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In management accounting or managerial accounting, managers use accounting information in decision-making and to assist in the management and performance of their control functions.
A time control is a mechanism in the tournament play of almost all two-player board games so that each round of the match can finish in a timely way and the tournament can proceed. Time controls are typically enforced by means of a game clock, where the times below are given per player. Time pressure is the situation of having very little time on a player's clock to complete their remaining moves.
Broadly speaking, a risk assessment is the combined effort of:
- identifying and analyzing potential (future) events that may negatively impact individuals, assets, and/or the environment ; and
- making judgments "on the tolerability of the risk on the basis of a risk analysis" while considering influencing factors.
An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon.” Auditing also attempts to ensure that the books of accounts are properly maintained by the concern as required by law. Auditors consider the propositions before them, obtain evidence, and evaluate the propositions in their auditing report.
In finance, valuation is the process of determining the present value (PV) of an asset. In a business context, it is often the hypothetical price that a third party would pay for a given asset. Valuations can be done on assets or on liabilities. Valuations are needed for many reasons such as investment analysis, capital budgeting, merger and acquisition transactions, financial reporting, taxable events to determine the proper tax liability.
In accounting and in most schools of economic thought, fair value is a rational and unbiased estimate of the potential market price of a good, service, or asset. The derivation takes into account such objective factors as the costs associated with production or replacement, market conditions and matters of supply and demand. Subjective factors may also be considered such as the risk characteristics, the cost of and return on capital, and individually perceived utility.
In finance, systemic risk is the risk of collapse of an entire financial system or entire market, as opposed to the risk associated with any one individual entity, group or component of a system, that can be contained therein without harming the entire system. It can be defined as "financial system instability, potentially catastrophic, caused or exacerbated by idiosyncratic events or conditions in financial intermediaries". It refers to the risks imposed by interlinkages and interdependencies in a system or market, where the failure of a single entity or cluster of entities can cause a cascading failure, which could potentially bankrupt or bring down the entire system or market. It is also sometimes erroneously referred to as "systematic risk".
A performance indicator or key performance indicator (KPI) is a type of performance measurement. KPIs evaluate the success of an organization or of a particular activity in which it engages. KPIs provide a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most.
Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institutions, such as insurance companies, pension funds, corporations, charities, educational establishments, or private investors, either directly via investment contracts or, more commonly, via collective investment schemes like mutual funds, exchange-traded funds, or REITs.
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is an organization that develops guidelines for businesses to evaluate internal controls, risk management, and fraud deterrence. In 1992, COSO published the Internal Control - Integrated Framework, commonly used by businesses in the United States to design, implement, and conduct systems of internal control over financial reporting and assessing their effectiveness.
The residual risk is the amount of risk or danger associated with an action or event remaining after natural or inherent risks have been reduced by risk controls.
Audit risk as per ISA 200 refers to the risk that the auditor expresses an inappropriate opinion when the financial statements are materiality misstated. This risk is composed of:
In the chemical and process industries, a process has inherent safety if it has a low level of danger even if things go wrong. Inherent safety contrasts with other processes where a high degree of hazard is controlled by protective systems. As perfect safety cannot be achieved, common practice is to talk about inherently safer design. “An inherently safer design is one that avoids hazards instead of controlling them, particularly by reducing the amount of hazardous material and the number of hazardous operations in the plant.”
Financial Management for IT Services is a Service Strategy element of the ITIL best practice framework. The aim of this ITIL process area is to give accurate and cost effective stewardship of IT assets and resources used in providing IT Services. It is used to plan, control and recover costs expended in providing the IT Services negotiated and agreed to in a service-level agreement (SLA).
A job safety analysis (JSA) is a procedure which helps integrate accepted safety and health principles and practices into a particular task or job operation. In a JSA, each basic step of the job is to identify potential hazards and to recommend the safest way to do the job. Other terms used to describe this procedure are job hazard analysis (JHA), hazardous task analysis (HTA) and job hazard breakdown.
Information technology risk, IT risk, IT-related risk, or cyber risk is any risk related to information technology. While information has long been appreciated as a valuable and important asset, the rise of the knowledge economy and the Digital Revolution has led to organizations becoming increasingly dependent on information, information processing and especially IT. Various events or incidents that compromise IT in some way can therefore cause adverse impacts on the organization's business processes or mission, ranging from inconsequential to catastrophic in scale.
ISO 26262, titled "Road vehicles – Functional safety", is an international standard for functional safety of electrical and/or electronic systems that are installed in serial production road vehicles, defined by the International Organization for Standardization (ISO) in 2011, and revised in 2018.
IT risk management is the application of risk management methods to information technology in order to manage IT risk, i.e.:
Risk-based internal audit (RBIA) is an internal methodology which is primarily focused on the inherent risk involved in the activities or system and provide assurance that risk is being managed by the management within the defined risk appetite level. It is the risk management framework of the management and seeks at every stage to reinforce the responsibility of management and BOD for managing risk.
Time at Risk (TaR) is a time-based risk measure designed for corporate finance practice.
References
- ↑ Gregory Monahan (2008). Enterprise Risk Management: A Methodology for Achieving Strategic Objectives. John Wiley & Sons. ISBN 9780470372333.
- ↑ Rachel Slabotsky (7 September 2017). "Inherent Risk vs. Residual Risk Explained in 90 Seconds". www.fairinstitute.org. FAIR Institute. Retrieved 10 October 2018.
Inherent risk represents the amount of risk that exists in the absence of controls.
- ↑ Rachel Slabotsky (7 September 2017). "Inherent Risk vs. Residual Risk Explained in 90 Seconds". www.fairinstitute.org. FAIR Institute. Retrieved 10 October 2018.
Inherent risk is current risk level given the existing set of controls rather than the hypothetical notion of an absence of any controls.
- ↑ Jack Jones. Measuring and Managing Information Risk: A FAIR Approach. FAIR Institute.
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