[GoVPI]

I’m studying with Becker and wondering about Derivatives.

I have a few situations in which I’m trying to completely understand, this is hard stuff in my opinion:

Impact on IR and CR and DR

Example: A company decided to venture into derivatives/hedging to offset price fluctuations in materials or investments and this is their first year doing it.

My thoughts: Inherent risk would increase and there would be no effect on control risk, detection risk would decrease.

Example: The company hires a qualified manager to monitor the derivatives.

Inherent risk stays same, control risk decrease, DR increase.

Example: The entity implements what appears to be a stronger system of Internal Control for monitoring these derivative instruments

Inherent risk stays the same, Control risk decrease and Detection risk would increase.

Do these seem correct to you? Thanks yall

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[GitRDone2017]

I am bumping this up to see if anyone has info on this: derivatives and the effect on IR, DR, and CR??? Anyone? Please!!!! I am confused about this topic and I know it is a weak point for me.

"Confidence is going after Moby Dick in a rowboat and taking tartar sauce with you" - Zig Ziglar
Ninja book + Ninja MCQ + Roger
AUD Oct 2016
FAR Nov 2016
BEC ?
REG?

[Author]

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