Inherent risk Essay Example | Topics and Well Written Essays - 1500 words

Inherent venture - quiz ExampleThe impact of this on the total shareholdings needs to be independently addressed by the auditors.Undervaluation of shares The wariness believes that the shares of the Company have been undervalued and hence has reduced the holdings on 30.6.2007 by buying back 5.2.Million Shares valued at $9.3m. (Speciality Fashion Group one-year Report. 2007. P. 8). Its impact on the present holdings needs to be reviewed by auditors.climatic Risks that impinge upon Co.s business It is seen that the Company, which specializes in womens garments has had lowered business trends during the winter months, especially the peak Christmas season. Moreover the unhomogeneous seasonal competitions has also slackened business prospects.Risks associated with the rapport and reliability of key employees The management functions as a close knit operational team and decisions are made on consensus. Although the members of the team are noblely motivated, affiliated and dependable , there are always risks of management employees attrition, for better prospects and higher positions. This could be perceived as an integral risk in this CompanyRisks Risks associated with need for strategic growth The womens garment industry in Australia and unexampled Zealand are the main areas of marketing focus by this Company. There is always a dormant risk that customer preferences and tastes may change, due to conspicuous changes in fashion industry needs and competitive environment, in which the Company operates. Although the Company has designed garment wear for all age groups, income stratas and lifestyles, the inherent risks of a high degree of fashion obsolescence cannot be ruled out, which could affect demand for the products and cost of carrying inventories. Supply Chain attention risks and strategic vendor relationships The Company presently has 784 locations situated in Australia and New Zealand. (Speciality Fashion Group Annual Report. 2007. P. 10). Many more st ores are going to be opened to future to cater to the increasing backup and it is necessary to have the necessary efficient logistics in place so that all the stores are head stocked with stocks at all times. It is therefore a test for the supply chain management systems in operation to build up efficiency and prompt dispatches and also have excellent vendor net so that goods are speedily replenished and restocked at all locations. The inherent risks arise when, due to failure of the system, tell supplies are not available on demand, which could reflect upon the reordering systems in vogue.