FM-Week 9- Management accounting and Risk management

The role of management accounting does not normally include the function of

• cash management

• planning and control

• decision-making

The role of financial management does not usually include responsibility for

• risk management

• corporate finance

• compliance with accounting standards

...... helps to classify, analyze, summarize, and record financial transactions of the company.

• Financial accounting

• Cost accounting

• Management accounting

...... is the art and science of recording, classifying, summarizing, and analyzing costs to help management make prudent business decisions.

• Financial accounting

• Cost accounting

• Management accounting

...... collects, analyses, and understands the financial, qualitative, and statistical information to help the management make effective decisions about the business.

• Financial accounting

• Cost accounting

• Management accounting

Financial risks associated with the possibility of default by a counter-party.

• Credit risk

• Liquidity risk

• Interest risk

• Foreign exchange risk

The financial risks that arise because of possible losses due to changes in future market prices or rates.

• Credit risk

• Liquidity risk

• Market risk

• Financing risk

The risk refers to uncertainty regarding the ability of a firm to unwind a position at little or no cost, and also relates to the availability of sufficient funds to meet financial commitments when they fall due.

• Credit risk

• Liquidity risk

• Market risk

• Financing risk

The financial risk affects an organization’s ability to obtain ongoing financing.

• Credit risk

• Liquidity risk

• Market risk

• Financing risk