Management by exception.

Insights, info for better decision making even for risk mgt, mitigation plan for uncertainty factors.--- intelligence
decision making

Info feedback loop—learning purpose—learning org: post-implementation audit –learning & improvement

Mickey mouse: Walt Disney

Mickey mouse without gloves ?
His claws will frighten kids!!!

Insights: strategic decision:

Diaper and beer in bundle!!

Optional Q & As
Q1: In your opinion, do you think the framework of value chain (categorization of org activities) shall be
in rigid and absolute classification/definition or better with flexibility to reflect mgt philosophy and
business environment?

Detailed value classification/assessment to sub-division of activities, strategic partnerships, business

process automation & core competitiveness development, specific assessment and classification, sub-
division and activities based analysis (cost and financial performances), consistency for comparison and
learning purpose…..

Canvas business model …

Chapter 1: Quiz: page 15:

Q2:
Option A: reliable: needed. to be free from error, bias, to be reliable for decision making.
Option B: timely: characteristic of quality info: outdated info for decision making can cause missing of
right timing for opportunities. / outdated info becomes irrelevant for decision making
(historical/sunk/past = irrelevant for management decision making) : relevant cost idea.

Option C: inexpensive. Incorrect. Potential benefits outweigh resources consumed will be acceptable in
term of cost/resources consumption for insights generation. CBA: Cost Benefit Analysis

Option D. relevancy of info to user’s purpose can enhance quality of decision making.

Q4: **Option B: interactions: purchase function: purchase order to suppliers

Approved supplier list: identification and assessment of
potential suppliers/vendors. (interval evaluation on suppliers’ performances)
Purchase department interacts with production,
warehouse….

Option D. accounting & finance: documents reconciliation : monthly statement from supplier to match
with payable accounts.
Payables management: payables relationship/supplier
relationship management…..aged creditors analysis : due date, outstanding, credit policy & term, dispute

Evaluation of discount offered from suppliers (relationship mgt)

Credit policy assessment (credit policy from suppliers)

Financial management --- working capital management: inventory, cash & bank, creditors(payables),
debtors (receivables)

Bonus Q &As:
Q1: In your opinion, how shall we detect unacceptable incentives offered to customers for earnings
management by the org(the seller) ? (e.g. bill and hold transaction)

Trend analysis(regularity in pattern of sales and customers’ order cycle),

Trend analysis (historical trend analysis) regularity in org’s expenses transaction patterns, anything
irregular in expenses pattern/trend could be cover for incentives given to customers,

Trend analysis, usual practice of bill and hold transaction of the org, if there is manipulation through bill
and hold, irregularity in such practice/sudden spike in this practice can be indicator…

year end adjusting event (even after published of financial statements, highlight suspicious transactions and
customers’ practices like return of goods),

inventory movement check,

symptoms and opportunities for fraud identification/detection,

circumstances evaluation (especially on engaged customers’ sides, why they need such big order (matching
with their growth in sales/expansion plan? , their financial situations),

identify potential channels for transfer of benefit/incentives to engaged parties as bribery/corruption,

Kickbacks . (e.g. shares of profit/return to customers through marketing expenses, written off of bills, deep
discount, privileged credit policy and terms, improper service fee charges, fictitious personnel to claim
payment, fictitious account, petty cash reimbursement methods (especially for petty cash) …etc)

long standing(outdated) transaction without written off (cover for incentives given in form of
outdated/irrelevant expenses transaction should be written off long ago but allowed to stand)

inventory control to avoid re-use of same batches of goods in bill and hold by one customer for fulfilling
other customers’ order.

Investigation into Personal motivation

*standard on revenue recognition