An exposure consists of the potential financial effect on an event multiplied by its probability of occurence. An exposure is a risk times its financial consequences.
* Excessive Costs
- Reduce profits.
- Every expenditure made by an organization
is potentially excessive.
* Deficient Revenues
- Reduce profits.
- Bad debts expense on credit sales may be
excessive.
* Loss of Assets
- Assets may be lost due to theft, acts of
violence or natural disaster.
- An organization has custody a large
quantity of assets, all of which are subject
to loss. Assets may be lost unintentionally.
* Inaccurate Accounting
- Accounting policies and procedures may be
error-prone, inappropriate or significantly
different from those that are considered to
be generally acceptable.
* Business Interruption
- May consist of a temporary suspension of
operations or ultimately the termination of
operations and end of the organization.
* Statutory Sanctions
- Include any penalties that may arise from
judicial or regulatory authorities who have
jurisdiction over an organization and its
operations.
* Competitive Disadvantage
- The inability of an organization to remain
viable in the marketplace.
- might result from any combination of the
previous exposures and also might result
from ineffective management decisions.
* Fraud and Embezzlement
- Fraud is the intentional perversion of truth
in order to induce another to part with
something of value or to surrender a legal
right.
- Embezzlement occurs when assets are
fraudulently appropriated to one's own use.
