Enterprise Risk Management in Managerial Accounting

The video tutorial discusses managerial accounting's role in identifying and managing risks. It explains that companies use specific controls to reduce risks, not eliminate them. An example of an Internet server company is used to illustrate risk mitigation strategies, such as having backup servers to limit potential risks.

What is the primary focus of managerial accounting in the context of risk management?

• To increase company profits

• To identify and manage potential risks

• To reduce employee turnover

• To eliminate all risks

What is the most common tactic used in risk management?

• Avoiding all risks

• Reducing risks by implementing controls

• Increasing risks for higher rewards

• Ignoring potential risks

Which statement is true about enterprise risk management?

• It increases risks to test company resilience

• It completely eliminates all risks

• It only identifies risks without managing them

• It reduces but does not eliminate risks

In the example of an Internet server-based company, what is a suggested method to mitigate server failure risk?

• Increase server load

• Have a backup server

• Ignore the risk and hope for the best

• Reduce server capacity

What is the purpose of having a backup to the backup server?

• To reduce costs

• To increase server speed

• To ensure continuous operation in case of multiple failures

• To eliminate the need for regular maintenance