Question

conduct the industry risk Analysis of Australian education and training industry?
explain about the following risk faced by the industry:

1. operational risk
2. Financial risk
3. Political risk
4.Regulatory and Compliance risk
5. Reputational risk

Answer 1

OPERATIONAL RISK

It results from the failed or inadequate internal process, people or systems.It is the risk related to organisations day to day operations.It focuses on things done within the organisation.Operational risks include supply chain risk, process execution risk, human resources risk such as employee turnover and performance incentive risk, technological risks such as glitches, failures, orsecurity breaches, business continuity (that is, breaks in continuity), customer satisfaction (or dissatisfaction),and product or service failure.
IT IS DIVIDED INTO REGULATORY AND COMPLIANCE RISK

Operational risk includes legal risk (making the enterprise subject to civil orcriminal penalties) and compliance risk (the risk that processes will not becarried out in accordance with best practices).Compliance risk is the potential for material losses and exposures arising from non-compliance. An organization that fails to act in accordance with standards set by its industry, laws, or its own policies can find face legal penalties.Regulatory risk refers to the potential negative impact on certain businesses due to a change in the laws and regulations in a country or region.

Because operational risks are more directly under the influence of management than are strategic
risks, management is in a good position to mitigate such risks proactively.

FINANCIAL RISK

Financial risks are connected to the financial health of the company. Capital availability is one
of the most important financial risks. Financial risk can also arise from volatility of foreign currencies,
interest rates, or commodity prices (inputs). Further financial risks can result from concentration of
customers and receivables, lack of liquidity, and trading activities. The need to comply with accounting
standards, financial reporting requirements, regulatory reporting requirements, and tax
regulations introduces important financial risks, as well.

• Financial risk generally relates to the odds of losing money.
• The financial risk most commonly referred to is the possibility that a company's cash flow will prove inadequate to meet its obligations.
• Financial risk can also apply to a government that defaults on its bonds.
• Credit risk, liquidity risk, asset-backed risk, foreign investment risk, equity risk, and currency risk are all common forms of financial risk.
• Investors can use a number of financial risk ratios to assess a company's prospects.

POLITICAL RISK

Political risk is the risk an investment's returns could suffer as a result of political changes or instability in a country.Political risk can affect the operations and profitability of a business as directly and quickly as any financial, physical, or market risk factor.  The impact of political risk is considered to be long-term because the risk rises over time, given the greater potential for events and changes over time. Although political risk is extremely difficult to quantify, companies and investors must examine and understand the potential for political risks by closely examining the location's history, political institutions, and political forces at work in the region. Political risk exists in every country around the globe and varies in magnitude and type from country to country. Political risks may arise from policy changes by governments to change controls imposed on exchange rates and interest rates

REPUTATIONAL RISK

Reputational risk is a threat or danger to the good name or standing of a business or entity.reputation risk, is the potential loss to financial capital, social capital and or market share resulting from damage to a firm's reputation. This is often measured in lost revenue, increased operating, capital or regulatory costs, or destruction of shareholder value.Reputational risk refers to the potential for negative publicity, public perception or uncontrollable events to have an adverse impact on a company’s reputation, thereby affecting its revenue.