Auditing and Risk Strategic Management Order Instructions: Essay 1
Question: Describe 2 different strategies an organization might take and explain the pros and cons of that strategy.
Your essay should provide examples to support your reasoning for each strategy.
Parameters: Each essay should be written using APA formatting, must have at least 2 external sources and a minimum length of 250 words for each essay. See the grading rubric for additional details.
Essay 2
Question: Explain why an organization should complete an external audit of the external forces on the organization. Your essay should provide examples to support your reasoning for why each part is important to the strategic plan.
Parameters: Each essay should be written using APA formatting, must have at least 2 external sources and a minimum length of 250 words for each essay. See the grading rubric for additional details.
Essay 3
Essay 3: Explain why an organization should complete an internal audit/assessment of the internal forces on the organization. Your essay should provide examples to support your reasoning for why each part is important to the strategic plan.
Parameters: Each essay question should be written using APA formatting, must have at least 2 external sources and a minimum length of 250 words for each essay. See the grading rubric for additional details.
Auditing and Risk Strategic Management Sample Answer
There are many strategies that an organization might take. Strategies are comprehensive general approaches that the organization views as necessary in the accomplishment of its mission and the achievement of the future that it prefers. Strategies might take the form of short-term focused organizational efforts or may be far reaching long-term initiatives. An organization normally reviews and considers a variety of widely utilized operational strategies in the determination of how to position itself in the market so as to function successively in the particular environment it will operate in. Two of these organizational strategies that will be discussed here are concentrated growth strategy and the vertical integration strategy (Hillman, Zardkoohi and L. Bierman 2009).
The concentrated growth strategy is one whereby the organization chooses to pay focus on and conduct an upgrade or increment of the market penetration of a limited amount of successful services and/or products that have been considered as the organization’s mainstays (Hillman, Zardkoohi and L. Bierman 2009).
On the other hand, integration involves the choice of consolidating major processes or systems mostly through acquisitions and mergers. Therefore, vertical integration is when the organization chooses to initiate an internal network of supply that places the organization to proximity with the providers or producers (backward integration) or initiate an internal system that places the organization to the proximity of the users (forward integration) (Kaplan and Norton 2010).
Some of the advantages of the concentration strategy include: the organization becomes very excellent at its business; the operational focus on a single market or industry is possible; there is competitive advantage growing with the market, and the current resources and capabilities are valuable. Some of the demerits include no diversification of risks in the market; it may be required that the organization creates capabilities and adds value; it might miss profit and value opportunities, and the industry is generally vulnerable to environmental and industry risks. For instance, the organization might experience reduced selling and purchasing costs but still face reduced flexibility due to the fact it’s locked to its technology and producers (Kaplan and Norton 2010).
Auditing and Risk Strategic Management References
Hillman, A., A. Zardkoohi, and L. Bierman. (2009) “Corporate Political Strategies and Firm Performance.” Strategic Management Journal, January, 67–82.
Kaplan, R.S., and D.P. Norton. (2010), The Balanced Scorecard: Translating Strategy Into Action. Boston: The Harvard Business School Press.
Task Two
It is important that an organization completes an external audit of the external forces on the organization. The auditors will examine the organization’s operations and record to make sure of the accuracy of financial statements. External auditors play an important role in the establishment of the credibility of the organization’s business especially in the compliance with tax laws. The importance of external audit can be listed as ensuring compliance, providing credibility, critiquing the internal process, and double-check of internal audit (Selim, Georges and David 2008).
It is through an external audit that an organization can determine whether they are in compliance with the entire realm of internal revenue rules of service. For instance, the company behavior maybe non-compliant with the rules something that cannot be noted internally for fear of repercussions (Selim, Georges and David 2008).
Credibility is ensured if an external auditor makes an evaluation and affirms their accuracy. Consider a new business searching for a reputation in the first years of its operation, the company will need less biased personnel to approve their financial statements so as to achieve that much-needed credibility and reputation (Reider 2014).
The internal process of the organization can only be critiqued effectively by external auditors. For instance, the company may be wasting time and money in its operations something that cannot be noted from inside, but, external auditors can devise remedies to promote efficiency and reduce time wastage (Reider 2014).
Double checking internal audit may be crucial to be addressed from external perspectives since the internal auditors maybe too close to the organization. For instance, they might be lacking the needed experience and competency (Reider 2014).
Auditing and Risk Strategic Management References
Reider, Harry R. (2014). The Complete Guide to Operational Auditing. New York: John Wiley & Sons, Inc…
Selim, Georges M. and David McNamee (2008). Risk Management: Changing the Paradigm. Altamonte Springs, FL: The Institute of Internal Auditors Research Foundation.
Task three
Majority of large companies, government agencies, institutions, and state, local and federal governments have established functions for internal auditing there are several reasons why the internal audit is crucial in organizations as reviewed below.
It is only through an internal audit that reliability and integrity of operating information and financial records and a means to measure, identify, report and classify such information using an internal perspective can be done. For instance there might be, a restriction on what auditors should evaluate and report to the management, and hence the external auditors are not appropriate (Frigo et al 2013).
Secondly, internal auditors come in handy in the review of internal systems that are mainly established to make sure policy compliance to plans, policies, laws, procedures, contracts and regulations are achieved. For example, these mentioned internal systems could have a significant impact on the reports and operations, and determine whether the organization inhibits compliance (Fargason 2012).
External auditors cannot possibly be used to review the safeguarding means of assets, as required, and verify such assets’ existence; or conduct an economy appraisal and efficiency with the employment of resources. For instance, the type of audit may require that the auditors typically operate under an approved charter board that underlines their function, scope and objectives, (Fargason 2012).
Last and not the least, internal audit is crucial in the review of programs or operations to prove the consistency of results with the establishment of goals and objectives. The internal audit for example will serve to ascertain whether or not the procession of the programs follow the outline schedule (Fargason 2012).
Auditing and Risk Strategic Management References
Fargason, James Scott, (2012). Law and the Internal Auditing Profession. Alamonte Springs, FL: The Institute of Internal Auditors.
Frigo, Mark L., Krull, George W., and Stephen V.N. (2013). The Impact of Business Process Reengineering on Internal Auditing. The Institute of Internal Auditors Research Foundation.
