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Assignment On Auditing And Assurance (Doc)

   

Added on  2020-04-01

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1Auditing And AssuranceName:Course Professor’s nameUniversity nameCity, StateDate of submission

21.0Business Risk Assessment1.1 Summary of client backgroundSeven west Media Ltd is a listed company in the ASX and is one of the largest diversified media business in Australia. The company was formed after West Australian Newspapers acquired Seven Media Gruop. The company has dominance in the media industry, having a leading presence in radio, television broad cast, online and magazine publishing as well as newspaper publishing(Advanced audit and assurance, 2013). The company has grown to be the largest commercial television network in Australia and is still making moves to create value to its shareholders by merging and acquiring various companies to boost its bottom line. The companyannounced that it intends to merge with West Australian Newspaper Holding Ltd (WAN) in a bid to increase its market share(Audit and assurance services (UK), 2007).1.2 Business Risks Companies face all kinds of risks, some are likely to cause serious losses or even bankruptcy. Seven media Ltd has put up departments that deal with risk management. The following are the risks that Seven West Media Ltd faces in the environment that it is operating under.Strategic Risk

3In a world where changes are occurring everyday that may affect the business, it is important for a business to have proper and well laid plans that may counter technological changes, new mediacompanies entering the market, shifts in customer demand and changes in price of raw materials.This is why Seven West Media Ltd has been merging and acquiring other companies to minimize this risk(BPP LEARNING MEDIA., 2017).Compliance RiskLaws change all the time and there is always a risk that a company will be required to comply with additional laws and regulations in future. The company should ensure that it complies with all the necessary laws of the land because it may risk closure. Being a company that is listed in the Australian Stock Exchange, the company faces numerous laws for its shares to be traded in the bourse. Australia has put in place many laws to regulate the media industry and others laws are still being made, thus the company faces the risk of not complying with new laws of the land.The company still faces compliance risk by expanding the product line(Audit and assurance (United Kingdom), 2012).Operational RiskThis is an internal risk that stems out of the company’s day to day operations. The failures of the company, for example, server outage, machine break down, technical failure, people and processes are all forms of operational risks. For a media company, such failures can result to huge losses in terms of profits and market share. In some instances, operational risks may stem

4out from events that are out of control by the company such as power cut, natural disaster or even a problem with the company’s website host. This is why the company needs to put in place measures that may mitigate against this type of risk(Bagshaw, n.d.).Financial RiskThis is type of risk refers to the money flowing out and into the company and the possibility of loss of finances(Graham, 2008). For example if a substantial part of the company’s profit coming from one stream and debts from the financiers. 1.3 Business risk industrial levelBusiness risks can be included within the strategic risks of an organization. Strategic risks are risks that arise from the strategic position that the organization takes in the environment in whichit develops its activity, therefore they have a double source: on the one hand the own strategic decisions that the organization takes and on the other the environment in that these decisions materialize. In that sense, we can distinguish business risk fro economic risk(Mesa Graziano and Holtzman, 2005).1.4 Business risk economy levelBusiness Risks: Risks of strategic decisions about products and services or about the organization itself.Non-business risks: External risks arising from the organization's environment, for example from competitors, regulators, public authorities, society,

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