Machine Translated by Google Task 7.1 Case Study Management Control ElectroSmart Inc. is a company that is engaged in the manufacturing and sale of smart home appliances. The company has experienced rapid growth in recent years, but faces significant challenges in its internal operations, mainly in the production department and in the supply chain. ElectroSmart has recently introduced a new line of smart home products. However, the production department has reported high variability in the quality of the final products. Management has established quality standards, but has not implemented a regular review system to ensure that these standards are consistently met. At a weekly operations meeting, warehouse manager Adrian reported that his department has faced several significant delays in the delivery of essential raw materials, causing unexpected production stoppages. Although suppliers have been selected for their competitive costs, no formal assessment has been made of their reliability or ability to meet deadlines. On the other hand, Operations Manager Jessica has detected that ElectroSmart's inventory management system has recently reported discrepancies between recorded and physical stock. These errors have led to over-orders, which has increased storage costs. The last inventory audit was conducted more than a year ago. year. As a result of the above situation, Jessica asked the managers of the production and sales departments, Arnaldo and Patricia respectively, on what they have done to resolve the situation which has resulted in sales of products not available in stock. It was found that coordination meetings between them are sporadic and do not always include all relevant department heads. Customer service department manager Roberto has seen an increase in complaints regarding defective products. Although the manager indicates that he has a record of the complaints, he was unable to provide a standard procedure for following up on them or for reporting common defects to production. Human resources manager Efraim said that the company's rapid growth has meant that many of the new employees who have been hired have gone straight to work without proper training, especially in the use of inventory management and quality control software. He said he would be taking action. Machine Translated by Google For his part, Pablo, the technology manager, reported that the company suffered a security breach in its internal network, exposing sensitive data. They are investigating the possible situations, but he could not specify why this happened. The general manager questioned whether the department has adequate computer security protocols and whether they were carried out. regular risk assessments. The manager indicated that they were working on that. Instructions for Analysis After reading this case, 1. Identify and discuss the internal control failures described in the case. 2. Analyze the potential consequences of these failures for the company. 3. For each problem identified, propose recommendations that include control mechanisms and metrics for each problematic situation identified. 4. Reflect on how ElectroSmart's organizational culture may be influencing the internal control failures observed. What aspects of the organizational culture should be modified to improve the effectiveness of internal controls and ensure successful implementation of corrective measures? After reading the case, 1. Write an introduction in which you present the topic of control. 2. Identify and discuss the internal control failures described in the case. 3. Analyze the potential consequences of these failures for the company. 4. For each problem identified, propose recommendations that include control mechanisms and metrics for each problematic situation identified. 5. Reflect on how Electro Smart's organizational culture may be influencing the internal control failures observed. What aspects of the organizational culture should be modified to improve the effectiveness of internal controls and ensure successful implementation of corrective measures