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MANAGEMENT REVIEWS

What are Management Reviews?

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A Management Review is a process in which an organization’s senior management evaluates its current operations, performance, and strategies to ensure that the company is aligned with its goals, objectives, and regulatory requirements. This review is a critical tool for assessing organizational effectiveness, identifying potential risks, and ensuring continuous improvement. It is an essential part of effective corporate governance, strategic planning, and internal control systems.

 

Management reviews can vary in scope depending on the organization’s needs and focus areas, but they generally involve evaluating various business aspects, including financial performance, operational efficiency, compliance, and strategic alignment. The findings from these reviews help management make informed decisions about the direction of the company, necessary improvements, and resource allocation.

Benefits of Management Reviews:
  1. Strategic Alignment:

    • Management reviews help ensure that the company’s operations, projects, and resources are in alignment with its strategic objectives.

    • Regular reviews provide the opportunity to refine or adjust strategies as needed, making sure the organization remains focused on its long-term vision.

  2. Improved Decision-Making:

    • With up-to-date information and an objective analysis of performance, management reviews enable informed and effective decision-making. Senior leadership can make adjustments based on real-time data and insights.

  3. Identification of Risks:

    • Management reviews serve as a tool for early identification of potential risks and challenges, including financial issues, operational inefficiencies, or compliance failures.

    • Addressing these issues early can help avoid bigger problems down the road.

  4. Continuous Improvement:

    • The process of reviewing past performance allows organizations to identify areas of strength and areas for improvement, driving continuous improvement in all facets of the organization, from operations to customer service.

  5. Accountability:

    • By conducting regular reviews and following up on actions taken, management creates a culture of accountability within the organization. Managers and teams are held responsible for meeting their goals and making progress on action plans.

  6. Enhanced Communication:

    • Management reviews facilitate communication between senior management and other departments within the organization. This helps ensure that everyone is aligned and aware of the company’s priorities, challenges, and goals.

  7. Stakeholder Confidence:

    • Transparent and effective management reviews also build confidence among stakeholders (e.g., shareholders, employees, customers) that the company is being run effectively and is open to making necessary adjustments.

  8. Better Risk Management:

    • By regularly assessing risks, a company can establish or refine its risk management framework, ensuring that it is prepared for both internal and external threats.

  9. Resource Optimization:

    • Regularly reviewing resource utilization and operational efficiency helps management ensure that resources—whether financial, human, or technological—are being used effectively to meet business goals.

Some Specific Client Needs:

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"How can we ensure that our company leadership is executing strategy effectively and achieving business objectives?"

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"How can we typically aim at improving management decision-making and overall company governance?"

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"How can we reasonably assess leadership performance and strategic alignment with business goals?"

Why Choose Us?

We are committed to driving tangible results for your business. With specialized &/or expert knowledge, skills, competence & experience in Auditing, our proven track record and dedication to excellence make us the ideal partner for your business needs & requirements.

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Following are useful actual STAR Scenarios allowing us to provide clear, concise examples of our expertise, skills, competence & knowledge in action. It demonstrates our problem-solving abilities, highlights our strategic approach, and emphasizes the tangible outcomes of our work. By focusing on real results, we can effectively show you how we turn challenges into opportunities and drive success for our clients. Whether you're looking for increased profits, improved efficiency, risk management, internal controls & business processes, or innovative solutions, the STAR method helps you understand exactly how we deliver value.  You will see more of these as you continue to browse our services and get to know The CFBS Advantage.

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In these STAR Scenarios we demonstrated the following skills, among others: 

Risk Management & Assessment Skills
Internal Controls Evaluation
Audit Planning & Execution
Sampling Techniques
Report Writing & Communication Skills
Teamwork Skills
Leadership Skills
Independence & Objectivity
Analytical & Critical Thinking
Attention to Details
Tax & regulatory knowledge
Tax Planning & Strategy
Accounting Principles & Standards
Client Management
Project Management

Delegation Skills
Organization Skills
Coordination Skills​

STAR Scenario #1: Periodic Management Review of a Manufacturing Company

SITUATION:

Periodic Management Review of the Company will be held in a few weeks.

TASK:

Prepare & conduct the company’s management review.

ACTION:

1) Managed and delegated assigned tasks to audit staffs;
2) Managed deliverables of each division for the management review.

RESULTS:

1) Organized and productive conduct of the company’s periodic management reviews from all divisions of the company.
2) Performances were discussed vis-a-vis key result areas (KRA) and key performance indexes (KPI) noting performance gaps, causes or reasons behind, risks and realized risks, risk mitigation, and change implementation action plans.

STAR Scenario #2:  Toll Mfg. Business Process, Operations & Compliance Audit

SITUATION:

Need to conduct a Toll Manufacturing Audit for a multinational company.

TASK:

Audit Toll Manufacturers of the multinational company.

ACTION:

1) Reviewed the manufacturing production process including batch production documents;
2) Reviewed Toll Manufacturing Contracts & determined compliance of each toll manufacturer;
3) Documented the overview of the whole toll manufacturing process and conducted risk-control assessments;
4) Conducted substantive control tests on high risk areas within the company and within toll manufacturers.
5) Successfully managed and coordinated audit activities within the company and with toll manufacturers peacefully and harmoniously.

RESULTS:

1) Uncovered a high risk exposure on the brand equity of a Billionaire Brand due to lapses of quality controls in a toll manufacturer which could damage the brands reputation & value.  The risks were immediately address by implementing the designed quality control checks strictly;
2) Uncovered product production quantity demands that were not significantly met by a toll manufacturer.  This led to discussions with top management regarding strategy of ALL-IN production in the company and current capacity constraints in current manufacturing network;  
3) Uncovered non-value adding activities such as double handling of inventories;
4) Uncovered that there were NO comprehensive periodic performance evaluation formally being conducted/ communicated with toll manufacturers.
5) Identified a toll manufacturer that are doing even better than the company in terms of production yield;
6) Identified delayed payments with toll manufacturer producing a number 1 brand in the market that could impact operations and productions.  This resulted in subsequent prompt payments;
7) Provided reasonable business assurance to stakeholders with other matters regarding toll manufacturers.

STAR SCENARIOS

Following are the links to our various STAR Scenarios for your review in connection herein:

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Internal Auditing

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Operations Audits

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Financial Audits

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Business Process Audits

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Compliance Audits

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Assets & Inventory Audits

Magnifying Glass

Fraud Audits

Key Features of Management Reviews:
  1. Objective:

    • The primary goal of a management review is to evaluate how well an organization’s operations, systems, and strategies are functioning to meet its strategic objectives.

    • It helps to ensure that the company’s activities are aligned with its long-term vision and can adapt to internal and external challenges.

    • The review process is designed to identify areas for improvement, mitigate risks, and enhance performance by setting up action plans for corrective measures.

  2. Scope:

    • The scope of a management review can cover various areas within the organization, including:

      • Financial performance: Reviewing profitability, revenue trends, and cost management.

      • Operational performance: Analyzing key operational processes, workflow, and productivity.

      • Compliance and risk management: Ensuring that the company adheres to relevant regulations, industry standards, and internal policies.

      • Customer satisfaction and market positioning: Evaluating customer feedback, market share, and competitive advantage.

      • Human resources and organizational culture: Assessing employee engagement, turnover rates, and organizational development.

      • Strategic goals: Reviewing progress on achieving the company’s long-term vision, strategic initiatives, and KPIs (Key Performance Indicators).

  3. Frequency:

    • Management reviews are typically conducted at regular intervals, such as quarterly, semi-annually, or annually, though they can also be carried out on an ad-hoc basis if there is a significant change or issue that needs urgent attention.

    • In some cases, more frequent executive meetings may be held for ongoing assessment and to address emerging challenges.

  4. Participants:

    • The review process generally involves senior management, such as the CEO, CFO, COO, and other key executives, as well as department heads or functional managers.

    • In some cases, external advisors or auditors may be involved to provide an objective perspective or specialized insight.

  5. Reporting and Action Plans:

    • Following the review, a report or presentation is often generated that outlines:

      • The findings from the review (both positive and areas requiring attention).

      • Recommendations for improvement or changes in strategy, operations, or structure.

      • Action plans with clear responsibilities, timelines, and milestones for addressing any issues or improving performance.

    • Follow-up mechanisms are established to track the implementation of the recommendations and measure progress over time.

Steps Involved in a Management Review:
  1. Preparation and Planning:

    • Before conducting the review, senior management defines the objectives of the review and the scope of the evaluation.

    • Data collection is a critical step, and relevant performance metrics, financial reports, customer feedback, employee surveys, and other sources of information are gathered and analyzed.

  2. Analysis of Key Metrics and Data:

    • Senior management and relevant departments analyze performance data against the company’s strategic goals, budgets, and KPIs.

    • Key metrics might include:

      • Financial performance (e.g., profitability, cost efficiency).

      • Operational metrics (e.g., production efficiency, supply chain effectiveness).

      • Customer satisfaction (e.g., NPS scores, customer retention rates).

      • Risk management (e.g., audit results, compliance violations).

    • Data analysis often highlights trends, areas of concern, or success stories that need attention or recognition.

  3. Review of Current Strategies:

    • Senior management evaluates the effectiveness of the organization’s current strategies in achieving short-term and long-term goals.

    • This might include assessing:

      • Business growth strategies.

      • Marketing and sales initiatives.

      • Innovation or product development efforts.

      • Cost management or resource optimization strategies.

  4. Identifying Strengths, Weaknesses, Opportunities, and Threats (SWOT Analysis):

    • Often, a SWOT analysis is conducted as part of the review process to assess the organization’s internal strengths and weaknesses and external opportunities and threats.

    • This helps to identify strategic areas for improvement and refine future planning.

  5. Risk and Compliance Evaluation:

    • A review of the company’s risk management framework and compliance with regulatory or industry standards is essential. This includes:

      • Identifying emerging risks or changes in the business environment.

      • Evaluating compliance with laws and regulations.

      • Assessing the effectiveness of internal controls and auditing procedures.

    • Risk management strategies, including mitigation plans, may also be revised or strengthened during the review.

  6. Decision-Making and Action Planning:

    • Based on the findings of the review, decisions are made regarding necessary changes to the current operations or strategies.

    • This may involve:

      • Setting new objectives for specific departments or teams.

      • Allocating resources (e.g., budget adjustments, hiring new staff).

      • Revising goals or business models in response to changes in market conditions, internal performance, or customer needs.

      • Corrective actions for areas that are not meeting expectations.

  7. Follow-Up and Monitoring:

    • After the management review, it’s crucial to establish a monitoring system to track the implementation of the decisions and action plans.

    • Regular updates or follow-up meetings are scheduled to ensure that progress is being made and that any necessary adjustments are implemented quickly.

Challenges of Management Reviews:
  1. Time and Resource Intensive:

    • Management reviews can be time-consuming, especially if they involve extensive data collection and analysis. For smaller organizations, dedicating enough resources and time to conduct a thorough review can be challenging.

  2. Bias:

    • If not managed carefully, management reviews can be subject to bias from senior leadership, especially if they are overly focused on specific outcomes or risks while neglecting others.

  3. Resistance to Change:

    • Implementing the recommendations from management reviews can face resistance, especially if employees or departments are not fully aligned with the changes or feel that their current practices are being criticized.

  4. Lack of Follow-Up:

    • One of the biggest risks associated with management reviews is the lack of follow-up on action plans. If issues identified in the review are not addressed promptly, it can lead to stagnation and unaddressed problems.

Summary:

A Management Review is a structured, formal process where senior management evaluates an organization’s operations, performance, risks, and strategic alignment. The goal is to identify areas for improvement, ensure organizational effectiveness, and make informed decisions to help the company achieve its long-term objectives. The review process involves analyzing key metrics, assessing compliance, and evaluating risks, followed by creating action plans for necessary improvements. Regular management reviews are essential for continuous improvement, strategic alignment, risk management, and ensuring the efficient use of resources. However, to be effective, management reviews need to be well-planned, data-driven, and followed up with actionable decisions.

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Why CFBS?

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CFBS’ Internal Audits provides an independent, objective assurance and consulting activity designed to continuously add value and improve an organization’s operations. We help organization’s accomplish its objectives by bringing a systematic, disciplined approach to continuously evaluate and improve the effectiveness of risk management, control, and governance processes. Our more than fifteen (15) years of experience, professional service practice & recognized excellence, education & training gained from various industries can give you much leverage & advantages.

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