Operational risks are as wide ranging as the inputs (resources, assets and people) required to produce products or render services. Examples include:

Unmanaged operational risk threatens the survival of your business as it affects you ability to generate income.

What can I get out of the General Operational assessment?

High level feedback on how you are managing operational risk. Detailed feedback on areas of significant weakness and corrective action.

What is Human resources risk?

Human resources (HR) risks are the collection of risks resulting from the people (staff) in a business.

What does it cover?

HR risk is as wide ranging and diverse as the people and roles in your business. HR risks include recruitment, contracts, employee fraud and staff performance.

Why is it important?

Staff can either be a huge asset or a big liability (risk), depending on how HR is handled. Good HR practices can address many other risks.

What can I get out of the HR assessment?

General feedback on the degree to which HR risks are being managed, with specific feedback on a few critical areas (e.g. contracts).

What is reputation risk?

Reputation risk is that the risk that an event or series of events could seriously damage your reputation and how this can cascade into other risks (e.g. regulation, financial)

What does it cover?

Reputation risk is the risk that events may cause damage to te way clients, suppliers etc.see  you and that this could result in losses. On separate slide - Reputation risks can be caused by fraud, poor governance, poor operational controls (quality), poor environmental practices.

Why is it important?

Many would see their reputation as a big asset, and if so, you would need to be aware of the risks of reputational damage, and plan for these

What can I get out of the reputation risk assessment?

Feedback on the relative importance of reputational risk and the need to plan for these risks, as well as some detailed feedback to reduce some risks.

Governance, compliance, regulatory and legal risks effectively cover the risks of poor governance and noncompliance with regulations and the legal framework.

What does it cover?

These risks start with the organisation’s culture and attitude to good governance, compliance with the regulatory demands and the ethics of the business. This area includes risks relating to:

Why is it important?

Poor governance and compliance frankly creates an environment in which other risks can quickly balloon.

What can I get out of the Governance, Regulatory and Legal assessment?

The main value of this assessment is in the high-level feedback, that focuses on the governance and compliance culture. You will also however get some detailed feedback on how to improve this area

What is general Technology Risk?

The risks that arise from technology, both within your industry and technology generally.

What does it cover?

Technology risk covers the technology risks in your industry (e.g. new products) and general IT risks (e.g. hardware crashes, viruses and cybercrime).

Why is it important?

Many businesses fail as a result of poor credit extension and debtor management, especially when revenue is highly dependent on credit sales and funding is scarce.

What can I get out of the technology risk assessment?

A high level indication of the technology risks facing your industry, as well as advice on specific IT risks, and if further assessments are required