Chapter 12 - Risk management Flashcards
Why would a business incur risk?
Generate higher returns and be competitive
Returns from activities will be higher
Benefits can be financial
Gain a competitive advantage
What are the categories of risk?
Political, legal and regulatory
Business risk
Economic risk
Financial risk
Technology risk
Environmental risk
Corporate reputation risk
Fraud and employee malfeasance risk
International risk
What is a business risk?
Risk businesses face due to the nature of their operations and products
What is risk management defined as?
The process of understanding and managing the risk that the organisation is inevitably subject to in attempting to achieve its corporate objectives
What is included in the accountancy professions public?
Clients
Credit providers
Government
Employees
Employers
Investors
What are some initial costs of information systems?
Costs to design and develop system if software is bespoke
Purchase price of software if it is not bespoke
Purchase cost of new hardware
Cost of testing and implementation of the new system
Training costs
What are the running costs of an information system?
Cost of labour time to run the system
Cost of materials e.g. replacement parts
Cost of service support e.g. IT helpdesk
What are the risks to a compute system?
Dissatisfied employees might deliberately modify or destroy information in the system
A hacker or industrial spy might break into the system
Viruses or malicious software could be introduced
Accidental mistakes could be made on input to the system
Inadequate security of the hardware or data
Faults in the hardware system
What is big data?
Big Data is a term for extremely large collections of data that may be analysed to reveal patterns, trends and associations
What are the risks associated with big data?
Skills to use systems not always available
Security of data
Time spent measuring relationships that have no organisational value
Poor veracity leading to incorrect conclusions
Cost of establishing hardware and analytics software
Technical difficulties integrating Big Data systems with current systems
What are the four V’s representing the defining characteristics of Big Data?
Velocity
Volume
Variety
Veracity
