Internal Auditing - Risk Determination - Assignment Example

Table of Contents Introduction 2 Objectives 2 Risk Determination 3 Controls to Manage Risk 4 Work Sheet 6 Conclusion 7 Introduction Every organization looking towards doing business has to evaluate the various alternatives and the different directions where they have to work so that risk can be assessed. This will help to prepare strategies based on which risk can be reduced or mitigated and the business is placed better. This will thereby ensure that the overall efficiency of the business experience is enhanced and a mechanism is developed through which better controls can be exercised. This report looks towards presenting the different objectives that the business is looking towards ensuring which will thereby help to ascertain the different risk in different directions. Based on the identification of risk strategies have to be identified through which risk is controlled and the business is able to witness efficiency in dealing with the risk and controlling it. This will thereby help to determine an overall strategy based on which maximum gain and benefit for the business can be identified. Objectives The different objectives which the business will look towards accomplishing so that maximum benefit can be reaped over a longer period of time and efficiency gained are as Proper supply of goods and services so that customers become satisfied and become loyal to the company which will require understanding the wants and requirements of the customers Have the best quality workforce to ensure that better services can be provided which will help to maximize the satisfaction level of customers To ensure proper cash management techniques so that there is profitability at the same sufficient liquidity so that if the business requires certain things it can be managed quickly Ensure proper marketing strategies which will look towards creating awareness about the product or services so that customers are able to product better and based on it bring a change in their purchasing behavior Ensure that the goods and services are supplied to different places and having a sound distribution network so that the penetration level in the market is high and the business is able to ensure maximum customer footfall Risk Determination The different objectives that has been highlighted shows the different things which the business wants to achieve but has to deal with the risk and complication while looking to achieve it and are as Risk Relating to Product Supply & Quality: This is a risk as the business has to ensure consistency in supplying quality products which will require that quality product is purchased and at the same time it is delivered to the customer Risk relating to human resource: The business faced a risk of employee turnover which will make it difficult for the business to ensure that they have the best employees to provide services and will increase the cost of hiring new employees each time Risk relating to finance & cash flow: This is a major risk as the business while looking to deliver quality product and services have to ensure that they maintain sufficient liquidity which will require proper forecasting and developing a parameter based on which the expenses will be made Risk relating to marketing & competition: The business has to face competition that is prevalent in the market and while looking towards dealing with it has to choose the best marketing strategies which keeps them ahead of competition and also provides a specific direction based on which the they are able to create awareness about their product Risk relating to sales & marketing: The business has to ensure that the product reaches to far of places which creates a risk associated with the development of new channels and partners through which the goods can be made available and will require identification of correct channel which is difficult as competitors look towards exploring the same making it difficult to sustain the market Controls to Manage Risk To manage the different risk the most important thing is to plan and set out the priorities clearly. This will help to determine the different areas that the business will have to work on. The most important thing here is to ensure that the business looks towards taking regular feedback from the market regarding the demand of goods and the customer perception regarding the same. This will help to make strategies based on which products which are supplied will meet the customer requirements. It is also important that proper planning is done to ensure consistency so that the suppliers supply similar products and based on it the goods are standardized. This will require regular testing of the product on sampling method which will help to determine the manner in which standard products can be delivered. It is also important that the market information regarding the demand is supplied to the production department. This will help to ensure that the required products are produced. This will help to procure the raw materials that will be required and will help to ensure efficiency in managing the liquidity position. This will also help in determining the cash inflows and expensed based on which proper planning can be done to ensure that the business doesn’t get engaged in a liquidity trap. The business also has to ensure that the workforce who will deliver proper services is motivated and compensated properly. Providing training along with it will help to ensure that the employees are further motivated. This will help to create a positive impression of the organization and will ensure that the business is able to have a pool of loyal employee and will help to control the employee turnover. The business also has to look towards ensuring that they choose the correct channel for sending their products to the far of places. This will require entering into contracts and developing partnership so that the goods can be supplied to distant places. It will also require that the agreement entered is such that both the parties are happy and are able to get their requirements being fulfilled. This will help to develop a positive relationship and will help to ensure that maximum productivity is achieved In addition to it the business also has to ensure that they look towards creating awareness by choosing the correct marketing channels. This will have a big role in determining the manner in which the product will be accepted and will determine the success or failure of the product. This will also require that the business works on different dynamics through which better strategies which are aimed at improving the overall working condition is developed as it will help the business to spread awareness about the product and ensure maximum people know about it. Thus, working on the different fundamentals and areas will help the business to ensure that they are able to garner maximum efficiency which will thereby help them to develop strategies through which risk is controlled and the business is able to gain maximum efficiency. This will thereby help to develop the required fundamentals through which risk is controlled and the business is able to increase its chances of achieving its desired objectives. Work Sheet The worksheet for managing the risk is as Events Risk Risk Mitigation Strategies Customer Satisfaction Understanding the wants as human behavior is irrational  The most important thing here is to ensure that the business looks towards taking regular feedback from the market regarding the demand of goods and the customer perception regarding the same. This will help to make strategies based on which products which are supplied will meet the customer requirements. Consistency in Products Quality product is purchased and at the same time it is delivered to the customer  It is also important that proper planning is done to ensure consistency so that the suppliers supply similar products and based on it the goods are standardized. This will require regular testing of the product on sampling method which will help to determine the manner in which standard products can be delivered Loyal Customers Proper supply of products to meet their expectations  The most important thing here is to ensure that the business looks towards taking regular feedback from the market regarding the demand of goods and the customer perception regarding the same. This will help to make strategies based on which products which are supplied will meet the customer requirements. Quality Workforce Increasing employee turnover increasing the cost for hiring new employees  Providing training along with it will help to ensure that the employees are further motivated. This will help to create a positive impression of the organization and will ensure that the business is able to have a pool of loyal employee and will help to control the employee turnover Cash Management Techniques Liquidity crunch due to increased outflows compared to inflows  It is also important that the market information regarding the demand is supplied to the production department. This will help to ensure that the required products are produced. This will help to procure the raw materials that will be required and will help to ensure efficiency in managing the liquidity position. This will also help in determining the cash inflows and expensed based on which proper planning can be done to ensure that the business doesn’t get engaged in a liquidity trap Creating Awareness identification of proper marketing through proper channels  The business also has to ensure that they look towards creating awareness by choosing the correct marketing channels. This will have a big role in determining the manner in which the product will be accepted and will determine the success or failure of the product. Distribution Network Identifying the best channel and partners who will look towards long term commitment  The business also has to look towards ensuring that they choose the correct channel for sending their products to the far of places. This will require entering into contracts and developing partnership so that the goods can be supplied to distant places. It will also require that the agreement entered is such that both the parties are happy and are able to get their requirements being fulfilled. Conclusion The paper thereby presents the different areas and directions which the business has to work on so that overall efficiency is gained and the business is able to reduce risk. This will help to ensure that the objectives are achieved and the customers will be better satisfied. This will thereby help to bring the required transformation through which better control can be exercised and overall efficiency in dealing with the different situations can be developed. Read More