financial risk assessment
TRANSCRIPT
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Audit I Assurance I Legal I Fintech I Regulatory I Digital
FINANCIAL RISK ASSESSMENT
India # 1150+ In-house CA
& Lawyers
When you are dealing with finances,
conducting a financial risk assessment
should not be considered just an option but
it should be a necessity. Such risk can be
estimated before they develop into
presenting a material risk to an
organization.
ABOUT FINANCIAL RISK ASSESSMENT
Financial Risk Assessment is a process
which involves established policies and
protocols that helps in identifying,
evaluating and addressing financial risks
that the company faces. The financial risk
assessment would mean diving deeper into
the financial preparedness of the company.
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OCCURRENCE OF FINANCIAL RISK ASSESSMENT
Every Organization should conduct financial risk assessments on an annual
basis and if possible they can do on more frequent basis. However experts
believe that such assessment should be performed prior to making any new
financial deals or acquisitions.
TYPES OF FINANCIAL RISK
Market Risk
Absolute Risk
Basis Risk
Credit Risk Liquidity Risk Operational Risk
Credit Event
Settlement Risk
Asset Liquidity Fraud Risk
Model RiskRelative Risk Sovereign Risk Funding Liquidity
Legal Risk
BENEFITS OF FINANCIAL RISK ASSESSMENT
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Will help the client in making better financial
decisions in future
Help in developing a risk profile for clients
and will dictate the clients’ asset allocation
and investment strategy
Raise the confidence in the relationship with
the organization or the financial adviser
BENEFITS FOR CLIENTS
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Help in developing a proper financial plan
Will build Trust and develop the relationship
with the client
The risk assessment will provide documented evidence in case of a
dispute in future
Help in getting a detailed picture of clients’ risk
BENEFITS FOR ASSESSING ORGANIZATIONS
OTHER BENEFITS
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Prepare for growthProfitability
Build a strategic plan
Provides great platform for decision making
Get clarity on what is working and what’s not
PARAMETERS USED IN FINANCIAL RISK ASSESSMENT
ATTITUDE TO RISK
TOLERANCE FOR RISK
CAPACITY FOR RISK
It measures the understanding of the clients
about risk and how it applies to their life and
financial matters.
This helps in exploring how much volatility a client
can absorb and observe over the lifetime of an
investment based on past experience and future
expectation.
This quantifies the clients’ ability to absorb a loss
or their rate of change in financial circumstance
if a large gain or loss was the outcome of an
investment.
FINANCIAL RISK ASSESSMENT PROCESS
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IDENTIFY RISK ASSESS RISK
DELEGATE MANAGEMENT
STEPS
MONITOR PROGRESS
CONSEQUENCES OF NOT CONDUCTING FINANCIAL RISK ASSESSMENT
Create Negative Reputation
Failure To Thrive
Product Or Project Failure &Loss In Profit-making
Opportunities
Catastrophic Losses
Improper Usage Of Funds
Create Lack Of Transparency
ROLE OF AI IN FINANCIAL RISK ASSESSMENT
With Manual data entry, errors may take place in accounting. In
such case Finance and internal audit teams cannot be blamed.
Outdated auditing tools and random sampling will not be able to
keep up with the increasing amount of financial data being
processed by companies.
If a company fails to analyze every transaction in a dataset, risks
will go undetected. Therefore AI auditing software is an
indispensable solution for CFOs. Many are realizing how AI can
complement internal audit methodologies and help their teams
quickly identify risks across all their financial data.
With the help of AI solution, there are various interesting ways to
leverage the technology beyond what people might understand.
KEY AREAS OF FOCUS IN FINANCIAL RISK ASSESSMENT PROCESS
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• What is working
and what isn’t
working?
• Systems,
processes, and
people
• Is the right
groundwork in
place for decision
making?
• What financial
risks do you
currently face?
• Is your company
prepared for
growth?
• What is your
company’s
profitability
status?
• Are you ready to
spot and take
advantage of
opportunities?
• Strengths and
Weaknesses
WHY ENTERSLICE?
Presence in 22+ Countries https://enterslice.com/contact-us
6 Offices in India – all Metro cities
300+ Team in India + 500 CA Firm under Umbrella of Enterslice – Total Strength 1500+
50,000+ Clients served globally
20+ Years of Experience Globally
CONTACT ENTERSLICE
9870310368 (Mobile)
9810688945 (WhatsApp)
www.enterslice.com
B-78, Sector 60, Noida Uttar Pradesh 201301, India
