MKT 4300 CH. 17

managing risk to computers and data

1. A firewall: Firewalls are programs or pieces of equipment called routers which serve as a barrier between your PC and the Internet. 2. An antivirus program: Viruses are malicious programs designed to damage PCs. 3. Antispyware programs: Spyware are programs designed to report on your keystrokes or data, or give remote control of your PC to others.

risk associated with specific business operations

1. Events related to the property of the business 2. Events related to personnel 3. Events related to customers and others

internal control

A set of rules and procedures that work to limit the opportunity for employee theft or malfeasance.

separation of duties

A type of internal control that separates the physical control of an asset from the person accounting for that asset.

joint venture

An agreement between two or more entities to pool resources in order to complete a project

deductible

An amount of loss that will not be paid by an insurance company.

handling ada (American disabilities association) requirements

Determine if you are subject to any of the provisions of the ADA Obtain the services of experts on the ADA to evaluate the level of your compliance Work diligently to meet the requirements to which you are subject.

key employees

Employees whose experience and skills are critical to the success of a business -Loss of key employees is a particularly acute risk for small businesses

managing risk from employee violation of government regulations

Have a written policy provided to each employee Conduct training of managers and employees concerning those policies, Immediately and consistently act upon receipt of any complaint.

developing a comprehensive insurance program

Identifying risk is the first task Determine which risks are to be covered: -Vehicle liability -Worker's compensation -General liability -Various types of malpractice coverage

events related to customers

Injuries suffered while upon business property Injury or damage that is caused during the use of the business's products.

product liability

Payment for injury or damage that occurs during the use of the business's products

The cost of property insurance is determined:

Property's insurable value Amount of deductible loss Amount of co-insurance required Loss limits of the policy

insurable value

The amount of an asset for which a company will write an insurance policy.

business risk

The level of probability that the future economic state of the business will be worse than expected.

personal insurance

available to protect both you and your employees from specific risks Life, Disability, Medical coverage

credit insurance

covers abnormal losses from credit customers not paying their bills

sources of theft

employee theft shoplifting administrative error vendor fraud

independent internal audits will give you:

evaluation of business risk and risk control structure systematic analysis of your business processes and controls. Information on irregularities compliance with regulations. value of the assets of your business. operational and financial performance. Recommendations for more effective and efficient use of resources.

Business interruption insurance:

funds to pay the ordinary operating expenses of your business should it be forced to close temporarily

managing risks

Best strategy is to develop a business environment that minimizes: -Probability of the event occurring -Amount of loss that can be experienced if the event does occur You create this strategy by: -Making specific plans for, and arrangements to deal with, foreseeable events -Creating and enforcing an appropriate code of conduct for yourself and all employees -Ensuring that valuable assets are physically secure -Actively working to get rid of any physical hazards in your workplace

fidelity bonds

Bonds that repay employers for losses caused by dishonest or negligent employees also called dishonesty bonds

coverages

Contractual provisions of insurance policies that specify what risks the insurance company is assuming.

buyout insurance

Insurance that provides money to owners of a business to buy the shares of any deceased owner from that owner's heirs.

managing risk to intangible property

Intellectual property rights comprise the legal rights to use unique features of products or services that provide competitive advantage. If the holder of the intellectual property rights promptly reacts to infringement by making written objections to any and all infractions, can the legal rights be maintained.

managing risk from violations of tax regulations

Keep complete, accurate accounting records Establish a relationship with both an accountant and a lawyer who are expert in tax issues Make paying your taxes your first financial priority

tax codes

Laws and regulations that specify the requirements of taxation include franchise or corporation taxes, income taxes, employee taxes, sales and use taxes, and property taxes

risk of nonpayment

Must balance: giving credit to customers will increase your sales offering credit guarantees sooner or later some customer will not pay as promised.

medical

most highly desired form of insurance for most employees

theft insurance

normally included in insurance on physical assets

key person

protects you in the event that a key employee dies or is disabled and cannot work

life insurance

provided to employees to provide security for their families