PQR Ltd., a growing company, has recently expanded its operations. increasing its turnover from ₹500 crore to ₹750 crore, and in the process of commencing a new business division. During the year, 3 (three) nos of new la

Risk assessments should be done according to the changes in the business profile. Such changes may result because of new laws or regulations, new interpretations of existing laws or regulations, new theories of liability, a new activity of the business or changing social standards. Risk assessment includes: Identification areas of potential non-compliances Rating the risks Assessing the outcomes to find the need for training, monitoring, internal controls, detailed reviews and corrective steps. In the risk assessment process, the company identifies the inherent risk of each obligation as critical, high, medium or low. The outcome determines the type of risk mitigation strategy. However, the systems and procedure at the first line tracking and second line monitoring needed to effectively utilize to manage the risk. Thereafter the business assesses its managed risk levels for the identified compliance obligations. There are two types of risk assessments that can be performed by the company, i.e., High Level Risk Assessment and Detailed Risk Assessments. Reports from the detailed and high-level risk assessments must include key compliance risks, with existing and approved risk mitigation activities. Assessment Reports must be discussed and signed off in accordance with the risk management procedure of the company. Risk assessment techniques can be a combination of desk assessments, interviews and/or workshops; however, they should be aligned with risk management standards of the company. While identifying inherent risks, it needs to consider the following risks drivers which can be categorized in the following: Legal Effect: Non compliances by the organization can leads to various penalties, fines, imprisonment, debarment, and seizing the products etc. against the organization and its officers. Financial Effect: Low share prices of the securities of the organization, financial losses and low revenues and lowering the trust of the investors are some of its negative effects. Business Effect: Shutdown of the factories can affect the business operations of the organization. Reputational Effect: Loss in customers' confidence in the brand of the organization, bad media or social discussion can tarnish the reputation of the organization.