S02.1 Outline-Strategy&Objective Setting

School: Nanyang Technological University - Course: BUS 3104 - Subject: Accounting

Nanyang Technological University Nanyang Business School AC3104 Risk Management and Advanced Auditing Semester 2, 2022-2023 Seminar 2.1-Strategy & Objective-Setting Learning Objectives Appreciate the integration of ERM into theentity's strategic plan. Appreciate the linkages of anorganization'smission with its strategic and related objectives, risk appetite and risk tolerance. Required Readings •CERM 2017 Chapter 7 (Pg 45-63) •CERM 2004: Objective Setting-Framework (Pg 35-38), Application Technique (Pg 13-15, 20) Further Reading •COSO 2 Understanding and Communicating Risk Appetite Seminar Discussion 1. Regional budget airlines such as Jetstar Asia and Scoot have become increasingly popular in recent years. [Assume pre-Covid 19 conditions in your discussion] (i)Identify three key characteristics of a budget airline and develop a mission statement and vision appropriate for a budget airline. (ii)Identify one key strategic objective of a budget airline for each of the following: •Fares price •Aircraft turnaround time (iii)For each of the two strategic objectives identified, develop appropriate: a) Strategies; b) RelatedObjectives(Operations, Reporting and Compliance), where applicable; c) Risk Appetite; and d) Risk Tolerance Levels. [Hint: Refer to Exhibit 3.10 of CERM 2004 Application Technique] 2.AC2103 12-13 Semester 2, Exams Question 2 (ii) (8 marks) Vast Empire Ltd. (VEL) is a rising manufacturer of specialized industrial equipment. It has decided to switch its strategic objective from building up its market share to achieving a higher profit margin. The incentive scheme for its sales executives is revamped accordingly. Suggest and explainfour(4)changes to its Risk Appetite that are required for alignment with the new strategic objective. [Hint: Refer to Exhibit 3.10 of CERM 2004 Application Technique and Example 7.5 of CERM 2017 for sample risk appetite statements] 23.AA205 (AC2103) 09-10 Semester 2, Exams Question 2 (iii) modified (8 marks) The sales division is frustrated with the credit department which has persistently refused to grant approval for a large number of potential new customers.Suggest and explaintwo(2)solutions that can help to resolve the conflict.