You are thinking about starting your own business in a field that interests you. You have been

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Question:

You are thinking about starting your own business in a field that interests you. You have been talking about it with your former internal auditing professor who is a very wealthy (as a result ofa mega-lottery win) but cautious business person. While you were describing what you had in mind, she said: "All businesses must have objectives. All businesses also have risks and controls to reduce the likelihood and impact of those risks. I would like you to tell me what your objectives are for your business. I also want to know what you see as the most likely risks and what controls you should have in place to mitigate those risks."She wants to be sure that you have thought things through and has asked you to prepare a proposal that includes a brief description of your prospective business and your thoughts about your covering the areas she mentioned. She has asked you to come back to her with your written proposal and so that you can have a meaningful discussion about funding the start-up of your business. Since you were unsuccessful at getting bank financing, you have decided to do what she has asked.

Required:

Describe your business and its operational business objectives.identify at least ten different significant risk eventsto explain your impact and likelihood ratings.

Perform a risk ranking and specify the type of risk response strategy you will adopt.

Develop Risk Map

Describe how the mitigation activity will reduce the residual risk to an acceptable level. For example, if you decide to share the risk with a business partner, you would be responsible for one-half of the financial costs of the risk. If your mitigation is a control activity like storing inventory in a locked area,you are taking steps to prevent theft of inventory. Should you decide to accept or avoid the risks, be sure to explain those decisions. In your list of risks and controls, including those that are specific to your business as well as those that are common to many/all businesses ( omit financial accounting issues).