Question

Please describe and explain the importance of risk management and finance and give examples

Answer 1

Risk management - It is process by which company identify, analyze, quantify and mitigate the risk involved in business. The aim of risk management is to keep the risk elements within the risk appetite of the company. All other pillar of organization like controlership, Internal audit, HR depend on the inputs from risk management team before entering into any new venture or business idea. Large scale companies have there Enterprise risk management team to deal with such issue.

For example ERM analyse the creditworthiness of any new with which we are about to enter into deal.

Finance - It is very wide field covering within itself the accounting, internal audit, quality assurance etc. This head is very important part of the organisation. All major working like ascertaining the financial performance of company, recording of transaction, payment to outsider are carried out in this head only.

For example - If any invoice is raised by the vendor then it go to finance team for processing and making payment thereon.