13.6 Strategic control, concept and models

Question 1

Control (including g________) within an organisation is important to give assurance to s________ that the levels of control are appropriate.

Answer 1

governance

stakeholders

Question 2

The FRC (2014) states:

“the board should establish the tone for risk m_________ and internal c_______”

and

“the b____ should identify what assurance it requires and where there are gaps, how these should be addressed.”

Answer 2

management
control
board

Question 3

Simons (1995) suggested four main characteristics of an effective control system:

• a focus on and capture of the constantly changing informational demands of senior m______
• a recognition that control information must be important enough to demand frequent and regular attention from operating managers at all organisational l_____
• the need to interpret, discuss and challenge the generated data and information in face-to-face m____- between different hierarchy levels
• the control system itself should be seen as a key catalyst for the ongoing debate about the validity of underlying data, a________ and plans

Answer 3

managers
levels
meetings
assumptions

Question 4

To challenge whether the control system is effective, governance professionals can use 6 core questions.

What are these?

Answer 4

1 Who - e.g. who provides the data?
2 What - e.g. what are we trying to prove?
3 When - e.g. when do we need to an answer?
4 Where - e.g. where should we expect issues?
5 How - e.g. how do we prioritise?
6 Why - e.g. why is our system structured in this way?

Question 5

What does HACCP stand for?

Answer 5

Hazard Analysis and Critical Control Points

Question 6

HACCP was initially developed for the food industry, but can be useful for any organisation.

It is a d_____-loop iterative approach requiring the setting of limits and parameters and m________ processes and r_____ of results.

Answer 6

double
monitoring
reporting

Question 7

What is meant by “gap analysis”?

Answer 7

Analysis that looks at the different between the forecast for a particular objective, and the actual results having arrived there. The “Gaps” are the areas where the journey either exceeded or failed to reach expectation.

Question 8

There are four key features of a KPI:

• clearly d______
• based on a______ and reliable data
• r______ to the business
• must have a forward i____

Answer 8

defined
accurate
relevant
impact