Question

please help answer all

1. Road Runner Ltd is a lawn mowing and gardening business. The workers have been attacked by guard dogs in the past resulting in injured workers and increased medical costs for the company. Road Runner Ltd now refuses all lawn mowing or gardening contracts where the client has a dog. The firm’s risk exposure to this source of cost is what and why?

2. Papa Smurf Ltd does home remodeling and repair. The firm hires sub-contractors to do the installation of drainage pipes because there are often problems with the installation resulting in leaks when it rains and also the materials themselves often require costly post-installation services. The firm’s risk exposure to this source of cost is what and why

3. If available, a 3.3% discount for payment within 10 days instead of 30 days represents an approximate savings of what % annually?

4. . A control procedure designed so that the employee that records cash received from customers does not also have access to the cash itself is an example of what sort of control?

5. One way managers estimate the value of internal controls involves expected loss. What is the mathematical equation to demonstrate this expected loss and what is the value of a control procedure when involving expected loss?

6. To help strengthen internal controls no employee should be given too much responsibility. In terms of accounting duties these segregation of duties should cover three (3) main functions. Describe these functions and provide examples of each.

7. In terms of a disaster recovery plan to restore an organization’s IT function in the event that its data center is destroyed please explain the difference between a cold site, a hot site, and a second data center.

Answer 1

ANSWER

a,Risk is actually defined as variation or changes that occur what they expect.In this it is peraonal   loss exposure the fianical exposure of all exposure are ultimately borne by people in this case an organization(Road runner ltd) also experience loss that will directly affect employess of the company .medical cost also reponsible for company.source of cost of compnay is incresed but this we can included on accidental risk that the way we can claimed for registered orgainzarion all the governments gave all options for this overcome these types consquences that should overcome for a running companies.if the insurance coverage for workers is so relaxable for company

a,The second situation is included in property loss exposure or its come under property pure risk the organization faces any possibilty of both direct and indirect losses.In this cases company need more workers for reinsallation and also by rain(risk of nature) they need post instalation also if they have insurance coverage for the propertythe firm can use this option.

a,Providing cash discounts when we calcualted 1%10 net 30,that means there is 1% discount there for total amount

a,Many companies have customers can send payments directly to the bank instead of dirct payemnt all organization have many specific producers for controlling cash reciepts, and they prepare record of all cash reciepts as when they cash recived cash and controlling and monitoring credit are the part of sort of control

a,The internal control helps ensure investment and measued at fair value.

Expected loss EL=PD*LGD*EAD=PD*(1-RR)*EAD

PD=Proability of default EAD

LGD=loss given default EAD

RR=Recovery Rate

RR(1-LGD)

a, The segration of duties means or it a concept assignment of responsbility of one person for assets acquistion,their custody and the related record keeping

aThe major difference thta reflect between hot and cold sute is readiness to be up and running. we have recent backup of data with us while operating IT systems the hotsite manage redundancy and is essentially second data center that will result in minimal to no downtime.