HOME REVISION NOTES – practice

4
Pestel
P political
E economy
S social
T tech
E environment
L legal

Porter’s diamond

Chapter 8 INTERNAL CONTROL SYSTEM

Objectives of ICS-
- Detection

Characteristics if e marketing
6 Is
Interactivity
Intelligence
Individualization
Integration
Independence
of location
 15
IRBP4
Initial screening
Risk assessment
Business case
Project Plan
Project milestone
Post project review
Post-implementation review

Business case
Intro
Executive summary
Current situation
Cost/benefit analysis
Impact
Risk identification
Recommendations
Appendices

PID
Business justification
Scope of the project
Constraints
Roles and responsibilities
Quality plan
Risk
Appendices

OMQF - MEASURING BENEFITS

O – observable benefits
M – Measurable
Q – Quantifiable
F - Financial

SBL REVISION DAY 1

- Copy out all the tasks in the word processor
- Read the overview – who am I and what is the company about
- Read the requirement and put the keywords in the scratchpad
- Professional skills – read before writing the answer
- Para before requirement – too long/read the requirement but do not
understand…………. otherwise read before writing.

High impact Low impact

High Market risk
prob
Financial risk 

Low Customer reliance

prob

17/08/22
Question 21 – page 26

A
Interactivity
- Communication b/w the buyer and the seller
- Currently there is no interaction
- Basic info on the website
- The website can be made more useful and interactive for a customer –
system in place to book for test drives/ schedule services
- Online chat options
- FAQ sections – discuss the common problems that customers face
- Option to filter diff type of cars, based on price, model, make etc
 - Customers can share their feedback abt CAR
Intelligence
- Gathering data about existing or potential customers
- CAR can give an option to potential customers to sign up when they
first visit the website
- Track customers – how many times a customer visits a website
- Used to understand what customer prefers – look for a specific car that
customers will want to buy.
Individualization
- Customize info
- Send the right message to each customer
- Currently CAR sends out info relating to the cars they sell who have
purchased in the last 3 years. This is not value-adding. A customer who
purchased a car less than 3 years ago may not want to purchase
another one so quickly
- CAR will need to send other info relating to services
- For potential customers, CAR can send offers
Independence of location
- No need to have a physical presence
- Could be difficult for CAR- most customers are located close to garages
- Customers will need to drop off their cars
- If CAR decides to go completely online – the implication of breaking the
current lease agreements
- Where are the services going to take place

B
E – proc
5 rights – product at the right time, right quantity, right quality, a right vendor
at the right price.
Cars, spare parts, office supplies.
For cars:
- If an e-procurement system is opted for- save CAR $ 500 per car for staff
and transport cost
- Participation in e-auctions – participation fee
- If e-procurement is used to purchase cars, CaR would lose the
personalizwd buyung which promotes, which customer value
- Not the best option
Spare parts
 - Issues w backlog
- Paperwork
- Everything goes through the manager
- Delays
- Office supplies go through the manager
- E proc could help
- Supplier is willing to link their sales system with CARS procurement
- Authorisation can be done remotely
- Even opt for the JIT inventory system
- Implement the e proc sysgem for the spare parts and slowly do the
same for the office supplies

QUESTION 28 34 PAGE
b) traditionally – book keeping
overtime this has evolved – involved in dec making, coordinate with other
dept. prepare budgets- dept. custmers, product

set KPIs – achieve

benefits-
- Identify the profitable and not profitable areas, customers – help the
organisation by giving the relevant info
- Help produce more realisgic budgets - sales dept – needs help
- Help with pricing issues- ehat needs to be considered

Question 29
b)
- cost advantage – 1 employee that is employeed by 3 c
- staff turnover – converted the fixed cost to variable- only pay for the vehicles
dispatched
- good quality vehicles not worried by maintained
- focus on the core’
Wide range of customers take up on more customer breakdown
18/08/2022

48 question
OMQF
Observable-
- Easy to identify
- Based on experience/judgment/feelings
- Staff morale is an observable benefit
- 16 out of 20 staff have been with the community center for 5 years. It si
clear that they are happy
- Not possible to assign a dollar value to O
- Where did they get $25,000 from?
- O benefits never in cash flow - overstates
Measurable
- These benefits can be measured but not quantified.
- These benefits will definitely be there but the organization will not be
able to estimate what the benefit will be
- In this case, increased income will be measurable benefit as the new
centre could attract visitors who will spend money at the centre.
However, we can not be sure on how much they wukk spend
- Based on projection, the benefit has increased by 50000 from yr 2 to 3
and then another 20000 from y 3 to 4
- Risk that the projection was not estimated correctly
- These benefits – should not be included in the forecast
Quantifiable
- Benefits can be estimated
- Energy savings has targets for energy levels which has been provided
- It would be easy to compare the old consumption with the target.
- Not 100% reliable- months where the consumption is high (hot) and
other months where it is low.
- But we can still estimate what the savings could be. – tangible benefits –
included in cashflow
Finance
- Sure of saving
- Able to calculate
- Rental savings are certain
- Before 144,000 was paid on rent annually.
- This can be included in cash flow
26.
a)
- Laws that the co. needs to comply with – IA can ensure that these laws
are being followed – co. fined
- Requirement to have IA function – affect many projects
- Report to authorities is sent by IA – increases the confidence of users
- IA review systems- ensure systems operate effectively and efficiently-
help with operations
b)
i-
- AC consists of professional water engineers- no financial experience –
not aware of internal controls, issues with the internal auditors etc
- All members have retired ED of blup co. – not independent – ED can
join as NED provided there is a gap between when they resign and join
back as NED. – familiarity threat
- Audit committee is responsible to ensure that external audit firm is
independent. In this case, there is a threat as the firm is the AC chairs
son in law. This threat showed have been identified and flagged – did
not
ii) AC and IA function
- Ensure that IA are independent – IA are employees of the co. – report on
the work of ED. The IA may not be completely honest as they may be
afraid of the consequence. Howver, reporting to the ac will help manage
this threat. The ac can communicate the issues to the ed in an
appropriate manner
- AC is part of the board- responsible for setting strategies. AC can
ensure that the work plan for the IA are in line with the strategies- work
they do is relevant
- AC can ensure that the recommendations provided by the IA are not
ignored. The AC can ensure that the ED improve the controls or other
matters in line
C)
- ensure that the financial info is accurate – complete and it is produce in a
timely basis
- also ensure rhat the level of fraud and error is minimised – objective of IC
financial st. are not tampered with
- users can place reliance on the financial statemnets – SH banks
 - helpful for the external auditors. If the controls work properly, the external
auditors can spend more time doing sunstantive testing

FUNCTIONS OF INTERNAL AUDITOR GO OVER

IA FUNCTION
OTHER ELEMENTS OF TECH MOB TECH – CLOUD COMPUTING
BLOCK CHAIN
SOURCES OF FINANCE – EQUITY / DEBT issuing bond advantages / dis chapter
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