One Category of Risks That Are Considered in an Enterprise

question 14

Multiple Choice

One category of risks that are considered in an enterprise risk management program is risks that are external to the organization.Such risks include demographic trends,acts of competitors,and industry sector trends.This risk is

• A)systems risk.
• B)strategic risk.
• C)operational risk
• D)hazard risk.

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Definitions:

Owned Subsidiary

A company whose majority of shares is held by another company, making it controlled by the parent company.

Intra-entity Gross Profit

Profits arising from transactions within the same entity, requiring elimination during the consolidation process to avoid overstatement of revenues.

Consolidation Process

The method by which a parent company combines its financial statements with those of its subsidiaries to produce a single set of financial statements representing the entire group of companies.

Voting Common Stock

Shares that grant the shareholder the right to vote on corporate policies and board elections.