Monitoring the Financial Security of the Economic Subject on the Basis of Financial Risk Assessment

Abstract

This contribution examines the financial security system of the economic entity, the existing risks that affect financial security, suggests a methodology for financial risks assessment, and suggests measures to reduce the negative impact of financial risks. Financial security of the economic entity is the ability to influence financial risks in order to minimize them and ensure the fact that current performance is consistent with strategic performance, and to ensure an adequate level of financial control. Basic financial security risks of the economic entity can be quantified on the basis of indicators that characterize certain economic processes. Management of financial risks should be based on the risk-oriented approach. The probability of risks depends on the quantitative interval of the indicator or on the qualitative characteristics (in the case when a quantitative measurement is impossible). Monitoring the level of financial risks, conducted according to the data of companies of the Russian Federation makes it possible to conclude that there are trends in their changes and, accordingly, the possibility of planning and changing the level of risks through management decisions.