2. Explain the rationale behind using beta as a measure of risk. Compute the company’s beta based on the divisional betas and compare it with that provided by ValueLine and Merrill Lynch. Explain some of the inconsistencies that can be found in reported betas. Do historical betas provide good measures of the future riskiness of firms (or divisions)?
Inventory and warehouse cycle Inventory accounts for a large portion of a company’s assets and is one of the more significant accounts presented on the financial statement. The effects of inventory can complicate physical control, contributing to more time spent when conducting the audit. For that cause, when constructing audit programs for inventory, the auditor should want to develop a plan such where risks are reduced to acceptable levels for the inventory cash cycle. Such a plan includes description of nature, extent of the planned risk assessment procedures, and above all, timing. In preparing the audit program for Apollo Shoe, Inc. the auditor should consider the primary objective which is to provide assurance to the stakeholders, stockholders, and other interested parties that the financial statements fairly account for raw materials, finished goods, work-in
According to Robbins and Judge (2007), there are several factors that stimulate the need for change; these are nature of the workforce, technology, economic shocks, competition, social trends, and world politics. The above forces are external forces that cause the need for a company to change. For Synergetic Solutions, the external forces for change are technology, nature of the workforce, and competition. The internal forces for Synergetic Solutions are the executive-level decision for a change of services, upgrading employee skills and processes, and the need for a team-based structure. External Forces for Change Synergetic Solutions wants to change the main avenue of revenue by changing the services offered.
Part 1 Question 1 — Strategic Business Risk and Inherent Risk Assessments ! a) Strategic business risk is defined as the risks that business objectives would be attained due to external and internal factor, pressure and forces and is the risk associated with the company’s survival and profitability (Bell et al, 1997). To assess HIH’s strategic business risk properly, the auditor must understand at two levels, (1) the industry in which HIH was operating and (2) how HIH fitted within the industry. SWOT analysis is one of the methods of assessing client’s strategic business risk. It analyses the entity’s competitive situation by assessing its strengths, weaknesses, environmental opportunities and threats.
1 Executive Summary The summary includes a concise but complete description of the problem addressed in this paper, how we propose to solve it as well as recommendations. 1.1 Problem Statement FlexCon is making an effort to redefine itself by gaining a better understanding of strategic insourcing/outsourcing alternatives. This includes focusing not only on cost factors, but also the true sense of what the core competences of the organization are, and whether the product/service under consideration is an integral part of the core competences. Therefore, the company has elected to conduct an internal review in order to decide where product development efforts and strategic investment should focus. During the internal review of the company, Executive Management noted that too much capacity and talent are being allocated to simple, commodity type items, which are providing minimal product differentiation in the market place.
Importantly, by showing the impact of the changing industry regulation, the case provides an example of how an external environmental factor can impact a company’s strategy to achieve competitive advantage and ultimately impact an auditor's assessment of inherent and fraud risk. We
The auditor has responsibility to obtain an understanding of the company as well as its events and conditions related to business risks, which may cast substantial doubt on the company’s capability when performing audit procedure throughout the audit. Following is an illustrative case
* Differences in how sensitive organisations are to their environments provide a useful basis for further system analysis of the public relations function, which relates to the closed and open systems (Study guide 1 for PRO371Q: 15). * It is necessary to establish the relationships between the system and its environment. The organisation’s environment is itself a higher order system composed of its own subsystems. * Public relations rely on research and monitoring of publics, it thus acts by means of suitable communication messages, sign systems and media. Opinions and attitudes held by stakeholder groups towards the organisation are strengthened or changed (Mersham, Rensburg & Skinner, 1995: 47).
The second stage our company offers is to then progress onto what we call a vulnerability assessment. Our risk aware security professionals can assist your organisation is considering each of the vulnerability's to your organisation faces and then assess them accordingly. We base our rating on how severe the impact would affect your organisation on its day to day operations and infrastructure. When we consider our ratings we always refer to the confidentiality, integrity or availability of your organisation can be compromised. Our impact vulnerability ratings are as follows: i.
IDENTIFY WHAT RISK COMMUNICATION IS AND EXPLAIN ITS IMPORTANCE TO THE SECURITY MANAGER. Introduction: What is Risk Communication? Risk communication can express concerns, opinions, or reactions to risk messages and risk issues. It often involves multiple messages about the nature of risk. Moreover, it can provide information for legal and institutional arrangements used to further effective risk issue management (Covello and Sandman, 2001).