Factors contributing to Business Risk
The improper infrastructure of the annual financial report is the cause of the business risk which can result in failure of the business. The business risk is mainly resulting from the imbalance financial record of the business. By submitting the sincere financial report, the poor standard of the business can be improved. The improvement of the annual economic report is based on the actual statement of the material, but the misstatement of the material can be a cause of the business risk. According to the auditor's lack of professionals can be a cause of the business risk. The collapse of the HIH Insurance Limited is the effect of disproportion of the annual report, and the have-not's structural support of the report produces the unfair judgments to the business so it can be a cause of the business risk (Abbott, Pendlebury and Wardman, 2013). When the payment is collected from the clients by the company for a long time, then it required some skilled workers who produce the shortage of money for the company the can be a reason of the business risks. Through the explanation of the factors, it is clear that this matter is responsible for the business risks. The failure of the business is conducted by the issues of the politicization. The politicization also has an impact on the development of the business. The politicized situation appropriately shows the development of the debt leverage and the HIH Insurance Limited has to face the politicized situation. The dangerous conditions of the business are described by the annual finance report (Allison and Prentice, 2009). The growth of the risk is briefly demonstrated by the illustration of the credibility of the statement. These factors are leading the company to face the business risk.
The risks of the development of the budget categories the level of the risks of the financial report of the HIH Insurance Limited which can be a factor affecting the policies of the HIH Insurance Limited. The lack of appropriate ethical guidelines and the absence of proper insurance policies, the increasing budgets become fall which can be a major risk factor that is affecting the HIH at finance report level. The removal of the risk factors of the HIH Insurance Company it is necessary to separate the individual based licensed investment which can be dangerous for the growth of the business finance report. The establishment of the risk is clearly shown by the increasing of the risk factors (Chen-Wishart, 2015). The appropriate figure of the work signifies the establishment of the individual licensed investment rates. Many legal issues between the creditors and the clients can also be affecting factor oh the business risks. The proper protocol of the work and the individual investment shows a stability of the accounting theory of the business. The asset replacement or the sudden death of the client can be a factor affecting HIH at the financial report level. The necessary of dedicated employees in the company because most of the times the shortage of professional and well-experienced members can also be major trouble for the company which affecting the annual financial report level (Dauber, 2005). If suddenly any client denies continuing their insurance, then it will be very much affecting for the development of the company.
Risks of Development of Budget Categories
The management was responsible for the collapse situation of the HIH Insurance Company. Due to the insufficient response to the demand of the International Insurance Market is also a reason for the collapse of the HIH Insurance Company. The availability of the fake statement affects the interests of many stakeholders and shareholders. The unfair representations of the financial declarations of the company are the result of the unconsciousness of the board of director. The high balance leverage and the insurance burden can be demonstrated by the financial report of the company. The company has to face many unsolvable risks because of the high level of the balance (Duxbury, 2015). The false representation and the fake financial statement is happening due to the irresponsibility of the accountant and the auditors.
Clients: Due to the failure of the company the group of people who were related to the partnership with the company has to suffer from massive losses. The management of the company presented a fake financial report, so they are responsible for the business failure. This event forced the clients to an extent loss. The clients cover their loss amounts by taking legal actions against the company.
Creditors: The borrowed money from the creditors and the payments of the credit amount is one of the responsibilities of the management. When the management of the company becomes unable to pay the due amount of money to the brokers and the other creditors, then they can take legal action against the company and can ask for their due amount of money (Engdahl, 2011).
When any person is obligated to another then the loss, damage or injuries can happen to someone else. The plaintiff suffers an injury or damage for the braking of duty by the defendant. The breakage of the duty can be a reason of the damage or the injury. The accountants and the auditors conduct the negligence act for the breakdown of the HIH Insurance Company (Gillies, 2004). The occurrence of the injuries and the harm can be avoided legally by the proper duty of care. The breach of the duty of care is analyzed and determines by the court through demonstrating the review of standard of care. The failure of the company is caused by the unfairly presented financial statement of HIH Insurance Company.
It is very clearly that from this occasion of the particular company the HIH obliviously does not give the stand for the rigid framework approved by the government of Australia and some for this of the reason of the organization had to take some of the unkind decision. Governmental system of the company needed to some of those dig up for the argumentation of some business system. The external audit team of the former member wanted to be re-hiring in the HIH. Formation of a project and reformation of some unreasonably enhanced (Horngren, 2013). It was the only thing that the companies needed to join the employees from some economic team because of making a good performance, and proper construction of any work can be depicted by some of the enhancement of any works completed together mainly by the company. Rather it is naturally that some of the duration of such confusion in the building of some work, therefore regarding his duties altogether towards the company has blamed for inappropriate performances.
Impact on Clients and Creditors
Due to the changing of the whole auditing group while with some new team comprising of the older employees that some of the amounts can be easily featured the work done by the exact amount. HIH organization is an original depiction of the sum of some work done by some easily illustrated by the report of the primary thing that had occurred some of the alternation. Performance and allowing of some correct decisions of that research are to be further advantages of the company (MacIntyre, 2016). The balancing which is very necessary to maintain some of the organization again after again because of some process of re-establishment of the planning. More emerging that like some stable structures in mainly of work ethics of the company that has some gaping occurred in the stability of the enterprise. This led to an expansion of gaining in the organization in a large way. Presenting some financial accounts to the governmental authorities for they have presented many incorrect statements to the some of the legislative that are the older auditors breached that showing off some profit and loss some balance sheet expenditure in the financial system of the company (Oppermann, 2009). So the opening of the original group of accounts who were firstly appointed with fresh and some legalized business outlook planning and economic accounting department.
It is considered that any illegal meaning some of the adaptation of representation in any faulty financial accounting that illicit inflow or outflow of money that illegal in any of the description of expenditure in any of the gaining or loss property and liabilities. The government of Australia in some of the unlaw full and standard laws regarding in the practical ethics of the organization. Reprovingly with some case of studies of HIH company had some debased with these ethical standards. The Board of Directors along with the auditors guilty of producing with unfair financial statements (Ruff, 2014). According to the government of Australia business with some ethics deals with some fair and unjust means in that of the organization regarding in the financial accounting of organization and it is a vital aspect of an organization. Hence, it was very clearly that the company tarnished some of the images and after of that affected in the interest to many of the people in that organizations. While in the rules and systems are only defines for some well being in the company so this leading of the declination of the enterprise. Regarding some running guidelines some business or some organization is firmly and breaching to any one of them is accountable punishable of some offense (Ruppel, 2015). The Board of Directors, as well as the auditor, is carrying out some specific duties in a lack of some integrity and negligence.
Representing some provide clear concepts will always legislation and in no other ways cannot be breached. Financial declaration of the individual company and an organization of the company give some real regularity. As per as the government authorizing rules in the both outputting and inputting cases of the enterprise, but if these lines of actions are breaching in anyone but they are to be blamed for failing in some of the eliminating in the false statements found in the financial accounting. This only led to the downfall of the HIH Company (Schroeder, Clark and Cathey, 2011). Rules and regulations are only meant for the well-being of the company. Hence, it was very clear that the proper image of the company was tarnished and this affected the interest of many people in the organization. The equilibrium that was necessary to maintain as a body was once again in the process of restoration due to this strategy. Previously, the old auditors had breached many of the laws in presenting the financial accounts to the legislative authorities as they have presented many broken records that had shown incorrect profit and loss, income, expenditure and balance in the finance system of the company (Tracy, 2013).
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