Video: Performance

In this lesson, immerse yourself in the strategic nuances of performance management as Nick Palazzolo, CPA, covers the critical aspect of developing a portfolio view to assess how various risks can impact the performance of different business segments. He delves into the concepts of inherent risk, target residual risk, and actual residual risk, ensuring that you'll be equipped to properly analyze and prioritize risks within an organization. Nick makes the session engaging by comparing significant risks versus minor threats in a way that underscores the importance of appropriate risk prioritization. With a focus on identifying risks and implementing the right responses, this lesson is essential for understanding the complex landscape of risk management and its influence on overall business performance.

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Video Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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All right, we got two more. We've got performance here. Now develop a portfolio view. We want to understand as a whole how risks could affect performance of each segment. We have of each department, each component of the business, assessing the severity of the risk.

This includes inherent risk, target residual risk, and actual residual risk. We will see this elaborated on thinking what are those risks? Or if you don't think you know what those are, we'll double check and make sure that you know what those are. Prioritize risk. Okay.

Is the risk that someone's going to steal $100 being prioritized over the risk that our factory can melt down? Well, I think between those two risks you can pick which risk should be prioritized over the other. It's not $100 the factory can melt down for all we care. Save that hundred dollars. Alright.

Identify risks. The entity identifies risks to the business. You can't get any more generic than this anyway. Implements risk responses. Oh, we will see this one. We'll see this one. And when will we see this one? Well, we'll see it right now.

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