j. Unemployment tax paiu-leuci 10. Risk analysis and internal controls. In each
ID: 418804 • Letter: J
Question
j. Unemployment tax paiu-leuci 10. Risk analysis and internal controls. In each independent situation below, identify a al controls to address it. describe at least three risks. For each risk, suggest two intern a. (CMA adapted, June 1992) Midwest Electronics Corp. manufactures computers. Recently its products have met stiff competition from lower-priced imports, and the firm is seeking ways to improve its workers' productivity in order to maintain its market share. Over lunch in the company cafeteria, Alice Kumar (manager of the Accounting Department) and Greg Mossman (manager of the Sales Department) recently discussed a presentation made to theExplanation / Answer
Answers:
a) Three risks:
Measures to control:
To face the competition from low priced importers, the company must adopt new strategies like lower prices, product innovation etc. to retain its market share. To stop Midwest employees forming unions, the organization must motivate its employees by providing other benefits apart from its salary in order to achieve its new strategies.
b) Three risks:
Measures to control:
The company must try to focus equal attention on all its boards rather than introducing a new board with new technology. This can help the company to control its costs. The board which is competitive & price sensitive must be marketed carefully to gain market share. A board which has been introduced newly with new technology must be cautious in doing so & and adopt various measures like staff training etc. to make the new technology successful.
c) Three risks:
Measures:
Rather than venture financing, the company may go in for some other source of finance for its research or must be careful in conducting its research to continue with its venture capital financing. The company can go in for public offering immediately rather than waiting for approval for its projects which can sometimes result in the decision getting withdrawn.
d) There are no risks available in this situation from my viewpoint.
e) Three risks:
Measures:
Rather than leasing, the company can go in for direct hiring for meeting its increasing customer base. Cost of hiring can sometimes be less than cost of leasing & the company cans also assured of retaining its existing employees.
f) Three risks:
Measures:
The stores while going for remodeling can try to get the customers feedback even though it has succeeded in its test. By going for survey, the company can be cautious enough on its decisions to avoid losses & reduce on unnecessary expenses.
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