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    Case AnalysisOA

    Uploaded by

    Joelo De Vera
    The document discusses audit findings related to excessive employee turnover at a company called Bes Corporation. It provides answers and recommendations for four questions: 1. The auditor should raise high turnover as an internal control deficiency to management and suggest understanding its negative impacts like low morale and loss of knowledge. 2. Recommend recalibrating labor practices like hiring more employees to redistribute workloads, improving leave benefits, and ensuring fair compensation for overtime work. 3. Yes, there are objectivity problems as internal audit reports to controllership rather than an independent audit committee. It recommends establishing an independent audit committee. 4. Internal audit's location under controllership is inappropriate and compromises independence. It should directly report to

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    Case AnalysisOA

    Uploaded by

    Joelo De Vera
    494 views2 pages
    The document discusses audit findings related to excessive employee turnover at a company called Bes Corporation. It provides answers and recommendations for four questions: 1. The auditor should raise high turnover as an internal control deficiency to management and suggest understanding its negative impacts like low morale and loss of knowledge. 2. Recommend recalibrating labor practices like hiring more employees to redistribute workloads, improving leave benefits, and ensuring fair compensation for overtime work. 3. Yes, there are objectivity problems as internal audit reports to controllership rather than an independent audit committee. It recommends establishing an independent audit committee. 4. Internal audit's location under controllership is inappropriate and compromises independence. It should directly report to

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    The document discusses audit findings related to excessive employee turnover at a company called Bes Corporation. It provides answers and recommendations for four questions: 1. The auditor should raise high turnover as an internal control deficiency to management and suggest understanding its negative impacts like low morale and loss of knowledge. 2. Recommend recalibrating labor practices like hiring more employees to redistribute workloads, improving leave benefits, and ensuring fair compensation for overtime work. 3. Yes, there are objectivity problems as internal audit reports to controllership rather than an independent audit committee. It recommends establishing an independent audit committee. 4. Internal audit's location under controllership is inappropriate and compromises independence. It should directly report to

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    494 views2 pages

    Case AnalysisOA

    Uploaded by

    Joelo De Vera
    The document discusses audit findings related to excessive employee turnover at a company called Bes Corporation. It provides answers and recommendations for four questions: 1. The auditor should raise high turnover as an internal control deficiency to management and suggest understanding its negative impacts like low morale and loss of knowledge. 2. Recommend recalibrating labor practices like hiring more employees to redistribute workloads, improving leave benefits, and ensuring fair compensation for overtime work. 3. Yes, there are objectivity problems as internal audit reports to controllership rather than an independent audit committee. It recommends establishing an independent audit committee. 4. Internal audit's location under controllership is inappropriate and compromises independence. It should directly report to

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    Answer & Explanation Verified Solved by verified expert Rated Helpful Hi, I'd love to help you with

    your
    questions above. Rest assured that I will try to the best of my ability to provide answers that are
    meaningful and adds value. Hope I get to help you. Good luck with your studies!

    Step-by-step explanation Answers:

    Question 1: What are the procedures to be done in terms of the fieldwork stage of an internal auditor as
    a response to an audit finding number 1 (excessive turnover)?

    Answer: The best response to be done by an auditor during audit fieldwork given the audit finding on
    excessive turnover of employees is to raise such concern immediately as an internal control deficiency
    primarily related to operations rather than financial reporting to the management or to those charged
    with governance in the company being audited. We have to make the management or those charged
    with governance understand the negative impacts of a high turnover rate. Ultimately it could result in
    low employee morale. Its immediate consequences could be extreme because it could make employees

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    lose confidence within the organization. As a result, it is highly probable that there would be a loss of

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    valuable knowledge and experience that cannot be easily replaced.

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    Question 2: What are your possible recommendations as an internal auditor as a response to an audit

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    finding number 1 (excessive turnover)?
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    Answer: Putting myself in the place of the auditor, the recommendation that I would suggest in response
    to the audit findings on excessive turnover is for the management or those charged with governance to
    recalibrate their existing labor practices. Essentially, one major reason I see why there is an excessive
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    employee turnover is because of overworked and unsatisfied employees who have had increased
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    workloads and responsibilities due to a lack of an active or trained workforce. My suggestions would be:
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    1) to hire more employees and train them so that the workload would be redistributed and not heavily
    incline on few employees,
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    2) recalibrate their vacation leave/ sick leave benefits to make it more enticing for the employees to stay,
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    3) do a shifting schedule to lessen the heavy workload,

    4) provide these employees with perks and benefits to acknowledging the value they provide in the
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    company. By acknowledging their contribution, we boost employee morale and


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    5) ensure that these employees are well-compensated and proper checking of overtime work is in place.
    Of course, their overtime work must be fairly compensated.
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    Question 3: Based on the audit findings above, are there any objectivity problems with Bes Corporation?
    Explain. Furthermore, if you happen to answer "yes", provide also recommendations on how to
    minimize/eliminate any objectivity problems. If you happen to answer no, after your explanation, just
    indicate "recommendations not applicable"

    This study source was downloaded by 100000792988765 from CourseHero.com on 09-16-2021 23:01:43 GMT -05:00

    https://www.coursehero.com/file/106408572/case-analysisOAdocx/
    Answer: Yes, I see objectivity concern. First and foremost, the internal audit department is not entirely
    independent from the controllership function. This should not be the case. I recommend that a separate
    body called an audit committee be established within the organization. This will be totally independent
    from the controllership and should be directly reporting to those charged with governance. Doing so,
    would minimize if not totally eliminate bias in the audit reports and audit findings they submit. They
    should act for the benefits of the public interest and not pursue management objectives which would be
    conflicting to their role.

    Question 4: What if the internal audit department is part of the corporation's controllership function,
    and copies of the internal audit reports are sent to the board of directors, evaluate the appropriateness
    of the location of the internal audit department within Bes' organizational structure.

    Answer: The internal audit department of the corporation seems to be not appropriate in relation to
    where it stands in the organization. Internal audit department serves as the watch dog and in a way
    checks and balances of the controllership function. They should be independent and they should be

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    objective whenever they are assessing financial reporting concerns or internal control deficiencies. As

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    such, I think it is better to have an audit committee instead that is directly reporting to those charged

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    with governance and not under the umbrella of the controllership function. They should not allow bias,

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    conflict of interest or undue influence override professional or business judgments.

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    This study source was downloaded by 100000792988765 from CourseHero.com on 09-16-2021 23:01:43 GMT -05:00

    https://www.coursehero.com/file/106408572/case-analysisOAdocx/
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