Page 13 - SCS May 2018 - Day 2 Suggested Solutions

SUGGESTED SOLUTIONS

This risk should be explored, though there may be compensating controls already in place to
“catch” any errors or deliberate negative actions, as part of policies and procedures in place (see
below)

Policies and procedures

Formal policies and procedures guide staff on how to perform certain day to day tasks.

There may be a tendency to think of policies and procedures as too bureaucratic, especially when
working in a dynamic company and environment like Couchweb. Staff may see additional rules as
hampering their ability to make independent, creative decisions quickly. However, it is essential to
keep an eye on such controls especially where the safety (on a production set, for example) or
consumer data security is concerned.

The policies require communication and regular (re)training so that staff are aware of them.

Job contracts

It would be expected that staff will be given employment contracts which will include such details
as job role specification, hours, place of work, job term, salary and title. This helps to guide the
behaviour of staff. In the case of Couchweb, in the production of own content there may be a lot
of temporary staff and clear wording on expectations of behaviour will be important.

The job description may form the basis on which staff are later appraised therefore guiding their
behaviour at work.

Feedback and appraisal

Regular feedback and communication is a key aspect of management control. If Couchweb is
measuring its performance against certain targets, this information needs to be passed on to staff.
This will also help drive employee behaviour in the desired direction.

Formal, regular appraisals help to encourage good behaviour and highlight individual poor
performance so that it can be addressed and improved.

Reward and discipline

Reward schemes should motivate staff and encourage the company to achieve its objectives.
Couchweb may wish to consider introducing incentive schemes to drive certain behaviour
amongst its staff. For instance, there could be targets set around the proportion of own content
material viewed by members, this could help reduce the overall cost of content for Couchweb.

On the flipside, disciplinary procedures act as a deterrent and set an example of what behaviour
will not be tolerated. We may wish to investigate how often disciplinary procedures have been
invoked. If the proportion is very low, it may mean that staff are following the expected rules as
desired. Or it may mean that the managers are turning a blind eye to inappropriate employee
activity.

Such management controls form part of the overall internal control system within an
organisation. Their effectiveness can be boosted however by ensuring an organisation has a
strong internal control system overall.

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