Types and

Sources of Risks
GROUP 3

Business Risks
Economic Risks

PREPARED FOR: DR. SITI HALIZA BINTI ASAT

FACULTY OF ACCOUNTANCY | RISK MANAGEMENT AND CONTROL (MAF682) | D1AC220/7C

RISK MANAGEMENT AND CONTROL (MAF682)

Meet the group members

2019892028 2019252834 2019207964 2019422636 2019207484

MUNAWWARAH BINTI NUR ANIS AQILAH BINTI NURHANANI BINTI SYAZA NADHIRAH BINTI ANIISA ATHIRAH BINTI
HUSAINI MUHAMMAD ROSLAN DAUD SHAHARADIN MUHAMMAD EDRUS

D1AC220/7C
RISK MANAGEMENT AND CONTROL (MAF682)

BUSINESS
RISKS
MUNAWWARAH BINTI HUSAINI
NUR ANIS AQILAH BINTI MUHAMMAD ROSLAN
NURHANANI BINTI DAUD

D1AC220/7C
Business Risk
Definition
The risk that businesses confront as a result of the nature of their operations and goods is known as business risk.
If any business risk occurs in their organisation, small scale businesses may experience severe interruption.

Strategic Risk Product Risk

Definition
Risks arising from the possible consequences of
strategic decisions taken by the organization
Impact
The current state of COVID-19 has caused most businesses
to change the way they work (Work from Home).
Definition
Risk that customers will not use the services provided
and might affect demand level for the existing
services
Impact
If a new product is introduced to the market, it might
not meet client purchasing expectations.

Example Example
Growth by acquisition is riskier because it involves Due to a shortage of infrastructure that can support
other parties and could impact the company's the 5G requirement, the demand for (5G) mobile
mission and vision. communication services is so slow than anticipated
Business Risk
Commodity Price Product Reputation
Risk Risk

Definition Definition
The chance that commodity prices will change in a Threat or danger to the good name or standing of a
way that causes economic losses. business or entity.

Impact Impact
If product reputation risk is not address properly, it
This will result to the increase in price by the supplier
might shift customer loyalty to the business
to the users.
competitors.

Example
F&B industry that impacted by the increase of
commodity price (palm oil) might need to increase
the price of their product or adjust their business
strategy (reduce quantity, smaller packaging).
Example
If a car manufacturer announces that it is recalling
all new models of a car to rectify a design defect
(air bag, seat belt specifications) the product
reputation and its future sales might be affected.
Business Risk
Operational Risk
Definition
Risk that refers to potential losses that might
arise in business operations (the risk of losses
resulting from inadequate or failed internal
processes, or external events).
Impact
The risk can directly or indirectly impact the
financial situation in the organisation.
Example
Business around the world has face major
interruption during pandemic covid-19 with the
regulation and mandatory restriction on movement.
Most businesses unable to continue their operation.
Contractual Inadequacy
Risk
Definition
Risk that the terms of a contract do not fully
cover a business against all potential outcomes.
Impact
If the business did not consider this type of risks
before agreeing to build the house, there might
be quantifiable and unquantifiable of loss.
Example
A building company may have a fixed completion
date for the construction of a house. If it is not
completed on time, they may have to pay
compensation to the buyer.
RISK MANAGEMENT AND CONTROL (MAF682)

ECONOMIC
RISKS
SYAZA NADHIRAH BINTI SHAHARADIN

D1AC220/7C
 Economic Risk

DEFINITION FACTOR EXAMPLE IMPACT

Risk that resulted inflation changes in Government might
from changes in unemployment population in the impose control on
overall business rates country, resulted price mechanism such
condition. international trade in changes on as price ceiling and

relations target market price floor which
This risk is changes in fiscal population might impact business
external risk for policy decisions by profitability in the
the business which the government high inflation rate long run.
is uncontrollable. due to economic
instability
RISK MANAGEMENT AND CONTROL (MAF682)

WAYS TO
MITIGATE
ANIISA ATHIRAH BINTI MUHAMMAD EDRUS

D1AC220/7C
 Ways to Mitigate
BUSINESS RISK ECONOMIC RISK

Example
Lorem ipsum dolor sit amet, consectetur
adipiscing elit, sed do eiusmod tempor There is no way to predict everything that will
incididunt ut labore et dolore magna aliqua. happen. You can’t predict the weather, the
political climate, or many other factors, and those
all have an impact on uncertainty.

Buying insurance allows you to transfer your risk

to insurance companies for a small cost,
especially when compared to the potential cost of
uncovered risk
If you want to save capital by not having to hire an
outside firm, and there is time available, you can
appoint current employees to head a risk
management team. However, this would only be
wise if someone within the team has experience in
this area and can act as a leader.
Step back for a moment and revisit your current
business plan. Give yourself time to make
adjustments while considering your current
situation. Start your review by speaking with your
clients, studying your direct and indirect
competition, and speaking with stakeholders.
RISK MANAGEMENT AND CONTROL (MAF682)

THANK
YOU LET'S MOVE
for your time and listening to
our presentation ........
ON TO THE
Q&A SESSION

GROUP 3 D1AC220/7C