Question

Scenario

You have been promoted as a Chief Financial Officer of a manufacturing company operating continuous basis with a stock of around one billion Dollars. In Last year the company suffered financial loss due to theft of inventory and worker compensation. On top of that, in 2014 a corruption charges came in to light, when Mr Mi Lim previous CFO of the company awarded tender for building factory construction to his relative known for bad reputation.

Required:

Briefly describe some risk minimisation technique you will suggest. Answer in 200-250 words.

Answer 1

Answer)

Here,I would say that the company must take the insurance policy for both worker compensation and inventory protection to avoid the loss which may be caused.

As a CFO, I must first analyse that whether having the stock of one billion dollars is worth or not.It is worth if that inventory can be sold within short period of time i.e within a month or so.If not then I must take appropriate actions to avoid holding such high value of inventory as it may even increase the holding charges also for the company.

Then I must check whether the employees for whom the compensation paid are wearing reasonable safety equipment like helmey,Protective Jacket etc and If not strict orders must be issued for employees for improving awareness among them and make them wear them.

Reasonble background check on the companies, firms or individuals who submitted tenders and moral checks on the employees must be conducted to avoid any fradulent related party transactions.