CAIB 3: Chapter 6 Key Terms

Question	Answer
Risk Management	Is the process of making and carrying out decisions that will minimize the adverse effects of accidental losses upon an organizations
Loss Exposure	Is the chance of a financial loss to an organization as a result of a particular peril striking a thing of value
Tangible Property	Property that is real, can be touched, and has form and substance
Going Concern Value	The difference in the value of property which must be sold after a loss and its value had the business continued
Intangible Property	Property that has no physical substance and consists of legal rights rather than things
Expediting Costs	The extra costs incurred in hastening the recovery of a business after a loss
Risk Control	The steps taken to reduce the frequency and severity of losses as much as possible with the resources that are available
Risk Financing	Paying those losses that inevitably occur
Segregation	Involves arranging an organization's activities and resources so that no single event can cause simultaneous losses to all of them
Separation	Involves dividing an organization's single asset or operation into two or more separate units
Duplication	Involves complete reproduction of an organization's own "standby" asset or facility to be kept in reserve
Retention	Includes all means of generating funds from within the business to pay for losses
Contractual Transfer	Includes all means of generating funds from outside the business to pay for losses

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	Created by agallo almost 9 years ago