Financial Risk Management

The main purpose of financial risk management is to minimize potential losses arising from unexpected change in price currency , credit , commodities and equity. Risk of price volatility facing this is known as risk market. Risk market contained in various forms .
Though focus on volatility prices or rate , accountant management need to evaluate risk other as :

1. Risk liquiditas arise because not all products financial risk management can be traded on freely.
2. Discontinuity market reference to a risk that the market does not always effect change price gradually
3. Credit risk is the possibility that the opposing party in a contract management resikotidak can fulfill its obligation
4. Regulation risk is risk arising because the public authority forbid the use of a financial products for a specific purpose
5. Tax risk  is a risk that transactions hedge no particular can obtain tax treatment desired .
6. Accounting risk is a chance that a transaction hedge cannot noted as part of a transaction that will protected value .

ROLE OF ACCOUNTING

Management accounting play a particularly important role in the process of risk management. They help in acknowledges exposure market , mengkuantifikasi balance associated with strategy response risk an alternative , measuring potential facing company against certain risks , noted products hedge particular and evaluate program hedge. 

A fundamental framework beneficial to identify different kinds of risk market potentially can be called as mapping risk. This skeleton prefixed to the observation of the various relations risk market against triggered the value of a firm and competition. Trigger value referring to the condition financial and outposts operating performance chief financial affecting value of a company. Risk market risk includes exchange rate and foreign exchange rates , risk and commodity prices and equity. Currency the sources of purchase decreased value relative against the state money domnestik , and this change may cause domestic competitors capable of being sells at a lower price , this is called as competitive risk of currency hand. An accountant management should file a function thus the probability of being associated with a series of each of the output to the trigger of value. Another role played by the accountants in the process of risk management includes the process of balancing the quantification pertaining to an alternative strategy response risk.  The risk of foreign exchange rate is one of the most common form of risk and will be faced by the multinational company. In the world of floating exchange rate , risk management includes : 

( 1 ) the exchange rate movement

( 2 ) the measurement of foreign exchange rate risk faced by the company

( 3 ) the design of strategy adequate protection  and 

( 4 ) the control of risk management internal .
Money managers have had information about the possibility of directions , time , exchange rate changes and magnitude and can devise measurements defensive adequate with more efficient and effective .