A financial risk assessment is a financial evaluation that measures the probability of a financial asset losing its value. This assessment focuses on deep diving into a company's financial readiness. It also considers other areas of a company that impacts its financial stability. The assessment helps in the timely identification of beneficial areas and those that are not, such that, necessary corrections can be made.
Some examples of financial risk assessment include: a. liabilities not recorded appropriately b. loan repayments not planned forc. expenses not accounted for in the P&L d. Difference between the process of maintaining financial statements vs. GAAP requirements