Assessing and Mitigating Risk

In: Business and Management

Submitted By SULLIJ
Words 1580
Pages 7
Silver Fiddle Construction Risk Management Plan

Silver Fiddle Construction
Grand Junction, Colorodo
Joshua Sullivan
Unit 6 Assignment 1 Risk Management Plan (Final Course Project)
Assessing and Mitigating Risk
Instructor: Denise Eggersman

Version # | ImplementedBy | RevisionDate | ApprovedBy | ApprovalDate | Reason | 1.0 | Joshua Sullivan> | 02/03/2013 | <Bolo and Isabella Czopek> | <02/08/2013> | Initial Risk Management Plan draft | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |


1.1 Purpose Of The Risk Management Plan 1
2 risk management Procedure 1
2.1 Process 1
2.2 Risk Identification 1
2.3 Risk Analysis 1
2.3.1 Qualitative Risk Analysis 1
2.3.2 Quantitative Risk Analysis 2
2.4 Risk Response Planning 2
2.5 Risk Monitoring, Controlling, And Reporting 2
3 Risk Management Plan Approval 2
Conclusion 3
APPENDIX B: RISK MATRIX …………………….............................................5
APPENDIX C REFERENCES……………………...............................................6

Purpose Of The Risk Management Plan *
A risk is an event or condition that, if it occurs, could have a positive or negative effect on a project’s objectives. Risk Management is the process of identifying, assessing, responding to, monitoring, and reporting risks. This Risk Management Plan defines how risks associated with the Silver Fiddle Construction Company, recorded, and monitored throughout the lifecycle of the project and provides templates and practices for recording and prioritizing risks. Silver Fiddle Construction Company specializes in building high-quality, customized homes in Grand Junction, Colorado. New customers, the Czopeks, have hired you to build their dream home. The anticipated cost of the home is…...

Similar Documents

Risk Management

...Risk Management: Over the past decade, risk and uncertainty have increasingly become major issues which impact business activities. Many organizations are raising awareness to minimize the adverse consequences by implementing the process of Risk Management Framework which plays a significant role in mitigating almost all categories of risks. According to Ward (2005), the objective of risk management is to enhance a company’s performance. In particular, the importance of the framework is to assist top management in developing a sensible risk management strategy and program. In an effort to effectively use the risk management process frameworks, it is important to differentiate between risk and uncertainty. There is a tendency to claim that the process of the COSO framework and SHAMPU framework are more appropriate to further explain and deal with the issues of uncertainty and risk. This essay will first define risk and uncertainty. In the second section, it will introduce the process of two frameworks namely the COSO framework and the SHAMPU framework. It will evaluate the performance of the two different alternative risk management frameworks to distinguish different between risk and uncertainty. Finally, an opinion will be expressed if the effective use of risk management process frameworks depends upon an ability to differentiate between risk and uncertainty. Ward (2005) points out that different people have different viewpoints about risks and uncertainties.......

Words: 2006 - Pages: 9

Assessing Statistics

...Assessing Statistics & Probabilities AIU Online – BUSN311 Abstract This is an email that will discuss the assessment of probability. It will give an overview of specific characteristics of the database used and include specific variables concerning that data. It will discuss how important statistics are in the work environment as well as where they are being used. Memo To: Head of the American Intellectual Union From: Researcher Date: January 20, 2013 Subject: Data Analyzation/Calculations Dear Head of the American Intellectual Union, This email is to inform you about certain important characteristics with specific variables in the database on job satisfaction. It will discuss which variables are quantitative and which ones are qualitative as well as their categories and why they are used. Also, the importance of probability and statistics in the real world and their value will be discussed. Overview The goal of the current data set is to see how satisfied employees are with their jobs. This includes the variables of gender, age, position, and department, rate of satisfaction, how long they have been employed, and the availability of benefits and overtime as well as inside and outside job influences. All of these categories are used because they can influence the level of job satisfaction of your employees. For example, a male employee may have a higher expectation on the job than a female and get paid more; which may cause less satisfaction due to......

Words: 1047 - Pages: 5

Assessing Materality and Risk Simulation

...TEAM B TEAM B ------------------------------------------------- Assessing Materiality and Risk Simulation University of Phoenix ACC/491 Dwayne Thompson March 10, 2013 ------------------------------------------------- Assessing Materiality and Risk Simulation University of Phoenix ACC/491 Dwayne Thompson March 10, 2013 The objective of the audit of financial statements is to enable the auditor to express an opinion if the financial statements are prepared in accordance with an identified financial reporting framework. The reason that materiality is allocated to those accounts sampled because materiality represents the magnitude of an omission or misstatement of an item in a financial report. The three function of the audit risk are inherent risk (IR), control risk (CR), and detection risk (DR). Every level of audit risk has an opposite connection that exists between assessed levels of controls, inherent risk, and level of detection risk Why do certain accounts have to be audited 100%? Accounts need to be audited 100% so the users of the financial statements can rely on the information and be able to make decisions for investment purposes. It also helps management make sure the company is profitable as well as following rules and regulations of the accounting standards and policies. Auditing accounts are done to protect the investors, shareholders, banks, and to give assurance that the......

Words: 804 - Pages: 4

Assessing Projects and Risk: When the Npv Is Not Enough

...Assessing Projects and Risk: When the NPV is not Enough Augusto Korps Jr.- Managing Director, Sao Paolo Renato Delgado- Associate, Sao Paolo William Morishigue- Senior Analyst, Sao Paolo Discounted Cash Flow is the most widely-used technique for project assessment and is supported by modern corporate finance theory. Under this method, the expected future cash flows must be discounted by a rate that will compensate for the systematic risk of these flows. After this, decisions are based directly on the Net Present Value (NPV): if it is more than zero, the company should invest, since the project will bring wealth to the company. Despite the theory supporting this model, it's obvious that decisions are not actually based only on the "NPV>0" rule. Companies often reject projects with a low positive NPV and relevant cash flow uncertainty. For example: suppose that a company has R$ 90 million in available cash and is considering a project with immediate results that can be divided into two scenarios with equal probabilities of occurrence: the company could earn 102 or lose 100. Should it invest? The project would have an expected value of 1 (NPV>0), so in theory the company should accept it. Even with such reasoning, it would be hard to imagine a company carrying that project through. We can see, therefore, that NPV analysis is not always enough for a decision. So how can we explain this type of situation from the optics of financial theory, and how can we incorporate it......

Words: 617 - Pages: 3

Assessing Risk and Internal Control

...Chapter 7: Assessing Risk and Internal Control Audit Risk Assessment: Auditing is fundamentally a risk management process. Audit risk is related to information risk that financial statements are materially misstated. -lower audit risk by performing more audit work that will give them a high level of assurance that the financial statements are correct. 1) INHERENT RISK (IR)- the probability of material misstatement occurring in transactions entering the accounting system or being in the account balances. Auditors do not created or control inherent risk. Can only assess its magnitude based on prior experiences, management bias, and the nature of the transaction. Look at characteristics of clients business, types of transactions, and effectiveness of accountants. 2) CONTROL RISK (CR): risk that the clients internal control system will not prevent or detect a material misstatement. Auditors do not create control risk, they assess probability of failure to detect material misstatements. Assessment is based on study and evaluation of the company’s control system. **Control risk should not be assessed so low that auditors rely entirely on controls and do no substantive work. 3) DETECTION RISK (DR): the risk that any material misstatement that has not been corrected by the clients internal control will not be detected by the auditor. **Auditors can control this risk by conducting substantive (balance audits) tests. (include: audit of details of transactions and balances, and......

Words: 1014 - Pages: 5

Mitigating Exchange Risk

...Mitigating Exchange Rate Risk FIN /370 Aug 12,2013 Mitigating Exchange Risk MSMEs are exposed to many forms of risk in their course of business, such as interest rate risk, foreign exchange risk, and natural disasters. These could result in financial loss and minimize their profit. Since MSMEs work on tighter budgets than larger firms, and have weaker capital base, losses through exposure to various risks can result in more severe impact on profits and operating efficiencies for MSMEs than for large firms. (Export) Foreign exchange risk in particular, impacts firms engaged in exporting, importing, and borrowing in foreign currency. Rupee appreciation benefits importers as it decreases rupee prices of imported goods and harms exporters as it increases foreign currency prices of exported goods. Rupee depreciation harms borrowers who take loans in foreign currencies that are cheaper than Indian loans. (Export) Since currency fluctuations adversely impact MSMEs, they should determine their risk exposure to various currencies, as well as adopt risk mitigation strategies and methods. • (Export)The currencies to which the firm is exposed to • The extent of sales / purchases /receivables / payables denominated in foreign currencies • The extent to which price fluctuations can be passed on to customers (by increasing price or by entering price variance clauses) • Cash flow position of the firm and ability to withstand...

Words: 252 - Pages: 2

Mitigating Risk in Transportation

...Mitigating Risk in Transportation Costs Troy Beck MGT325: Introduction to Transportation Management Instructor: Stephen Griffith August 25 2013 Mitigating Risk Mitigating costs is important to the success of every company this is especially true in the transportation industry. Economic, accounting , and social costs all need to be evaluated to ensure that a business can remain successful. This paper will explore these three cost concepts and provide recommendations on how to mitigate the risks associated with each. Accounting costs is the first concept. This includes all of the cash outlays of the company. This is the easiest concept to understand. The accounting costs include all of the expenses incurred by the company. This includes fuel, driver wages, wear and tear on the equipment and other costs associated with delivering the freight. When hauling truck load freight this is very straight forward but in the case of LTL freight or package delivery this becomes more difficult. Mitigating these costs can be difficult, but it can pay big dividends for the company. If a company is able to quantify all of its operations they would be able to evaluate which service is the most costly and focus on reducing this costs. Economic cost is the second cost, this is different from the accounting cost. Economic costs are associated with the alternative cost doctrine. Using this doctrine the cost of a resource is its value in its best alternative use. With this being said......

Words: 651 - Pages: 3

Mitigating Exchange Rate Risk

...Cynthia Knox RES/351 July 29, 2013 Ross Jackson Bernard Madoff’s ponzi scheme In this paper I am going to show hoe Bernie Madoff’s scheme people out of thousand and even million’s dollars of money. I will address the unethical behavior the injury that her people by taking their money and trust from them. What Bernie did hurt people not a company by making up fake investment company? How this could have been avoided is that people do research on the companies over even the person that is asking for large sums of money. These are the things that I will be addressing in this paper. Who is Bernie Madoff Bernie Madoff was born on April 29, 1938, in Queens, New York, Bernard was born to polish immigrants, work for many years as a plumber. Bernie married Sylvia his wife they had one daughter, son. Bernie had hard times during the Great depression so in 1950 he got involved in finance. Ponzi scheme The unethical research behavior was involved was the hedge funds scheme were he would have to sell or liquidate holding from one hedge funds to keep down pressure on the stock prices. When doing this it will keep the negative pressure off the stock exchange. Berine had celebrity connections from Kyra Sedwick, Kevin Bacon, Tom hanks, and many more people that invested in the hedge funds at first they were getting returns back at 10% return. The company was growing and he was hiring more family members. The person that was hurt by this scheme was his......

Words: 540 - Pages: 3

Cendant Corporation Evaluating Risk of Financial Statement Fraud and Assessing the Control Environment

...Cendant Corporation Evaluating Risk of Financial Statement Fraud and Assessing the Control Environment • Describe the auditor's responsibility for considering a client's internal controls • Describe the auditor's responsibility to detect material misstatements due to fraud • Identify red flags present during the audits of CUC International, Inc.'s financial statements, which suggest weaknesses in the company's control environment (CUC was the predecessor company to Cendant Corporation) • Identify red flags present during the audits of CUC's financial statements suggesting a higher likelihood of financial statement fraud • Identify management assertions violated as a result of the misstatements included in CUC's 1995 through 1997 financial statements (prior to its merger with HFS, Inc.) • Identify audit procedures that could have been performed to detect misstatements that occurred One can only imagine the high expectations of investors when the boards of directors of CUC International, Inc. and HFS, Inc. agreed to merge in May 1997 to form Cendant Corporation. The $14 billion stock merger of HFS and CUC, considered a marriage of equals, united two large service organizations. CUC was a direct marketing giant with shopping, travel, automobile, and entertainment clubs serving more than 68 million members worldwide, whereas HFS was a franchisor of brand-name chains such as Ramada, Days Inn, Avis, and Century 21, with more than 100......

Words: 2624 - Pages: 11

Mitigating Prison Violence

...Mitigating Prison Violence Cynthia Evans CJ522: Comparative Correctional Systems June 17, 2014 Mitigating Prison Violence Violence in prison systems remains to be a persistent problem among enforcers and inmates alike. Not only does it compromise inmate safety and institutional security, it distorts the purpose of prison systems as penitentiary systems meant to discourage criminal behavior. Adding to this complication, the problem is present in nearly all prison systems worldwide, with some systems more prone to it than others. In America, homicide inside jails and state prisons has remained relatively low in recent years at 3 per 100,000 on average (Mumola, 2005). The same cannot be said for Brazilian prisons, however; in 2013 alone, around 60 inmates were killed in Brazilian prisons, and three others died through decapitation and heavy mutilation at the beginning of the year (Cawley, 2014). Violence in prison systems is by no means limited to physical violence or individual assaults. In the first place, “violence in prison” is a broad category, which involves a range of situations and actions from certain parties, with violence as their common factor. It may involve riots, mutinies, and individual assaults. It may also, in fact, be taken to mean any form of violence—usually physical and/or sexual—done by inmates to fellow inmates, or prison staff to inmates. For example, while physical violence is an all-time low in American prisons, sexual violence is on the rise......

Words: 1472 - Pages: 6

Assessing the Risk, Return and Efficiency of Banks’ Loans Portfolios

...Assessing the risk, return and efficiency of banks’ loans portfolios ∗ Javier Menc´ ıa Bank of Spain June 2008 Preliminary and Incomplete Abstract This paper develops a dynamic model to assess the risk and profitability of loans portfolios. I obtain their risk premia and derive the risk-neutral measure for an exponentially affine stochastic discount factor. I employ mean-variance analysis with a VaR constraint to assess efficiency. Then I compare Spanish institutions in an empirical application, where small institutions seem to be less efficient than large ones on aggregate terms, while commercial and savings banks perform better on their respective traditional markets. Finally, I find increasing discrepancies between riskneutral and actual default probabilities since June 2007 and discuss their possible sources. Keywords: Credit risk, Probability of default, Asset Pricing, Mean-Variance allocation, Stochastic Discount Factor, Value at Risk. JEL: G21, G12, G11, C32, D81, G28. This paper is the sole responsibility of its author. The views represented here do not necessarily reflect those of the Bank of Spain. Thanks are due to Alfredo Mart´ for his valuable suggestions as well as for ın, help with the interest rate database. Of course, the usual caveat applies. Address for correspondence: Alcal´ 48, E-28014 Madrid, Spain, tel: +34 91 338 5414, fax: +34 91 338 6102. a ∗ 1 Introduction Standard capital market theory states that there is a risk-return tradeoff in equilib- ...

Words: 11804 - Pages: 48

Risk Template

...Risk Template Introduction Identifying the risks and issues associated with procurement, both individually and collectively, are important to the successful completion of a project. When procurements are effectively managed, money and time on a project can be ultimately saved. During the procurement management process of a project, risks are identified, assessed, and a plan is chosen as to how to close those identified risks. There are many different procurement risk types dependent on the scope and details of the project. What is Risk Management? Risk management is an activity which integrates the identification of risk, risk calculation, developing approaches to manage the risk, and plan of alleviation using corporate resources (Berg, 2010). Systems are put into place to ensure organizational participants are continually proactive as well as reactive to possible or emerging risks. Risks are found throughout every stage, step, and facet of a project. Identifying potential risks as well as planning to cope with on-going or emerging risks is crucial to project success and completion. The institution of an adequate risk management system will effectively enable some control over the risks of a project. The implementation of this system is extensive and should be integrated into the framework, mission, and culture of operations to produce successful organizational objectives and to properly evaluate and manage the combined level of risk (Ulrik & Sof, 2014)...

Words: 1185 - Pages: 5

Acc 490 Week 3 Learning Team Assignment Assessing Materiality and Risk Simulation

...Team Assignment Assessing Materiality and Risk Simulation Get Tutorial by Clicking on the link below or Copy Paste Link in Your Browser’ For More Courses and Exams use this form ( ) Feel Free to Search your Class through Our Product Categories or From Our Search Bar ( ) Assessing Materiality and Risk Certain accounts must be audited 100% depending on how important they are and the potential errors that could be found. Accounts like Cash, Lines of Credit, and Intangibles are very important in this simulation, mainly because they are more liquid accounts and do not have as many transactions as other accounts. Other accounts have many transactions and can be too tedious to go threw a 100% audit like, Inventory, Accounts Payable, and Property, Plant, and Equipment. Cash is important because it indicates the liquid situation of the company at any given point of time. Lines of credit are the money that is owed to the company by customers for services rendered or goods sold. CLICK PURCHASE BUTTON TO DOWNLOAD COMPLETE TUTORIAL ACC 490 Week 3 Learning Team Assignment Assessing Materiality and Risk Simulation Get Tutorial by Clicking on the link below or Copy Paste Link in Your......

Words: 3366 - Pages: 14

Assessing Information Technology General Control Risk: an Instructional Case

...ISSUES IN ACCOUNTING EDUCATION Vol. 24, No. 1 February 2009 pp. 63–76 Assessing Information Technology General Control Risk: An Instructional Case Carolyn Strand Norman, Mark D. Payne, and Valaria P. Vendrzyk ABSTRACT: Information Technology General Controls (ITGCs), a fundamental category of internal controls, provide an overall foundation for reliance on any information produced by a system. Since the relation between ITGCs and the information produced by an organization’s various application programs is indirect, understanding how ITGCs interact and affect an auditor’s risk assessment is often challenging for students. This case helps students assess overall ITGC risk within an organization’s information systems. Students identify specific strengths and weaknesses within five ITGC areas, provide a risk assessment for each area, and then evaluate an organization’s overall level of ITGC risk within the context of an integrated audit. Keywords: internal controls; general control; ITGC; risk assessment. INTRODUCTION he Sarbanes-Oxley Act (SOX 2002) and the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 5 (PCAOB 2007) require that the organization’s chief executive officer (CEO) and chief financial officer (CFO) include an assessment of the operating effectiveness of their internal control structure over financial reporting when issuing the annual report. External auditors must review management’s internal control assessment as part of an annual integrated......

Words: 6299 - Pages: 26

Risk Management

...Risk Management Students Name Course Tutor Date Philosophy/Policy Statement Risk management is a process that involves risk assessment and a mitigation strategy for the risks. This means that identification of potential risk and evaluation of the impact of the risk is necessary. This is what is called risk assessment. A mitigation strategy is a plan that has designed and put in place to minimize the impact of the potential risk events or the adverse effects of a risk on a project. Risks in a project are unpredictable. Some are yet to happen, and some will not occur. This means that one has to get prepared to deal with any risks. The underlying philosophy of handling risk is avoiding, mitigating transferring and accepting. Avoiding means that if prevention of the happenings of the risk is possible, then that would be the best option. If it cannot be prevented or avoided, taking action so that the risk will do little harm to a project would be the other option known as mitigation. The other effective way is to pay another party to accept it. This is called transfer and are such as insurance. Lastly, if the risk cannot be solved by transfer, avoidance or mitigation then one has to accept it. This means you have to face the risk although have other alternatives when this happens. Needs Assessment Needs assessment in risk management is an essential process for any company. This is an important tool that helps in identifying the lapses in various areas of risk......

Words: 2823 - Pages: 12