Wk 7 Walmart Audit (COMPLETE PACKAGE)

Running head: WALMART 1

WALMART 6

Walmart Audit: Work Program Phase

Marcos Vazquez

DeVry University

Culture is very important determinant of the firm’s performance as it acts as the guideline of the company’s operations. Walmart and its associates are guided by its commitment of providing the best to its customers at a relatively lower cost. Its commitment to its customers is based on its fundamental goal of “saving people money so that they can live better”. This commitment has been in place since the early days of the company with its founder, Sam Walton.

Through its strong culture, commitment and beliefs, Walmart has grown since it opened its first door in 1962 in Rogers, Ark. Its global brand is currently serving more than 260 million customers per week spread over 11,500 locations in over 28 countries and through its e-commerce in 11 countries. The culture behind Walmart success has been built through strong leadership and unity for purpose by all the stakeholders. Walmart senior management believes that each of its associates have a critical role in driving the business of the company.

To achieve its mission and maintain its stakeholders trust, the company as well as its associate must maintain a high integrity and comply with all the laws of the communities in which it operates. This is critical to the company’s success. Over the years, Walmart has built a strong foundation of integrity through implementation of the various global compliance program. Through its audit committee which involves the board of directors and senior management, the company has established compliance objectives to be accomplished in its operations. The audit committee regularly reviews the company’s development to ensure that it achieves its set objectives. The culture therefore, acts as a control in the operations of the company’s operations.

Most the companies engages in aggressive growth target in order to improve their performance and generate more wealth. Aggressive growth is achieved through have the right people running the business with innovative ideas and developing good customer experience. This is achieved through building the right culture, which acts as a driver for the business growth. Since its inception, Walmart has been engaging in massive aggressive market growth. This has ensured that the company’s product is available in almost every household in the United States and its associates has also expanded. According to the Walmart annual report 2017 report, the company is already number 2 e-commerce player in the U.S market. It has set aggressive targets in 2018 aiming obtain 40% of its sales from e-commerce and add more than 1000 online grocery pickup locations as well as improve its product through its mobile app, Jason Purcell (2018). To achieve its aggressive goal, the company needs the efforts of all the stakeholders.

Expense to Revenue

Financial audit focuses on the financial controls in relations to reporting. The audit mainly focus on the accounting controls in the general ledger system and it is done by the external auditors (Lance Osborne, 2015). On the other hand, operational audit take keen interest on the review and assessment of the business operations. The operational activities of an organization has direct or indirect effect its financial performance. The operation audit is conducted by internal audit and it is used by the organization to review its activities (Lance Osborne, 2015). The expense and revenue is the function of the management of an organization, hence the review of expense ratios and revenue growth is operational audit.

The management of the company is also concern with the performance of its competitors as well as the overall industry performance. This helps the company to gauge it's performance against its peer competitors as well as check whether it is at par with the industry. The competitor performance and industry trends is therefore, a factor of for an operational auditor.

Walmart is currently the world largest retailer in terms of market share and the net worth. Its products is used in almost every household in the US and some other countries. Its performance has been boasted by its e-commerce platform as well as selling its products at relatively lower prices than its competitors. The acquisition of Jet.com has further increase the competitive advantage of Walmart over its peer competitors. The company enjoys economies of scale as it obtains its product in bulk from its supplies and therefore, able to price at a relatively lower price than its competitors and still make huge profits. Walmart is therefore, ahead of its competitors and at par with the industry.

Accounting department/ Internal audit/external audit.

During its audit planning, the external auditors should perform preliminary assessments of the internal audit of the organization, when it is clear that some particular internal audit work is necessary in the performance of the external audit. The auditors may also utilize the internal audit work in coming up with their opinion. Internal audit and external audit should meet periodically, since there are some tasks which are performed by both, hence need for coordination to avoid redundancy. The exchange of information between the two results in better coordination and understanding of their respective functions and responsibilities, (Jake LeBrun, 2017) . The external auditor need assistance from the internal auditor in order to understand better the organization and plan its audit well. However, the relationship between the two may lead to the external auditor being compromised, hence not able to give independent opinion. The Walmart has internal audit committee responsible for checking snd and assessing the internal control system of the company and ensuring that all the laid down procedures are followed. Its external audit perform assessment of the company's financial statements and give an opinion on whether the financial statements represent the true, fair and verifiable financial statements. The internal and external audit of Walmart independent.

Senior management

The competence of the senior management is key determinant of the company's performance. The senior management of Walmart is responsible for setting the organization strategic plans as well as motivating the employees to achieve the set targets. The management ensure that I the set activities are executed as plan in order to increase income for the company. They continually come up with innovative ways which increases efficiency in operations. The senior management competency is therefore an operational audit opportunity.

Segregation of duties is a key component of internal control in an organization. It ensures that error and fraud is minimize by making sure that no one person has

ability to commit and conceal errors and fraud in the Normal course of performing their duties, (Pen Internal Audit, 2012). The approval, custody of assets and recording transaction are done by different people. Segregation of duties is therefore operational audit opportunity.

References

Jake LeBrun, 2017. The Relationship Between Internal and External Audit. Accessed online https://bizfluent.com/about-7379286-relationship-between-internal-external-audit.html accessed on 22 March 2018

 Jason Purcell, 2018. Retail Touch Points. What Walmart’s Aggressive E-Commerce Target Means to Your Brand. Accessed online https://www.retailtouchpoints.com/features/executive-viewpoints/what-walmart-s-aggressive-e-commerce-target-means-to-your-brand accessed on 22 March, 2018.

Lance Osborne, 2015. The Difference between Operational Audit and Financial Audit. Accessed online http://www.osbornefinancialsearch.com/operational-vs-financial-audit-toronto/ accessed on March 22, 2018

Pen Internal Audit, 2012. Segregation of Duties. Accessed online http://www.upenn.edu/oacp/audit/audit101/operational-controls.html