Inefficient use of resources
Incurring expenses that could be avoided or reduced
E.g. Hiring an additional contractor in the finance team, when this could have been avoided by re-allocating tasks internally
Misappropriation of assets
Theft or misuse of company assets (cash and others)
People
Employees are not properly trained and don’t know how to perform their tasks
The controls that reduce these risks to an appropriate level are the responsibility of the finance team
Other than FS risk, the finance function has a few other key risks
1 – Inefficient use of resources
-Expenses that could be avoided or reduced
2 – Misappropriate – theft or misuse
3 – People – employees aren’t trained properly and do not understand how to perform their tasks
Controls that reduce these risks to an appropriate level are the responsibility of the finance team