You are a manager in Costello, a firm of Chartered Certified Accountants, which has recently adopted a business risk methodology. You have been involved in briefing clients about this 'top-down approach' and promoting the risk management assurance services which Costello offers. The following information concerns one of your clients, Ferry, a limited liability company.
In July 202X, Ferry purchased exclusive rights to operate a car and passenger ferry route for ten years until December 203X. This offers an alternative to driving an additional 150 kilometers via the nearest bridge crossing. There have been several ambitious plans to build another crossing, but they have so far failed through lack of public support and government funds.
Ferry refurbished two 20-year-old roll-on, roll-off ('Ro-Ro') boats to service the route. The boats do not yet meet the emission standards of Environmental Protection Regulations which come into force in early 202Y. Each boat makes three return crossings every day of the year, subject to weather conditions, and has the capacity to carry approximately 250 passengers and 40 vehicles. The ferry service carried just 70,000 vehicles in the year to 31 December 202Y (202X: 58,000; 202W: 47,000).
Hot and cold refreshments and travel booking facilities are offered on the one-hour crossing. These services are provided by independent businesses on a franchise basis. Ferry currently receives a subsidy from the local transport authority as an incentive to increase market awareness of the ferry service and its efficient and timely operation. The subsidy increases as the number of vehicles carried increases and is based on quarterly returns submitted to the authority.
Ferry employs 20 full-time crew members who are trained in daily operations and customer service, as well as passenger safety in the event of personal accident, collision or breakdown. The management of Ferry is planning to apply for a recognized Safety Management Certificate (SMC) in 202Z. This will require a ship audit including the review of safety documents and evidence that activities are performed in accordance with documented procedures. An SMC valid for five years will be issued if no major non-conformities have been found. Your firm has been asked to provide Ferry with a business risk assessment (BRA) as a management assurance service.

Required:
(a) Identify and explain the business risks facing Ferry which should be assessed.
(b) Describe the processes by which the risks identified in (a) could be managed and maintained at an acceptable level by Ferry.