When assessing the risk associated with an activity, an internal
auditor should: a) Determine how the risk should best be managed.
b) Provide assurance on the management of the risk. c) Update the
risk management process based on risk exposures. d) Design controls
to mitigate the identified risks. 12. In deciding whether to
schedule the purchasing or the personnel department for an audit
engagement, which of the following would be the least important
factor? a. There have been major changes...
Describe the three categories of ratios used in ratio analysis.
When working on assessing the company you chose, which of these
ratios do you think is the most important indicator of successful
performance, why
Ratio analysis is an important tool used by investors, creditors,
and management when assessing the health of a company. However,
ratio analysis has some problems and issues. What do you think are
the problems and issues you must be aware of when conducting ratio
analysis? What are the key ratios a creditor would investigate, and
why?
Why are off-balance sheet items so important when examining a
bank’s financials and assessing risk? If most of these may become
medium-risk commercial loans, what do you think regulators could do
to encourage banks not to be excessive with these types of loan
commitments
As a risk manager for XYZ corporation, you are assessing the
firm’s various risk exposures to include in a regular semi-annual
report to upper management.
XYZ is a medium-size import/export firm located in Cambridge,
UK. Its primary sources for imports, which it sells in the UK and
Eurozone, are located in China and Vietnam. It has customers
throughout the world, but more than half of its exports go to
Africa. XYZ customarily borrows to cover funds tied up in
exports....
1. When assessing a company's credit risk:
Multiple Choice
Analysts use only financial ratios and do not need to review the
statement of cash flows.
Analysts use only the statement of cash flows.
Both liquidity and solvency must be reviewed.
The assessment involves looking only at the operating and cash
conversion cycles.
2.The accounts receivable turnover ratio
Multiple Choice
is not useful in determining changes in customer payment
patterns.
uses total sales and not just credit sales in the
computation....