- 1 Marks
AAA – L3 – SA – Q3.5 – Internal Business Risk
Question
Which one of the following is an internal business risk?
A A new competitor in the market
B Insolvency of a customer
C Poor working capital control
D Suppliers demanding tighter credit terms
Answer
C
Explanation:
Poor control of working capital is a risk arising from within the company, making it an internal business risk. A new competitor (A), insolvency of a customer (B), and tighter credit terms from suppliers (D) are external business risks, as they originate outside the company. Thus, C is the correct answer.
- Tags: Business Risk, ICAG, Internal Risk, Working Capital
- Level: Level 3
- Topic: The audit approach
- Uploader: Salamat Hamid