This website uses cookies to ensure you have the best experience. Learn more

The Issues And Importance Of Risk Reporting

2171 words - 9 pages

Q. Discuss critically the issues involved in Risk Reporting?
Risk reporting is the process of distributing information in regards to risk to the internal and external stakeholders, focusing on the disclosure of risk information. Corporate risk reporting plays an important role for the stakeholders in assessing the risk profile of the company. Helping them to better understand and align the risk profile with their holdings (Berg, 2010). Rules on risk disclosure in the company reports are designed in order to improve transparency and reduce market disorientation. Thereby improving the market efficiency of the capital markets. With the financial crises main focus of attention is directed at the importance and issue relating to risk reporting (Abraham and Marson 2012)

Risk is driven by internal and external factors and is viewed by ASB and ICAEW as an uncertainty on the amounts of benefits that includes both gains and exposures to loss. According to Beretta and Bozzalon (2004), risk disclosures are the consequences to the explanation that communication of factors has a potential to affect expected results (Abraham and Marson 2012) So in order to understand what disclosure information is required for risk reporting, it is important to understand what kind of risk is affecting the organisation. The main goal of having financial instruments is to make profits and prevent losses; there is always uncertainty on whether this goal is achieved (Sutton, 2004). This uncertainty can be divided to three main categories: credit risk, liquidity risk and market risk that looks into currency risks, interest rate risks and other price risks. The main reason for risk reporting is due to agency theory, information asymmetry, information risk, signalling perspective, modern portfolio theory and political cost issues. Due to these aspects and position the information that banks have and users of the annual report differ (Sutton, 2004). To reduce this issue disclosing information is important to reduce the information asymmetry and reduce cost of capital.
Importance of Risk Reporting
Risk reporting is an important tool organisations use for risk management, making sure the risk is identified and solve the issues relating to risk as they arise or before they are realized. Effective risk reporting focuses on how risk activities can affect the organization and individual in the profile (Abraham, and Marson 2012). It also makes sure that risk management is included in the leadership and decision making of the organization, making sure an oversight is provided on the business operations. Another important aspect of risk reporting is it helps in providing transparency over the important areas of the operations creating a continuous improvement, as areas of concern are highlighted and the organization can resolve the issues faster. Another important aspect of risk reporting is it provides assurance to the regulators, management and the board as the...

Find Another Essay On The Issues and Importance of Risk Reporting

Privileged in Media Coverage and the Façade of Objective Reporting

1920 words - 8 pages large part of this nation-state. What the various news outlets showed is that there were obvious discrepancies and biases in the reporting within some news outlets based on the proximity of the news reporters and their allegiances to either the Arab side or the Israeli side. While it is hard to infer that there are no biases in any news source, discrepancies and language differences between news reports help the readers understand and question why

Extreme Sports And The Concept Of Risk

938 words - 4 pages a sleepy and permanent planet.” In my opinion, the author of this quote is trying to convey the fact that he would rather have an experience that is brilliant and memorable instead of one that is dull, and it is up to you to decide whether you want to take that risk and be that meteor instead of living on that sleepy planet and not daring to conquer your own fears. His association of the former with a meteor and the latter with a permanent planet

Law: The Risk of Destruction and Deterioration

720 words - 3 pages The issue in this case is whether the risk of destruction and deterioration had passed onto Bagio, the buyer, or remained with ProformAgric, the seller. Generally, risk and benefit pass to the buyer on transfer of possession and ownership (assuming these occur simultaneously). The general rule is that the risk and benefit pass to the buyer as soon as the sale is “perfecta”, meaning that the agreement is unconditional and the identity, quality


1039 words - 5 pages Many people ask questions like, is smoking marijuana more of a risk or benefit to your health? And is it really as safe as you think? The truth is that marijuana can benefit or damage your health. This information will explain many health risks and benefits of marijuana. Marijuana is easy to get and the most popular mostly illegal drug than any other illegal street drug. National surveys have said 48 percent of Americans have tired it. Also

The Risk Factors and Stories of Obesity

2524 words - 11 pages ,they either watch a movie,or play a video game..and having some snacks and beverages which leads to excess amount of fats. Another reason of obesity is junk food.If you look at the calories in a cheese burger you would be surprised.Can you imagine that a cheese burger has 326 calories!.And to burn this amount of calories ,you need to walk for 30 minutes. One of obesity’s causes is not having enough sleep..infact,the risk is doubled.Other cases

Ethical And Legal Obligations of Financial Reporting

1214 words - 5 pages ) and invites input from any applicable organization or individual (Marshall, McManus and Viele, 2004a). In addition to GAAP, the FASB issues "Statements of Financial Accounting Standards" which gives direction for specific reporting issues currently in use (Marshall, et al., 2004a). Companies and independent auditors are held to different standards of regulations. Companies are regulated by the SEC; auditors are regulated by the PCAOB. The PCAOB

Risk and types of Financial Risk

1611 words - 6 pages Value at Risk -Introduction As Walter Wriston, former chairman of Citigroup, said “All of life is the management of risk, not its elimination” and nowadays modern banking is about controlling risk and returns. The ability of a financial institution to control risk is a key factor that determines its success or its failure in markets. As the late financial crisis has demonstrated institutions that were not properly prepared to face the crisis

Risk and the 1500s

996 words - 4 pages Risk is a strategy game that simulates war during the 1500s. In many ways it resembles actual war. For instance, when a player attacks a country there is usually a reason they are doing so, and when a country attacks another country they usually have a reason. The strategies used in game play are similar to real life war strategies, such as, building up troops in one area so that it would be easier to defend and easier to attack a weaker country

The Conceptual Framework for Financial Reporting: Bega´s Current Accounting Practice of Property, Plant and Equipment

2182 words - 9 pages Overview of the report This report analyses the disclosures of objective of general purpose financial reporting and the qualitative characteristics of useful financial information according to The Conceptual Framework for Financial Reporting. It investigates Bega’s current accounting practice of Property, Plant and Equipment in accordance with AASB 116 Property, Plant and Equipment, and how it satisfies the objective of general purpose financial

The Origins and Importance of the Quran

1798 words - 7 pages The Origins and Importance of the Quran The Quran is the Islamic Holy book. The word Quran means recitation and its verses are recited by Muslims throughout the world. The Quran was revealed to Prophet Muhammad in Ramadan, the holy month of the Islamic calendar, in the year 610CE. One night that came to be known as ‘The night of power’, when Prophet Muhammed was 40 years old, while meditating in his usual place, Cave

The Developments and Issues of E-Learning

1212 words - 5 pages The Developments and Issues of E-Learning News Item: Clark, Don “The Pros and Cons of E – Learning”. P. 2007 Presentation of the Issue E-Learning is trying to provide a more individualized, self-paced, self-directed learning experience (Clark). A survey by a Sociology Professor at CSU-Northridge showed that students in his virtual class performed 20% better than students

Similar Essays

Freedom Of Reporting And Security Issues

845 words - 4 pages given a monumental amount of access to information, arguably more than journalists during the Vietnam War. The difference between the two however is the production of gathered information. During the Vietnam War, “violent and disturbing images were broadcast into American homes on a daily basis” (“Freedom of Reporting and Security Issues”, n.d); this does not occur to such an extent today. Today we are highly advised not to display gruesome

Legal And Ethical Issues Of Reporting Abuse In Both Children And The Elderly

779 words - 4 pages Reporting abuse has been a legal and ethical dilemma for years in the healthcare system. Some physicians, nurses, and other healthcare workers are quick to report abuse while others are more reluctant to report abuse in fear of overreacting to an occurrence. This leaves children and the elderly in unknown state of protection from their abusers. While these medical personnel are reluctant to report abuse, there are approximately 2,000

Importance Of A Business Plan And Issues With Start Up

1167 words - 5 pages Answers obtained from SBA online, Quicken small Business site, and What is the purpose of a business plan, and why is it an essential first step for a start-up firm?A business plan closely describes your business, analyzes your goals, and functions as your business's resume. It helps you designate resources properly, handle unanticipated dilemmas, and make good business choices. The importance of a compendious, cerebral

The Ethical And Legal Obligations Of Accounting Reporting

1089 words - 4 pages Accounting is known as the Language of Business. The American Heritage Dictionary of the American Language defines accounting as activities that provide information, usually quantitative and often express in monetary units, for decision making, planning, controlling resources and operations, evaluating performance, and financial reporting to regulatory authorities and the membership. Here in the United States we have three forms of accounting