What types of risks are considered operating risks?

Prepare for the ACA Corporate Reporting Exam. Engage with comprehensive flashcards and multiple choice questions, each with detailed hints and explanations. Ensure success in your exam journey!

Operating risks refer to the uncertainties and potential negative impacts that arise from the core activities and functions of a business. These risks are integral to the daily operations and can affect the efficiency and effectiveness of a company's processes.

The definition of operating risks encompasses a wide variety of challenges that could stem from various aspects of business operations, including supply chain issues, production inefficiencies, or workforce management problems. Therefore, recognizing risks that arise directly from business operations is key to identifying and managing operating risks effectively.

While the other options mention important types of risks in a business context, they do not specifically align with the definition of operating risks. Marketing strategy risks pertain to the effectiveness of promotional efforts and market positioning rather than day-to-day operational execution. Financial investment risks deal with the performance and returns associated with investments, which are not directly tied to operational processes. Compliance risks relate to the potential consequences of failing to adhere to legal and regulatory standards, impacting operational integrity but not falling under the operational risk category itself.

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