Part 2 | Accounting, Cash Flow, and Budget Exposures
Enterprise risk is not owned by the finance and accounting departments, but they do make many of the rules, and we must understand what they do. In the three chapters in Part II, we establish a foundation in three areas:
• Risks from financial accounting. In this chapter, we engage the accountant on his own turf. Accounting is the language of business. If we know the assumptions and theories that lead to financial statements, we can also understand the value and limitations of using accounting data to understand risk and opportunity. This is particularly important because businesses manage their operations using accounting data. They prepare financial statements such as balance sheets and income ...
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