Phoenix University Risk Assesment

Risks are innately ubiquitous they can be seen in both external and internal environments. The employee handbook provides for the basic objectives on which Riordan Manufacturing seeks to realize. In this regard, it is these objectives that the risk assessments of the company are prescribed. The company must realize, along with its directors and officers, that it is required by law that the company conduct risk assessment. In s107 of the Sarbanes-Oxley Act, it defines risk assessment as the “process of analyzing both internal and external risks and threats to achieving an entity’s goals and objectives.” (180) The company’s risk assessment should cover the changes in the operating environment, new technologies, the new information systems, personnel, activities, operations, and accounting pronouncements to name a few. The process is summarized into five steps.   The first step is to determine the control objectives of the company. Second, the company has to establish the requirements and set a list of priorities to establish the subsequent course of action. This subsequent course of action is the identification of the risks provided for in the operations of the company. Connected to this step is the verification on the actual probability that these risks do take place. Upon establishing the risks that are apparent and the level of likelihood that the company may encounter these, then it is time to manage these risks. This is done by establishing a series of policies that promotes the overall flexibility of the company.

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