Wk 7 Walmart Audit (COMPLETE PACKAGE)

There is need to interview the employees and the managers to get a better understanding of the culture. Such individuals have worked in the firm and can provide first-hand information on the various processes, beliefs, and manner in which things are done. Besides, the different rules that the staff has to adhere to while carrying out their business are also very crucial. The risk tendencies can be based on the various choices the team make on a daily basis. This may show whether the firm is risk-seeking, risk averse or risk neutral. This can also be looked at from the capital budgeting decisions. Besides, the audit personnel can observe the way things are done in the firm. This may include things such as the discipline, conflict resolution, orientation of employees, staff relationships and engagements. Documents showing the culture in the organization may also provide valuable insight into this. Besides, the policies and procedures will provide insight into the Walmart culture. Walmart engages in an aggressive growth target that seeks to increase its market share and penetration. The firm has been keen on the use of technology to reach the potential customers. This is underscored by the application of online marketing and selling. Just like Amazon, Walmart runs e-commerce that displays the various products, their prices and the offers the customers can enjoy. The potential customers can make orders for the firm’s commodities using an App that can be installed on their phones. The aggressive style has resulted in a 12% increase in revenues and an 8% increase in selling space. This has been fanned by the growth witnessed in various market segments. The tone of this firm is a persuasive one as the managers are keen to make sure the staff achieves the corporate strategies.

Expense to revenue

The expense ratios to revenue growth is a financial audit that is essential to the audit team. Revenues and expenses are crucial to the computation of the profit in the business. The expenses management can show how a company is using the cost leadership strategy to keep its expenses within minimal levels. The auditor needs to establish and ensure that the various costs and revenues are well documented. This can be determined by the audit team requesting for proper invoices and receipts. There have been cases where the managers have manipulated the books of accounts. This has been done by reporting fewer costs and increased revenues. This results in higher profits being reported in any fiscal period. The competitor and the industry performance form an essential basis for comparative analysis of any company at any particular time. This can be achieved by looking at Walmart solvency, turnover, profitability and the leverage ratios. The market leader can be used to benchmark the firm’s costs and revenues to establish whether the company is performing well or not. The industrial averages can also show the way other firms are also performing. This analysis can be used to rank the various firms in the industry.

Segregation of duties

The accounting department is an integral part of any organization. The various transactions have to be carefully analyzed and evaluated. This involves the entries in the books of original entry, ledgers, statement of financial performance or performance. There should be clear segregation of duties in the respective company (Gramling et al. 2010). This will make sure that each is engaged on the separate duty they are entitled. This will make sure some proper controls and mechanisms will make sure the right person does the right job. Besides, it prevents fraud from occurring in the business. There is need to make sure that the people involved in the selling process are not the ones making entries in the books of accounts. Besides, those receiving payments should be different from the ones banking the funds in the various financial institution. Walmart has a well-defined job description that indicates the multiple duties the staff is hired to undertake in the business. This makes sure that the individuals are well aware of what they are expected to do at any particular time. The various individuals in these departments have the right skills and qualifications to make sure to handle the multiple tasks assigned to them. The advantage of having the right personnel will prevent the occurrence of fraud, creative accounting and ensure proper task management. The segregation of duties can be improved and fostered by making sure the various jobs are put in specific departments.

Senior managers

The senior managers are tasked with the steering of the whole individuals. Such individuals have to be in a position to provide a sense of direction and a strategic vision for the entire company. It is essential for the auditors to make sure they are furnished with the copies of the academic qualifications and experiences of the various managers. The competency of the senior management is an operational audit as the auditors will understand how the organization operates.

Auditor independence

The auditor is expected to be independent. Care has to be taken to make sure that there is no conflict of interest. The auditor should avoid receiving favors from the clients as this can be used to influence their opinion (Arya & Glover, 2014). This will make sure that the work of the audit team is professional and above board at all times. The audit company should make sure it does not offer services to only a single firm. This may compromise their independence as the client is the primary source of revenue for the auditors. Besides, the audit personnel should be rotated from a company to make sure there is a reduced familiarity threat. The managers and the company personnel should make sure there is a good relationship with the external auditor. The staff should cooperate with the auditors by giving them the information they require, the materials and any an excellent atmosphere to carry out their operations. Auditors should not be looked at as enemies but rather individuals just carrying out their business.

Conclusion

Walmart is a famous company in the retail market. Its policies and strategies have contributed to the growth and expansion. However, the financial performance should not be looked at face value. There is need to audit the books of accounts to make sure they portray the real nature of the events in the organisation. Besides, the culture of the company should be evaluated to make sure it promotes values and ethics. It is also essential to make sure the senior managers are competent and well suited for the job.

References

Adams, T. J. (2011). Walmart and the Making of “Post-industrial Society”.

Arya, A., & Glover, J. (2014). Auditor independence revisited. Journal of accounting, auditing & finance, 29(2), 188-198.

Gramling, A. A., Hermanson, D. R., Hermanson, H. M., & Ye, Z. S. (2010). Addressing problems with the segregation of duties in smaller companies. The CPA Journal, 80(7), 30.