Management and directors

Question 1

From a business perspective, where do you balance what should or should not be automated? How do you align or manage the positive and negative aspects you discussed.

Positive and Negative Aspects of Automation of a Company

Positive Aspects

Significant reduction in production or manufacturing time.

A lot of improvement in accuracy and repeatability.

Through automation, previous events like human error are reduced.

The wage bill of the company reduces as there is fewer human employees needed.

Safety and security are a bit guaranteed through automation.

Negative Aspects

Loss of jobs to machines and hence unemployment.

It is always costly to set up the whole automation process.

It takes a lot of time and skills to get used to the new systems.

The automation process lacks versatility that human labor could provide.

There will be unpredictable costs like in the event of the machines breaking down.

Question 2

In identifying management fraud exposures, it is useful to think of the fraud exposure triangle, which includes

(1) management and directors,

(2) organizations and industry, and

(3) relationships with others