Can you describe how internal control procedures can mitigate the financial fraud risks for the Heinz company?
Question:
Can you describe how internal control procedures can mitigate the financial fraud risks for the Heinz company? Where the board would like to develop a risk management plan. The Heinz company needs to be the victim of the financial fraud committed by (a) dishonest employee(s) that results in personal benefit to the employee(s) at a cost to the employer. The employee(s) can be at any level including the top managers such as CFO or CEO. Also, the employee(s) could collude with each other and/or with an external party such as suppliers or customers to perpetrate the financial fraud.
In addition, we need to clearly state the financial fraud risk for the board so that they can understand the issue that you have identified. What are the recommendations to mitigate the financial fraud risks should be based on the six principles of internal control (e.g., segregation of duties) and the best practices of corporate governance (e.g., having independent members with financial expertise to serve on the audit committee). When they have asked to identify and prioritize ten financial fraud risks facing the company and suggest how each risk could be managed. Please , it needs to clearly contemplate the important items below in the report:
MUST use the three clear headings: Risk, Implications of the risk, and Recommendations to address EACH risk (RIR). The RIR analysis is a method for achieving the required depth in your analysis when discuss the financial fraud risks. Plus to identify EACH risk, explain the implications of EACH risk, and then provide reasonable recommendations to mitigate EACH risk separately.
In your response, state the risk for the board so that they an understand the issue that you have identified. The second step is to analyze the risk that you have identified. That is, provide the implications of the risk. This tells the users why the risk is an issue and helps them to understand its significance. State the negative impacts of the risk that you have identified. Finally, recommend reasonable course of actions to mitigate the risk identified. Tell the users exactly what they should do. For example, consider specific internal control procedures. Provide citations of external research to help you come up with relevant financial fraud risks, identify their impact, and make appropriate and specific recommendations.
Finally:
Provide a colourful heat map to visually analyze and compare different sources of financial fraud risks. In assessing risk, two main factors are considered. The first is the likelihood that the risk event will occur and the second is the impact of the risk on the company. Give clear reasons to justify the prioritization of the risks. Provide citations of external research to support your discussions.
Auditing Cases An Interactive Learning Approach
ISBN: 9780134421827
7th Edition
Authors: Mark S Beasley, Frank A. Buckless, Steven M. Glover, Douglas F Prawitt