You are thinking about starting your own business in a field that interests you. You have been

talking about it with your former internal auditing professor who is a very-wealthy (as a result of

a mega-lottery win) but cautious business-person. While you were describing what you had in

mind, she said: "All businesses must have objectives. All businesses also have risks and controls to

reduce the likelihood and impact of those risks. I would like you to tell me what your

objectives are for your business. I also want to know what you see as the most likely

risks and what controls you should have in place to mitigate those risks."

She wants to be sure that you have thought things through and has asked you to prepare a

proposal that includes a brief description of your prospective business and your thoughts about

your covering the areas she mentioned. She has asked you to come back to her with your

written proposal and so that you can have a meaningful discussion about funding the start-up of

your business. Since you were unsuccessful at getting bank financing, you have decided to do

what she has asked.

Required:

• Describe your business and its operational business objectives.
• identify at least ten different significant risk events
• explain your impact and likelihood ratings.
• Perform a risk ranking and specify the type of risk response strategy you will adopt.
• Develop Risk Map
• Describe how the mitigation activity will reduce the residual risk to an acceptable level. For example, if you decide

to share the risk with a business partner, you would be responsible for one half of the financial

costs of the risk. If your mitigation is a control activity like storing inventory in a locked area,

you are taking steps to prevent theft of inventory. Should you decide to accept or avoid the

risks, be sure to explain those decisions. In your list of risks and controls, include those that are

specific to your business as well as those that are common to many/all businesses ( omit financial accounting issues).