- May 11, 2018 at 10:26 am
Hi sir, for December 2009 question 4a) in the answer key , the first point states the following.
To have risk awareness and risk systems embedded implies a number of things. It means that risk management is included within the control systems of an organisation.The case refers to Saltoc’s budgetary control system which will need to reflect the risk metrics in the embedded system.
“The case refers to Saltoc’s budgetary control system which will need to reflect the risk metrics in the embedded system.”
Could you explain this statement ? I don’t quite understand what it’s saying and what is a budgetary control system ?May 11, 2018 at 12:54 pm
When risk management is embedded as an integral element of an entity’s systems, the financial budget should be designed in such a way that risks that are identified by that embedded risk management can be effectively addressed (and managed) and that the budget is sufficient for that risk management process to be carried out
I don’t know if that’s made it any clearer!
Let me try again – when Saltoc’s Chief Financial Officer is preparing the budget for the following period, that budget should take into account the possibility that risks will be identified and that the effective identification, recognition, controlling and management of those risks is likely to cost money.
Thus, the budget should take this possibility into account at the time of preparation of that budget
Is that any better
A budgetary control system is a system (I hesitate to say this) that is controlled at its heart by the financial budget
OK?May 11, 2018 at 2:47 pm
Yes. Thank you so much sir !I got it finally.May 11, 2018 at 3:19 pm
Actually this point on the budgetary control system needing to reflect the risk metrics in the embedded system is rather a general point which can be used for all questions of this type right sir ?May 11, 2018 at 5:21 pm
I don’t think that I can find much wrong with your proposal!
But, there again, when you read through the answers in a revision kit, you’ll probably find a number of similar matters that you could safely put into that category
OK?May 12, 2018 at 4:25 pm
okay sir thank you.May 12, 2018 at 4:37 pm
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