Mahusay Module 2 - Acc4115

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Name: Jeth A.

Mahusay Subject: Risk Management and Internal Control


Instructor: Ms. Anna Mae Magbanua, CPA Date: May 2021

Risk Management Framework Documentation


Risk Management Plan
Intentions and Directions
Patac's sari-sari store intends to be prepared for the identified risk by
devising a viable strategy to mitigate the risk. By recognizing, assessing,
and managing risk, it intends to remove any potential danger.
Risk Management Purpose/Objectives
The main objective of Patac’s sari-sari store risk management plan is
to identify the risk, assess and manage it responsibly with the supervision of
the owner of the store and the cooperation of the employees in eliminating
the risk.
Key Roles and Responsibilities
The risk management plan's duty and job is to guarantee that the risk
prevention solution is effective in removing the risk.
Risk Management Governance Arrangements
All employees are expected to obey the regulations, and each is given a
specific task to complete in order to manage the risk.
Procedures
Following the identification and evaluation of the risk, the execution of risk
prevention is carried out.
There are different risk that are identified in Patac’s sari-sari store namely;
1. Thievery – In this risk, the procedure will be installation of surveillance
camera, be aware of high-risk items, and train your employees to be
on the lookout for theft, highlight the repercussions of theft, and
interact with customers, and checking the record of camera everyday.
2. Poor Accounting Records – To audit the accounting records, every
employee is obliged to document every transaction in the business.
Risk Management Policy
Scope of Risk Management
All activities and processes related with Patac's sari-sari store's normal
operation are covered by this policy.
Strategy and Approach
At each stage of the risk management process, consultation with
employees with relevant experience is essential. Patac's sari-sari business is
more likely to recognize all risk and implement effective risk controls
because it draws on the experience, knowledge, and ideas of its employees.
Workers at Patac's sari-sari business must follow instructions and
procedures, and they will do so more successfully if they were involved in
their creation, understand why they exist, and how they work.
Resources
The purpose in dealing with risk and eliminating risk is the first
resource to be employed in implementing risk management policy, followed
by working employees and technology to implement the policy.
Procedures
The first step is to identify a suitable policy that will undoubtedly
improve risk management control effectiveness. The second phase is to put
the risk management policy into action, and the third is to assess the impact
of the policy after it has been implemented.
Responsibilities
All owners and staff with relevant scopes of responsibility and
authority are accountable for identifying, analyzing, evaluating, responding,
monitoring, and communicating risk connected with any activity, function, or
process.
Risk-reduction strategy
Patac's sari-sari store is safeguarded from any incidents that could
result in the store's loss in the future. It also lowers its risk of losing money.
The store's continual aim to prevent risk is to carry out its core functions,
accomplish its objectives, and support the store's future. The risk to the
Patac's sari-sari business and its backers has been lowered.
Management Techniques
All employees are taught to work in a culture where risk is always
identified and avoided. Risk management's purpose and objectives were
always followed.
Risk Management Procedure
Detailed Roles and Responsibilities
Owner
1. Establish a culture that drives the risk management.
2. Ensures every employees inspires to do their part in taking the roles of
risk management controls.
3. Evaluate the efficiency of the established risk management plan.
4. Make a good connection to the employees by hearing their voices of
their experience in implementing risk management plan.
Employees
1. Compliance of the rules and regulation in implementing risk
management plan.
2. Contribute to the establishment and implementation of risk
management systems for all functions and activities of Patac’s sari-sari
store.
Detailed Description of Process Steps
1. Identifying the risk of Patac’s sari-sari store.

Risk can be found at Patac's sari-sari store at any moment.


Employees' experience is used to identify risk. Generally, persons who
are exposed to the environment are able to recognize the risk quickly.

2. Assess the Risk

Depending on the type of risk and the information, data, and


resources available, a risk assessment can be done in various levels of
depth. Patac's sari-sari business assesses risk by having a
conversation with the owner or using risk analysis tools and
methodologies advised by safety professionals.
3. Control the Risk

Patac's sari-sari store weighs the numerous control choices and


selects the one that most effectively eliminates or reduces the risk in
the given situation. This could be a single control measure or a set of
measures that, when combined, give the highest level of efficacy that
is reasonably possible. Some issues are simple to remedy and should
be done right away, while others will require more time and
forethought. Patac's sari-sari store prioritizes areas for action among
those needing more work, focusing first on those problems with the
highest level of risk.

4. Review Control

To successfully inspect the store and limit health hazards, quality


assurance of the control risk should be developed. Patac's sari-sari
store will also solicit staff feedback to see if any changes can be done
to make the store safer.

Risk Rating Scales

Likelihood Minor Significant Serious Major Fatality


of
Occurrenc
e
Very
Unlikely
Slight
Feasible
Likely
Very Likely

Very Unlikely – the risk hasn’t occurred before.


Slight – the risk rare occurs.
Feasible – The risk is possible to occur but not common.
Likely – The risk has occurred before, but can be occurred again.
Very Likely – The risk occurs frequently.
Risk management Activities
Risk control refers to a collection of procedures used by businesses to assess
prospective losses and take steps to mitigate or eliminate them.
Risk Assessment is a phrase used to describe the total process or approach
of identifying hazards and risk factors that could cause harm (hazard
identification). Analyze and assess the risk posed by that hazard (risk
analysis, and risk evaluation).
Risk management is the process of identifying, evaluating, and prioritizing
risks, then deploying resources in a coordinated and cost-effective manner
to reduce the likelihood and impact of unfortunate events or to optimize the
realization of opportunities.

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