Canadian Wood Toys INC. Essay

Published: 2020-04-22 15:24:05
1697 words
7 pages
printer Print
essay essay

Category: Risk

Type of paper: Essay

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Hey! We can write a custom essay for you.

All possible types of assignments. Written by academics

I will begin by highlighting the importance of the audit in assessing the risk and identifying the steps in reducing and mitigating the risk that our company is facing. The impact of the risks on global business it is dramatic in our days, changing the entire look of the industries and financial services. Some risks could be anticipated and identified but some could not. Companies now are using more and more key steps and principles to better manage the risks by; *** identifying the risks relevant to the organization

*** assess the significance and implications of those risks to the business *** identify and establish a process for collaboration on risk mitigation with other organizations and partners *** integrate Enterprise Risk Management into the organization *** focus resources on key risks in order to achieve the organizations objectives (Source PricewaterhouseCoopers effective ERM)

Under IAA Standard 2120 Risk Management:

The internal audit activity must evaluate the effectiveness and contribute to the improvement of risk management processes. Practice advisory 2120.C1 states: During consulting engagements, internal auditors must address risk consistent with the engagements objectives and be alert to the existence of other significant risks. In manufacturing companies, production is usually the most important aspect of the entire process mostly due to the high cost incurred, the staffing and the complexity of the departments involved Production is of vital concern to management because of the important risks associated with the process. I have identified some of the most important risks and how to manage the risks to minimize the impact. Along with the production process, other areas can be identified as posing risks; distribution, finance, human resources ¦ I have identified below some of the risks with the highest impact in our company:


The risk of manufacturing defective or substandard products
Determine the cause of the quality defect (human error or machine) Trend analysis reports to address the recurrence of the defects

The risk of missing deadlines for toys deliveries at Christmas time Review the production scheduling to agree with the specific job orders to avoid overproduction of toys that are not scheduled for delivery

The risk of labor insecurity; potential strikes
Review labor contracts and minimum wage government regulations; negotiations with union and labor boards
The risk of unknown competition on international markets
Use various econometric and statistical analysis to monitor the movement of market interest
The risk of foreign exchange
Use a foreign exchange contract
Accept payment in one currency only (US)
Hedging of foreign exchange
Risk of unanticipated or sudden changes in regulations, codes or standards in regards to the exploitation of the wood and equipment and machineries used The company has to be actively involved in the development of regulations, codes and standards to further improve the safety of the equipment The risk of damage to ecology, scenery due to over exploitation of forestry Use environmental mitigation programs able to protect and restore the forest Government fire protection programs

The risk of accidents in the process of transportation of the logs
Regular monitoring of the vehicles
Checking drivers hours of work implementing special schedule of hours
Risk of loss of licensing for cutting and harvesting the trees Renewal in advance of the licenses, request from government of auditing the harvesting areas
The risk of logging and lumbering fire damage and vehicle damage Forestry and timber Insurance that focuses on logging and lumbering, sawmills, automobiles and equipment The risk related to the liquidity and payment schedules which could lead to credit losses Establish rules for tendering, levels of approval authority and rules for credit control

The risk of reporting erroneous financial information for internal and external decision Use external appraisers to evaluate fair value of assets and properties Senior managers should assess their financial reports to determine when they require estimates based on significant judgment; And ensure that independent expertise is applied in deriving the reports

The risk mitigation step involves development of mitigation plans designed to manage, eliminate, or reduce risk to an acceptable level. Once a plan is implemented, it is continually monitored to assess its efficacy with the intent of revising the course-of-action if needed. I would like to reiterate as stated in the IAA Standards that the organization should fully understand that management remains responsible for risk management. As Internal auditors, we should provide advice, and challenge or support managements decisions on risk, as opposed to making risk management decisions. Below are some of the responsibilities that will not fall under the audit team:

¢ Setting the risk appetite.
¢ Imposing risk management processes.
¢ Management assurance on risks.
¢ Taking decisions on risk responses.
¢ Implementing risk responses on managements behalf.
¢ Accountability for risk management.

Question 4

To: Director of Internal audit Department
From: ¦. Assistant Director Internal audit
Date: October 06, 2014

As requested, I have prepared a plan for auditing the division of Student Services as part of the Central College Institution. I will detail 6 steps in the audit process but firstly I want to highlight the Standard 2200, Practice Advisory 2200-1 that states the requirements for the engagements planning and outlines the steps. Internal auditors must develop and plan for each engagement, including the engagements objectives, scope, timing and resource allocations. The Internal auditor plans and conducts the engagement, with supervisory review and approval

1. The first step is: To obtain specific knowledge of the unit to be audited.

In this stage of the process we will gather and review the specific documentation that will help us getting more familiar with the division of food service residential and campus. Some of the documents we will be reviewing: The annual budget; we have information about how much the overall budget is (8.9mil.); need to know how much is allocated to the food service program and how is spent. Policies and procedures

Previous internal audit papers and reports
List of the staff; org charts
Contracts with food suppliers
Documented projects and how the implementation process took place Upon reviewing of the documents we will be able to assess the problems that incurred; it will help us identify any managerial mistakes, any miscommunication between suppliers and management; if there is enough staffing

2. The second step in the audit plan is to: Establish the audit objectives and the scope of the audit.

At this stage we need to review all the activities involving food service program step by step. This is to identify areas of weakness, why there are negative reviews; why there is such a small budget allocated to such important segment in the students activity in the campus. Also we will be able to identify whether the appropriate policies and procedures were followed. Is the part time staff working in the 6 food service facilities skilled for the specific job they do? Why there is only part time staffing and no full time jobs; if there are enough employees considering the large division of food service included 6 cafeterias and restaurants plus residential food service.

3. The following step is: The audit methodology.

In this stage of the audit process we will be able to gather additional information by interviewing individuals involved in all aspects of the student services division. We will be asking questions in order to determine if there are possible weaknesses that can have a major impact of the effectiveness of the operating and managing the 6 restaurants and cafeterias as well as the residential food service. We will be interviewing the part time staff about the schedule they have, if there are any complaints, if there is enough coverage at specific time of the day i.e. morning and lunch for the cafeterias and the restaurants. We will be interviewing the students and teachers about the hours of operation of the locations of the food service they should be open late and they are actually closing early. We will be asking questions about the meal plans and find out if there is anything to improve on

4. The next step is: Determine the audit criteria.

This very important step in the audit program will help us identify some of the criteria we can use in order to better assess the practices in the food service division.


The food service division must have a well established budget and a cost control in place and overseen by qualified staff.

Price Management

There should be a price verification policy in place to manage better the price of meals provided by the restaurants and the cafeteria in comparison to other food providers around the campus (beat the price)


there must be a criteria that analyze and conform with the labor standards  achieve and surpass the minimum wage for the part time employees

Food Quality and diversity

there should be put in place a more divers meal plan based on the requirements and suggestions from the customers (students divers ethnicity) new standards for nutritional meals are put in place and need to be followed

Food locations management

the standards for cleanliness and sanitation that are put in place need to be followed surveys will be handed out or on line surveys to measure the customer satisfaction

5. The following step is: Preparing staffing plans and time budgets

At this stage in the audit plan we are dealing with establishing the budget necessary to accomplish the audit scope and the staff required to accomplish the plan in a timely manner. Since we are dealing with specifics in food industry we have identified areas where there is not enough expertise from our team; therefore we require an additional external consultant (possible a nutritionist that possess the necessary knowledge). For the satisfaction survey we will be using the expertise of the actual marketing staff from the service department to create and implement the survey.

6. The next step is: Communication with management

Subsequently, the audit plan needs to be discussing with the management. We will set up time for a meeting with the management to discuss the details over the purpose of the audit. We need to discuss further about the time allocated to the audit plan and go over each proposal for the relevant criteria that was chosen. In the meeting we will highlight the importance of the management active contribution and support to the audit process.

Warning! This essay is not original. Get 100% unique essay within 45 seconds!


We can write your paper just for 11.99$

i want to copy...

This essay has been submitted by a student and contain not unique content

People also read