You are the internal auditor for a private company, Cleanco. Cleanco provides cleaning services to shops and
Question:
You are the internal auditor for a private company, Cleanco. Cleanco provides cleaning services to shops and offices and has a reputation for high quality work. You have been asked to review the human resources, procurement and marketing functions within the company.
Cleanco employs about 500 cleaning staff, all of whom are on the payroll, and most of whom work part-time. Cleanco does not employ sub-contractors. Cleanco has a high turnover of staff.
The company buys its computers, office stationery and furniture, cleaning materials, equipment and work clothes for staff, from a variety of different suppliers. It processes its payroll in-house.
The company has recently decided to out-source its marketing to a large, aggressive, third party company that will advertise Cleanco's services by means of direct mail, sometimes by offering discounts; this company has been criticised in the past for breaching advertising regulations. There is growing price competition in Cleanco's market. Cleanco is struggling to maintain its profitability and would like to expand its client base.
Cleanco has three main functions;
i) Human resources;
ii) Procurement;
iii)Marketing.
Required:
For each of three main functions at Cleanco describe the:
(a) Risks that you expect the company to face;
(b) Controls you expect to be in place to manage the risks you have identified:
(c) Tests of control you should perform to check that the controls you have identified in are operating properly.
Marks will awarded as followa:
(i) Human resources
(ii) Procurement
(iii) Marketing
You may present your answer in tabular format, if you wish.
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston