- 1 Marks
AAA – L3 – SA – Q1.6 – Business Risks
Question
The following are all business risks. Which is the odd one out?
A High financial gearing
B The rate of inflation
C Overtrading
D A dominant chief executive
Answer
B
Explanation:
Inflation is an external business risk, as it arises from macroeconomic factors outside the company’s control. High financial gearing, overtrading, and a dominant chief executive are internal business risks, as they stem from the company’s financial structure, operations, or management. Thus, B is the odd one out and the correct answer.
- Tags: Business Risks, External Risk, ICAG, Internal Risk
- Level: Level 3
- Topic: The audit approach
- Uploader: Salamat Hamid