Definition of Business Risk



Business risk is a term that is used by auditors of a company in the context of risk associated with the business that can affect the audit assignment of that business. It can be said that the auditors assess the overall risk associated with the business that can include significant conditions, situations, nature of operations that can makes the business inherently risky client for auditors and makes the financial statements more vulnerable of making material misstatements

 


.The business risk can be in many shapes, such as poor liquidity conditions can lead to financial difficulties, poor operational conditions can lead to increase in operational losses, unsatisfied business clients leads to loss of market share, etc.            

 

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