Accounting Risk Responses and Financial Statement Analysis Report

This accounting report provides an analysis of risk responses related to financial losses, oil price fluctuations, and logistical challenges. It emphasizes the importance of adhering to accounting principles, conducting thorough market analysis, and exploring alternative transportation methods to mitigate risks. The report suggests creating provisions for potential losses, performing competitor analysis to understand raw material prices, and considering air transportation to reduce accidents and financial risks. It also references scholarly articles on topics such as the Socratic method, CSR disclosure, shareholder activism, and regulatory unreasonableness.

Administrator
ACCOUNTING
ASSIGNMENT

Name of the Student:
Date: 30th November 2018
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Table of Contents
Analysis...................................................................................................................... 2
References................................................................................................................. 5
Analysis
Risk Responses
1.In case of financial losses due to legal provision the financial statements of the companies have
been overstated that is reflected from the high revenues that the company is showing in the
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current period in comparison to the past year. So, it is important that company should follow the
accounting principles in framing the accounting statements of the company and apply the
concept of materiality in framing the financial statements of the company. The auditors should
analyze the profits of the company and should see that correct position of the company should be
reflected by the financial statements and same should be stated in the audit report of the company
(Cundill, Smart, & Wilson, 2017).
2.To analyze the same the company needs to study the overall past trends of the oil prices and
should study the overall fluctuations in the same. It is important to understand that the prices
have considerable effect on the prices of the raw material. Trend analysis is an important part
that would help in reduction of losses. Hence to reduce the operational loss caused by this,
provisions can be created by the company and aim should be that effective market analysis
should be done. Competitor analysis can also be conducted to understand the overall flow of the
prices of the raw material (Charles H, Giovanna, Dennis M, & Robin W, 2015).
3. The third risk that the company faces are with relation to the transportation of the products
through various ways like ship, rail or truck etc. So that has led to delay in the logistics of the
company and has affected the company very badly. In the given case the company can try to use
such third-party services for transportation of the products so that will lead to reduction in the
accidents that has been caused. But since we know that logistics outsourced causes a lot of errors
on part of the company (Kaufmann, 2017). So, to solve this risk, they should use transportation
through air, as that would help in reduction of the accidents in many ways. The company faces a
lot of financial risks due to this and thus to get over the same they should take steps through
effective research and analyze (Boghossian, 2017).
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References
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Boghossian, P. (2017). The Socratic method, defeasibility, and doxastic
responsibility. Educational Philosophy and Theory, 50(3), 244-253.
Charles H, C., Giovanna, M., Dennis M, P., & Robin W, R. (2015). CSR disclosure: the
more things change…? Accounting, Auditing & Accountability Journal, 28(1),
14-35.
Cundill, G., Smart, P., & Wilson, H. (2017). Non‐financial Shareholder Activism: A
Process Model for Influencing Corporate Environmental and Social
Performance. International Journal of Management Reviews, 20(2), 606-626.
Kaufmann, W. (2017). The Problem of Regulatory Unreasonableness (First ed.). New
York: Routledge.
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