ACCAspace
Provided by
ACCA Research Institute
ACCA P4
Advanced Financial Management (AFM)
高级财务管理
ACCA Lecturer: Lily Wang
ACCAspace 中国ACCA特许公认会计师教育平台 Copyright © ACCAspace.com
, P4 Chapter 13 Content
1 Risk policy formulation
2 Risk framework
3 Risk management
4 Specific types of risk
ACCAspace 中国ACCA特许公认会计师教育平台 Copyright © ACCAspace.com 2
, 1.Risk policy formulation
Risk and stakeholder conflict
• Shareholders will invest in companies with a risk profile that matches
that required for their portfolio
• Management should thus be wary of altering the risk profile of the
business without shareholder support
• An increase in risk will bring about an increase in the required return and
may lead to current shareholders selling their shares and so depressing the
share price
• Inevitably management will have their own attitude to risk. Unlike the
well-diversified shareholders, the directors are likely to be heavily dependent
on the success of the company for their own financial stability and be more
risk averse as a consequence
ACCAspace 中国ACCA特许公认会计师教育平台 Copyright © ACCAspace.com 3
, 1.Risk policy formulation
Risk and plicy decisions
The financial manager will need to make policy decisions in the following
areas:
ACCAspace 中国ACCA特许公认会计师教育平台 Copyright © ACCAspace.com 4
Provided by
ACCA Research Institute
ACCA P4
Advanced Financial Management (AFM)
高级财务管理
ACCA Lecturer: Lily Wang
ACCAspace 中国ACCA特许公认会计师教育平台 Copyright © ACCAspace.com
, P4 Chapter 13 Content
1 Risk policy formulation
2 Risk framework
3 Risk management
4 Specific types of risk
ACCAspace 中国ACCA特许公认会计师教育平台 Copyright © ACCAspace.com 2
, 1.Risk policy formulation
Risk and stakeholder conflict
• Shareholders will invest in companies with a risk profile that matches
that required for their portfolio
• Management should thus be wary of altering the risk profile of the
business without shareholder support
• An increase in risk will bring about an increase in the required return and
may lead to current shareholders selling their shares and so depressing the
share price
• Inevitably management will have their own attitude to risk. Unlike the
well-diversified shareholders, the directors are likely to be heavily dependent
on the success of the company for their own financial stability and be more
risk averse as a consequence
ACCAspace 中国ACCA特许公认会计师教育平台 Copyright © ACCAspace.com 3
, 1.Risk policy formulation
Risk and plicy decisions
The financial manager will need to make policy decisions in the following
areas:
ACCAspace 中国ACCA特许公认会计师教育平台 Copyright © ACCAspace.com 4
