Identifying the Risks Faced by TransGlobal Airlines

Perform a risk assessment for TransGlobal Airlines and write a report describing the results.
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RISK ASSESSMENT: ANSWER
The risks identified can be classified as Cost, financial and technical risks. The balanced scorecard (BSC) comprises four components: financial, customer, internal processes, and learning and growth (Premuroso & Houmes, 2012).
The identified risks that Transglobal Airlines faces are:
1.Material Misstatement risk (MMR)-This is a financial reporting risk related to potential errors in financial statements that can adversely impact Transglobal Airline's operations. The RMM risk results from either external or internal audit activities or the risk that auditors could fail to identify critical financial reporting errors (Batta, Ganguly & Rosett, 2014). Its probability is high while its impact can be high depending on the value of reported errors. A balanced scorecard for material misstatement measures contractual commitments or compensation models, external rating, and monitoring benchmarks. Based on the balanced scorecard, MMR corresponds to both financial and internal processes components. The risk can be mitigated by changing external auditors. Material misstatement is a high impact risk that can have far-reaching implications for business operations. It can be prevented by management investigating and taking corrective action.
2.Audit validity/accuracy risk: It refers to a risk that the auditor's opinions and recommendations may be invalid or misplaced if financial reporting is materially misstated. i.e non-compliance with financial reporting frameworks like GAAP or IFRS (Wágner 2009). Fall under assessment, ...