Basel committee's risk categories in relation to financial Essay

Basel committees risk categories in tattle to financial instituitions in relation to financial and non financial organisations - Essay ExampleIn banks, there is a possibility for financial entropy to unthaw. Financial information on loans given, repaid, capital, withdrawals and deposits made can be stolen by the employees or simply disappear repayable to poor technological procedures. The Basel Committee identifies that internal loss of data can occur due to poor risk management processes, new technological methods and upcoming business activities. Basel Committee identifies that a confederacy is not able to have the right documentations in its accounts if it has loss of data. This means that its profit and loss margins ordain be under estimated. This is dangerous to the company as it will not reveal the real sum total of capital used to carry out the activities (Basel, 2006, pp. 141-153).Case studies on non-financial organisations reveal that they are at a risk of internal fr aud. This is so because they also use money or capital in buy their materials for their use. The case studies revel that non financial organisations mainly undergo the risk internal fraud by make misstatements on the financial statements. This does not indicate the true financial state of the organisations. The case study reveals that both financial and non-financial organisation can show fraud by looking at the growth in terms of their revenue and how it keeps changing. The margin of their growth of revenue is not very consistent. For a company to cognize where it lies in the financial market, the growth change in revenue is supposed to be a spotlight consistent. It is not supposed to have big margins. concord to Ericksons and other scholars, the audit sector is usually not able to detect fraud because of the lack of understanding of the organisational environments they are working on (Erickson, 2001, pp.166-193).According to the studies made on Basel Committee, external frau d occurs is mainly done against the organisations. It undergoes external fraud due to misinformation from its clients in