Financial risks are all about a definition of any risks related to any financing form, risks may take a negative form, which is the difference between real and expected revenues, or uncertainty of revenue. Risks related to investment are often called risks of investment and risks related to the company cash flow which are called business risk, science of market and financial risk management has been developed entitled "modern portfolio theory".
There are financial risks including credit risk, it is also known as risk of payment default, the risk which is related to supposed payment default. The investor loses money in the repeated projects which are called mega-projects where tremendous damages take place, as these projects are exposed to end up with what is known as debt trap, meaning that in that case a cost increase and delay in the schedule happen, and the debt-servicing costs become higher than the available revenues in order to pay the interest and write-off the debt.
Also we mention the market risks as a kind of financial risks, the risks at which the portfolio value decreases, even if investment portfolio or portfolio of circulation, this is due to the change in the value of factors in the market and standards of risk factors in the markets of property rights risk, interest rates risk, currency risk and commodity risk. Financial risks include also liquidity risk and operating risk.
Fraud is the use of deception in order to benefit unlawfully. Fraud involves misleading people or institutions. This definition depends on unspecified terms and may include operations under the law but harm other people.
The audit offices or firms in the internal audit offices have been established for a very important purpose in detecting errors in the work done in the company, through the audit of financial reports and monitoring the administrative work within the company and then build the work image and its reflection in the results. The financial results that are calculated through accurate statistics through the company’s financial accountants are reviewed at a high level by the experts and the internal audit department. Within this course, Ken Malin insiders the company in detecting errors and avoiding risks.