Abstract
<p class="MsoBodyText" style="line-height: normal; margin: 0in 0.5in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 10pt; mso-bidi-font-style: italic;">This paper develops an integrated risk management decision framework that provides insights into the many factors that are involved in controlling and managing risk for accounting firms.<span style="mso-spacerun: yes;">&nbsp; </span>Borrowing from the areas of insurance economics, crime and punishment, accounting, and organization theory, factors are identified that affect the demand for risk reduction.<span style="mso-spacerun: yes;">&nbsp; </span>The interaction and application of three different components of risk reduction (market insurance, self-insurance, and self-protection) within the context of risk reduction decision-making are examined. </span></p>
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