A Novel Financial Risk Early Warning Strategy Based on Decision Tree Algorithm

This paper requires a lot of assumptions for financial risk, which cannot use all of the data and is often limited to financial data; and in the past, most early warning models for financial crises did not, so they could not track the fluctuation and change trend of financial indicators. A decision tree algorithm model is used to propose a financial risk early warning method. Enterprises have suffered as a result of the financial crisis, and some have even gone bankrupt. Any financial crisis, on the other hand, has a gradual and deteriorating course. As a result, it is critical to track and monitor the company's financial operations so that early warning signs of a financial crisis can be identified and effective measures taken to mitigate the company’s business risk. This paper establishes a financial early warning system to predict financial operations using the decision tree algorithm in big data. Operators can take measures to improve their enterprise’s operation and prevent the failure of the embryonic stage of the financial crisis, to avoid greater losses after discovering the bud of the enterprise’s financial crisis, and to avoid greater losses after discovering the bud of the enterprise’s financial crisis. This prediction can be used by banks and other financial institutions to help them make loan decisions and keep track of their loans. Relevant businesses can use this signal to make credit decisions and effectively manage accounts receivable; CPAs can use this early warning information to determine their audit procedures, assess the enterprise's prospects, and reduce audit risk. As a result, the principle of steady operation should guide modern enterprise management. Prepare emergency plans in advance of a business risk or financial crisis to resolve the financial crisis and reduce the financial risk.

Developing the Social, Political, Economic, and Criminological Awareness of Cybersecurity Experts

The global shortage in skilled labor for cybersecurity and the risk it presents to international business can only be solved by a significant increase in the number of skilled personnel. However, as the nature of risks proliferate and bifurcate the training of such, personnel must incorporate a broader understanding of contemporary and future risks. That is, while technical training is highly important, it is contended that future cybersecurity experts need to be aware of social, political, economic, and criminological issues. Towards this end, this chapter considers a number of exemplary issues that are considered worthy of inclusion in the development of future cybersecurity workers. Accordingly, an overview is given of the issues of the “dark side of the net” that cause problems for global cybersecurity and international business risk. The issues are discussed so that from these a skill set can be articulated which will attend to (and mitigate against) potential threats.

BUSINESS RISK IN TIMES OF ECONOMIC RECESSION AND ECONOMIC GROWTH

The issue of business risk in times of recession or growth is very topical in these times. The Czech Republic and its neighboring countries are currently struggling with the economic problems caused by the Covid-19 pandemic. The aim of the paper is to analyze the number of insolvency petitions in the Czech Republic from the years 2010–2020 and to compare them with each other. The data source are data from publicly available resources from the Creditreform group and also from the CRIF database of the Cribis platform. First were created tables for the Agriculture and Forestry, Manufacturing, Construction and Transport sectors. Data for the relevant years were added to them from the aforementioned resources. Then was created a line chart for each industry. Using time series analysis and comparison, we analyze and compare the development of insolvencies. At the same time, we use causal analysis to find out why there were high numbers of insolvencies in the given years. We are also looking at which sectors were hit hardest during the insolvency crisis, when they were hit hardest, how they did in times of economic growth and how they should adapt to the next possible crisis. During the Great Recession, the construction sector was hit the hardest, and then the transport sector also suffered greatly. The largest numbers of insolvencies can be observed in 2012. At a time of economic growth, which began in 2014, the numbers of insolvencies fell in all sectors analyzed, but mostly in agriculture and forestry and transport. Businesses in the sectors analyzed can adapt to the next crisis by creating larger cash reserves or changing, for example, crop production or transport by temporarily reducing fares to attract new customers. We see the benefit of this work in the analysis of the number of insolvencies in the given sectors, which has not been recorded in almost any academic papers. We also see a benefit in determining the conditions for how companies can prevent another crisis.

Political connections, political uncertainty and audit fees: evidence from Pakistan

Purpose This paper aims to examine the association between political connections, political uncertainty and audit fees. The authors use various measures of political connections and uncertainty: political connections (civil and military), political events (elections) and a general measure of political stability (i.e. a world bank index). Design/methodology/approach The authors measure the association between political connections, political uncertainty and audit fees. Audit fees reflect auditors’ perceptions of risk. The authors examine auditors’ business risk, clients’ audit and business risk after controlling for the variables used in prior audit fee research. Findings Results indicate that civil-connected firms pay significantly higher audit fees than non-connected firms owing to the instability of civil-political connections. Military-connected firms pay significantly lower audit fees than non-connected firms owing to the stable form of government. Furthermore, considering high leverage as a measure of clients’ high audit risk and high return-on-assets (ROA) as a measure of clients’ lower business risk, the authors interact leverage and ROA with civil and military connections. The results reveal that these risks moderate the relationship between political connection and audit fees. Election risk is independent of risk associated with political connections. General political stability reinforces the theme that a stable government results in lower risks. Originality/value The authors combine cross-sectional measures of political uncertainty (civil or military connections) with time-dependent measures (general measures of political instability and elections).

New risk measures for variance distortion and catastrophic financial risk measures

In recent years, expectation distortion risk measures have been widely used in financial and insurance applications due to their attractive properties. The author introduced two new classes of financial risk measures “VaR raised to the power of t” and “ES raised to the power of t” in his works and also investigated the issue of the belonging of these risk measures to the class of risk measures of expectation distortion, and described the corresponding distortion functions. The aim of this study is to introduce a new concept of variance distortion risk measures, which opens up a significant area for investigating the properties of these risk measures that may be useful in applications. The paper proposes a method of finding new variance distortion risk measures that can be used to acquire risk measures with special properties. As a result of the study, it was found that the class of risk measures of variance distortion includes risk measures that are in a certain way related to “VaR raised to the power of t” and “ES raised to the power of t” measures. The article describes the composite method for constructing new variance distortion functions and corresponding distortion risk measures. This method is used to build a large set of examples of variance distortion risk measures that can be used in assessing certain financial risks of a catastrophic nature. The author concludes that the study of the variance distortion risk measures introduced in this paper can be used both for the development of theoretical risk management methods and in the practice of business risk management in assessing unlikely risks of high catastrophe.

Risiko Bisnis, Profitabilitas, dan Struktur Aktiva Sebagai Penentu Struktur Modal Perusahaan Makanan dan Minuman

The purpose of this study was to determine the effect of business risk, profitability, and asset structure on capital structure. This study takes samples from manufacturing companies listed on the Indonesia Stock Exchange for the 2015-2019 period. The sample used is purposive sampling. The analysis technique used is multiple linear regression. The results of business risk research have a significant positive effect on the capital structure of Food and Beverage Companies Listed on the IDX in 2015-2019 while profitability has a significant negative effect on the capital structure of Food and Beverage Companies Listed on the IDX, and asset structure has a significant positive effect on the capital structure in Food and Beverage Companies Listed on the Indonesia Stock Exchange in 2015-2019. Keywords : Food and Beverage; Business Risk; Profitability; Asset Structure.

Risk Analysis of Microfinance Conversion Based on ISO 31000 PT. Bank BRI Syariah. Tbk Aceh

Aceh government issued Aceh Qanun No. 11 of 2018 about Sharia Financial Institutions, which demands that all financial contracts in Aceh adhere to Sharia principles. This regulation has an impact on the Aceh region's financial business. PT Bank BRI Tbk Aceh has decided to conversion entire financing and funding portfolio to one of its sharia-compliant subsidiaries, PT Bank BRIsyariah Tbk. microfinance portfolio is bigger than other segments. By constructing a risk analysis based on ISO 31000, this study assesses the business risk associated with converting PT Bank BRIsyariah Tbk's microfinance segment in the Aceh region. The results indicate that twenty risks have been identified and evaluated. Risk can be classified into five broad categories: operational, reputational, strategic, credit, and compliance. The risk analysis results indicate that the risk is significant and requires immediate attention. Operational risk is associated with differences in data capacity, servers, the core banking system, and financing applications, whereas strategic risk is associated with differences in financial analysis, guarantee provisions, and regulations.

Stakeholder perceptions on the risk factors, challenges and benefits of business sustainability practices in the Singapore construction industry

PurposeThis study examines the stakeholder perception of the sustainability risks, challenges and benefits arising from managing these risks in the Singapore construction industry.Design/methodology/approachA questionnaire consisting of 89 risk factors, challenges and benefits, was administered, with 216 responses received from various stakeholders. Regression analyses were used to estimate the relationships between sustainability and business risk factors, challenges and benefits associated with business sustainability practices.FindingsStakeholders recognise the importance of the emerging sustainability risk factors, and indeed rank these almost on a par with conventional business risk factors. The inherent business risks determine the nature of sustainability risk factors for construction firms, which in turn can affect their business risks and the performance and value creation of firms. However, most stakeholders, while acknowledging that business sustainability practices can provide benefits as well as posing challenges, do not believe that they can derive net benefits from such practices.Research limitations/implicationsThrough this perception study, there is an urgent need to turn the existing awareness of the importance of business sustainability (BS) practices into more consistent and solid actions among construction firms in Singapore.Practical implicationsThis study’s results imply construction firms to incorporate BS practices more systematically into their business strategies and operations, and to include sustainability risk factors alongside conventional business risks in their risk registers and risk management frameworks.Originality/valueThis study consolidates various variables and constructs of BS matters in the literature and practice into a meaningful framework for the management of BS in the construction industry.