Risk Analysis in Engineering and Economics †MyAssignmenthelp.com

Question: Discuss about the Risk Analysis in Engineering and Economics. Answer: Introduction: All over the world, accounting is considered as one of the major professions. Accounting is a type of profession where a person performs different kinds of accounting functions in the business organizations like the preparation and analysis of financial statements, performing the audit operations and others (Hoyle, Schaefer and Doupnik 2015). Thus, it can be said that the accountants are majorly responsible for all the accounting related works in the companies. On the other hand, it needs to be mentioned that risk and return are two of the major factors in the accounting activities of the companies. Risks refer to the particular chance that an investor takes to gain a certain amount of return (Baron et al. 2016). In order to take high return, an investor has to take high risks and vice versa. Thus, it can be observed that there is a positive relation between the risk and return. In this case, I would like to mention that I am planning to be an accountant in the future. The above disc ussion denotes the fact that risk and return are important factors in the profession of accounting. The reason is that the accountants have the responsibility to take effective measures and to provide risk and return related information for the effective management of organizational risks and returns (Penman and Zhu 2014). Hence, it can be said that there are some major reasons behind learning about the concepts of risk and return. All these major issues are discusses below. As per the earlier discussion, it can be seen that risk and return are two of the major factors in accounting. In order to establish the connection among risk, return and accounting, the concept of scenario analysis needs to be analyzed. The concept of scenario analysis involves the development of descriptive models regarding the risk and return of the companies. Thus, it can be said that the concept of scenario analysis includes the concepts of risk and return of the business organizations (Kaplan and Mikes 2012). In the process of scenario analysis of risk and return, the organizational accountants play important role. In the process of managing the risk and return of the companies, the accountants play important role by providing high-quality information along with explicit understanding about the risk and return of the company. At the time of doing the jobs, organizational accountants have the access over important accounting as well as financial information. At the time of manag ing the risks and returns of the companies, this accounting and financial information helps in the prediction of future trends (Ayyub 2014). It needs to be mentioned that the effective management of risk and return helps in the optimal management of resources of the company. Hence, the above discussion shows that the process of risk and return management requires important accounting information and the accountants are the one who provide this accounting information. From this, I have come to know the fact that in order to assist in the risk and return management, it is needed for me to study the details about risk and return. In this regard, it needs to be mentioned that management of risk and return has connection with the internal control of the organizations. The reason is that effective internal control of the companies help to reduce the financial risk and helps to increase the amount of various financial returns (Vijayakumar and Nagaraja 2012). In this case, it needs to be mentioned that organizational accountants are responsible for the implementation of effective internal control of the companies. On a more precise note, it has been seen that lead accounting managers and accounting professionals play a vital part to design, plan, implement, executive and monitor the risk management activities and programs of the companies. Thus, accounting managers and professionals play important part in the management of risk and return of the companies. In addition, in the business organizations, it has been seen that it is the responsibility of the organizational accountants to arrange and conduct necessary tr aining programs for the employees in order to become familiar with various organizational risk factors in the companies (Skaife, Veenman and Wangerin 2013). On the other hand, it is responsibility of the lead accountants of the companies to take into consideration the major risk factors for the decision-making process. In this particular way, the accountants of the companies play an important part in the strategic management of the companies (Munsif, Raghunandan and Rama 2012). Thus, it can be seen that in order to take part in the above-mentioned organizational activities, the accounting professionals of the companies need to have sufficient knowledge about concepts of risk and return. From the above discussion, I have come to know that there is a crucial connection between risks and return management and accounting profession. The above discussion denotes the fact that the organizational accounts provide the risk and return management team with important and high-quality accounting and financial information so that they can be used for minimizing the risks. It needs to be mentioned that without the presence of enough knowledge about risk and return, the accountant will not be able to provide specific accounting information to them. Another major factor that can be seen from the above discussion that the accountants play an important part in the internal control of the companies and internal control helps to manage risks and returns. For this purpose also, without the knowledge of risk and return, the accountants will not be able to contribute towards the development of internal control of the companies. Thus, from the whole discussion, I have concluded that it is utterly important for the accountants to have enough knowledge about the concept of risk and return. With the help of this knowledge, the accountants become able to identify specific risk factors in the companies. After the identification of the specific risk factors, the organizational accounts become able to provide specific accounting information based on the requirements of specific situations. In addition, knowledge about risk and return factors makes the accountants able to better contribute towards the effectiveness of internal control. For all these reasons, it is important for me to learn about risk and returns. References Ayyub, B.M., 2014.Risk analysis in engineering and economics. CRC Press. Baron, M.D., Brogaard, J., Hagstrmer, B. and Kirilenko, A.A., 2016. Risk and return in high-frequency trading. Hoyle, J.B., Schaefer, T. and Doupnik, T., 2015.Advanced accounting. McGraw Hill. Kaplan, R.S. and Mikes, A., 2012. Managing risks: a new framework. Munsif, V., Raghunandan, K. and Rama, D.V., 2012. Internal control reporting and audit report lags: Further evidence.Auditing: A Journal of Practice Theory,31(3), pp.203-218. Penman, S.H. and Zhu, J.L., 2014. Accounting anomalies, risk, and return.The Accounting Review,89(5), pp.1835-1866. Skaife, H.A., Veenman, D. and Wangerin, D., 2013. Internal control over financial reporting and managerial rent extraction: Evidence from the profitability of insider trading.Journal of Accounting and Economics,55(1), pp.91-110. Vijayakumar, A.N. and Nagaraja, N., 2012. Internal Control Systems: Effectiveness of Internal Audit in Risk Management at Public Sector Enterprises.BVIMR Management Edge,5(1).