FNSACC506 Cooperate Governance : Detailing How to Implement and Maintain Internal Control Procedures - Report Writing Assessment Answers

Assessment 1 - Project

You must accurately reference all of your external sources of information

For this assessment you must complete the following written activity.

For this assessment you will need to perform the following task. This task will need to be completed and submitted in a professional, word processed, format and must be 1000 words minimum in length.

Task

Please write a report detailing how to implement and maintain internal control procedures. Your report must include details on the following:

• Reviewing existing internal control procedures
• Reviewing corporate governance requirements
• Implementing operating procedures
• Monitoring policy

Your discussion needs to cover and outline the follow area. Given so many areas to cover, you don’t need to go into a lot of details, but need to explain or define the critical terms plus elaboration, better to have some examples, or discussion of your understanding in your own words.

1. Ways they can identify and analyse corporate governance requirements to determine application to operations
2. How to access clarifications on application of corporate governance requirements from authoritative and recognised sources
3. The process for reviewing and developing internal control procedures, reflecting the application of corporate governance requirements to internal operations
4. How to maintain and review financial delegations and accountabilities to ensure consistency and compliance with internal control procedures
5. How to produce, review and distribute required reports within agreed timelines
6. The process for developing timetables for the implementation of corporate governance requirements in consultation with stakeholders
7. How to document and detail internal control procedures in standardised formats to promote consistency of use
8. Descriptions of how the applications of corporate governance requirements are developed from published sources or recognised practices
9. How to develop and report performance indicators to evaluate compliance with internal control procedures
10. How to identify and evaluate any variations in adoption of corporate governance requirements in operations to determine causes
11. How to develop and implement modifications to procedures to facilitate compliance with internal control procedures

Assessment 2 –knowledge Questioning

• Q1 – page 5
• Q2 – page 7
• Q3 – page 10
• Q4 – page 13
• Q5 – page 14
• Q6 – page 17
• Q7 – page 20
• Q8 – page 3
• Q9 – page 22
• Q10 – page 24
• Q11 – page 31
• Q12 – page 32

Assessment 3 - Case Study

Total Assessment 3 Length should be 1000 words.

You must accurately reference all of your external sources of information

For this Case Study you will need to perform the following task. This task will need to be completed and submitted in a professional, word processed, format and must be 1000 words minimum in length.

Task

For this task you must research any two of the following and complete a detailed report on your findings. The research topics are:

1. Ethical considerations and confidentiality for management and handling of files and records
2. Methods of work practices and routines
3. Organisational guidelines and procedures
4. Principles of internal control and auditing

You need to conduct your own research through internet plus learner resource in any 2 of above topics, and write a report of your findings. Report shall include the explanation of the concept, application of the concept in the real commerce world.

Report length should be approximately 1000 words, that is 500 each topic. At the end of your each topic, please quote the reference that you have made in your research. The reference should be quoted as per the note and example below.

• For book: the author name (year of edition), book name (edition)(page number). publisher;

Example:

Cole, K. (2010); Management: theory and practice (4^thed) (pp117). Pearson Australia

• For website: author, (year).article title and the website URL.

Example:

Berardo K. (2007). 10 Strategies for Overcoming Language Barriers. Retrieved from

https://www.culturosity.com/pdfs/10%20Strategies%20for%20Overcoming%20Language%20Barriers.pdf

Sometimes, for website reference, you are not able to find the author name, year or article name, then you can put in as “unknown author” “unknown year” or “unknown article”.

Executive summary

The role of any management in an institution is to direct the flow of activities such that certain set goals can be realized. This way the management starts by planning what should be done and by whom, it organizes how to be done, it directs the real implementation and finally controls the process of implementation. In this research report, a comprehensive research was done on various management practices that govern the operations and profitability of a company. The importance of adoption of corporate governance has been shown to lead to evaluation of the various practices and mitigation of risks.

Reviewing existing internal control procedures

Internal control procedures are the guidelines set by a board of directors in an institution that enhances the achievement of certain objectives (Rae & Subramaniam, 2008). Each function is delegated to a given junior staff with a greater assurance that they are up to the task and the expected results will be achieved in the stipulated time. Moreover, the process of internal control should cost effective; meaning that the cost of a control should not exceed the expected benefits. It is therefore the responsibility of all arms of governance, starting from the management who come up with plans to the junior employees who effect the plans, to meet a set out objective. This process enables the management to take responsibility of public resources entrusted to them by the government (Doyle et al., 2007). It also impacts a policy of sound management practices through the adoption of strategies that protect an institutions assets and generation of accurate data which facilitates smooth operations.

Internal operations assure the institution that there will application of existing laws, financial reports will be reliable and that there will be a smooth running of operations. To achieve this, there should be proper planning, budgeting, accounting information, documentation, authorization, policies, and order in the objectives intended to be realized. To reduce the risk of a likelihood of not achieving the desired goals, the management should be keen enough to monitor the progress of the implementation of the set objectives. Reviewing of the existing internal controls is important to the management in the determination of the direction the company is taking with regards to set objectives. In this case, the management is responsible to the board of directors for any progress made and assures them that it has surely done it. The review committee can be formed from the internal audit department, health and safety, risk committee or from a representative in the entire company (Marinho & Cagnin, 2014)

The board of management should be knowledgeable enough so that it can effectivelyinterpret the report provided by the relevant review committee. This process begins with identification of the company’s objectives, review of the risk management employed that would otherwise deter the achievement of the set objectives. Evaluation of the objectives helps to avoid overlooking the major business risks involved. Risk evaluation is important because it forms a stumbling block to the existence of the business, may make it too weak or alternatively can hamper the achievements of some opportunities. Apart from the financial losses the management board should also consider the reputation issue+-s to the company that accrue from risks. The directors should therefore use a well-defined format foranalysis; consider the risks involved and the effects of such risks.They can use causation analysis to determine the root cause of the risks and be informed that risks can be caused by various reasons and can as well result in various effects to the company.

For the risks that can be controlled, the board must decide whether to mitigate them through control protocols or whether to accept them. On the other hand, for uncontrollable risks, the board of directors should decide on whether to accept to engage in the risks or to withdraw or reduce the level of engagement to the risk in question.

Reviewing corporate governance requirements

Corporate governance refers to the relationship that exists between the board members, the management, stakeholder and shareholders(Song, Thomas & Yi, 2010). It defines the framework via which the business objectives are set out, how they are realized for the common good of all and how performance progress is made.Therefore the good corporate governance should provide incentives that instill the spirit of realization of the desired objectives. In this regard, corporate governance only promotes but does not ensure the achievement of the objectives.Basically, corporate governance separates business ownership from control and proceeds a step further in establishing a distinct relationship between the shareholders and the management. It exists in two major forms: first, is the long term relationship which is concerned with the check, incentives and balances for the managers and the constant communication between investors and managers.The second is the transactional relationship which exists as the disclosure and authority. It ensures that a business operates in a conducive and fair environment, implying that the managers and directors are held responsible for any poor performance or success in the business (Armstrong et al., 2010)

Poor governance is associated with wastage and mismanagement of resources and emergence of cases of corruption.The ultimate success results from soft behavioural characters of dedicated directors and management as well as hard structural elements laid in place. In essence, the corporate governance requires tireless efforts, commitment, dedication and rich knowledge of the managers, directors and other stakeholders. For communication with the stakeholders, constant information and communication is critical as it enables the business to perform internal control operations in support of the set objectives. This way, the management is able to retrieve vital information from both internal and external sources and use it to better its activities. Internal communication involves the flow of information up, down and across the business enterprise, enabling the staff to receive communication from the management. External communication facilitates inbound communication of any important information and lays out to external shareholders of the expectations and requirements of the business.

Implementing operating procedures

Standard operating procedures are the protocols that are required to develop a certain goal and indicate the start and finish times. In some instances the operating procedures indicate the people who were involved and the source of the resources they used. In as much as this might sound simple, in some companies there ensues a state of confusion between policies, guidelines, rules, protocols and written instructions. In essence, operating procedure aids in the consistence of results and thus uniform reporting, sustained returns on investments due to reduced rates of errors, efficient training of new employees as well as newly acquired recruits, and quick investigations in case of reported discrepancy of results and findings. However, there are problems experienced in the course of implementation of operating procedures. These differences are associated with the culture, type of business and the initial mindset of the employees who is resistant to adaptation of these procedures. For instance, the Joint Medical Stores, a medical supplier in Uganda which deals with warehousing, distribution and sale of pharmaceutical products and equipment set out its operational procedures and printed them in the manuals. They then commissioned them, assigned them status and distributed them for use by the company. At this stage the internal audit was actively involved in the evaluation of conformity and deviations and to actively assist the staff in the implementation process. At present, the Joint Medical Stores have about 94 operating procedures and this has enabled to facilitate its internal operations. The company can now carry out its logistics activities such as physical inventory, inventory controls, product recall, and consignment verification at the point of dispatch and receipt (Vlassoff et al., 2014).Moreover the company can easily perform internal audits and quality process improvement thus making large sales volumes and creating customer confidence.

Monitoring policy

Monitoring policy is a toolused to determine the efficiency of policies in meeting the set objectives. It is used to determine where the deviations from the laid protocols occurred and the source of deviations. This enables the company to make corrections in good time, and if possible to make adjustments in the design as well as the implementation of the objectives. The unique characteristics of monitoring policy are that it considers timelines and trace flaws within the company.

Conclusion

Therefore, all companies and business should keep on track on the current trends in business so that they can make good returns for their investments, gain customer confidence and attract more investors. There should be timely scheduling of meetings with stakeholders so that timely decisions can be arrived at.