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Financial loss from investing time and money to comply with accounting standards is an example of which strategic risk?

1) Changing customer needs
2) Reputation damage
3) Regulatory and political issues
4) Obsolescence

1 Answer

6 votes

Final answer:

Complying with accounting standards and incurring financial loss is an example of regulatory and political issues as a strategic risk.

Step-by-step explanation:

The financial loss from investing time and money to comply with accounting standards is an example of Regulatory and political issues as a strategic risk. Businesses must adhere to regulatory frameworks, which can often entail significant costs to remain compliant. These can be seen as a form of investment too, as non-compliance can lead to greater losses, such as fines or legal expenses. However, this adherence can also be a burden that affects the financial assets of a company. Navigating through these regulatory and political landscapes is challenging and can impact a firm's ability to remain flexible and respond efficiently to uncertain market conditions.

User Dinesh Suthar
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