The Assessment of Risks within the Financial Crisis Environment Challenges

Author:Irinel ION, Ph.D. Student



Keywords:risks, crisis, Romania, scenarios, assessment, business

The main objective of the study is to highlight the increase in the risks frecquency but also the increase of their adverse effects, associated with the financial crisis and customised for the wholesale trade sector in Romania. In order to achieve this goal, a empirical study was carried out, based on the autor practical experience within the field, but also considering the views of other mananagers and professionals, regarding the identification of risks & problems associated with the sector.\r\nThe challenges which the business environment is facing, associated with the financial crisis are various, these resulting in increased risks and uncertainty which the companies are facing. The understanding, proper assessment and the control of risks are the main elements of the companies strategy for overcoming the actual period of economic downturn but also for the financial auditors, for which, the risks assessment is an important part of audit mission. \r\nThe study approaches the problems and risks related to wholese trade sector and possible solutions for their proper control are then provided. Specific and general risks are analysed as high debt/equity ratio and high short term financing needs, issues related to stocks management & receivables collection period, evolutions at the retail level, exchange rate volatility, the worsening of the macroeconomic indicators and the consumption reduction, etc. The risks identified and the possible measures that can be implemented for the mitigation of their adverse effects offers suggestions for the control and proper administration of the risks by the management.\r\n\r\n