Explain the terms span of control and control loss. Are these concepts Essay

Explain the terms span of control and control loss. Are these concepts useful in understanding the design of organizations - Essay Example There are frequent opportunities, so they tend to make the best selection. This has caused the people to raise their expectations manifolds. Today, companies have to be very skillful and knowledgeable in order to make the same benefits that they did in the past with much lesser skill and technical knowledge. In the contemporary market scenario, a businessman can not afford to be uneducated on such technical aspects of business as â€Å"span of control† and â€Å"control loss†. This paper explains the concept of the two terms; span of control and control loss and analyzes their usability in the design of organizations. The concept of span of control was first introduced by by Sir Ian Hamilton in 1922 in the UK (â€Å"Reference for Business†, 2011). Hamilton developed the concept after having studied the British military leaders’ capacity to control a maximum of 3 to 6 people. Since then, this number has been recognized as the standard average number of peop le to be managed by one individual. According to Col. Urwick, an optimal span of control should not exceed 6 (Hattrup, 1993). Hamilton believed in the fact that managers come with limited time and energy to devote to their work. Hence, there has to be a maximum limit on the number of people one individual can effectively manage on the average. Span of control is also called as the span of management. It is essentially a term pertaining to human resources management (HRM). It tells the exact number of workers that a supervisor may adequately manage. Fig: Span of control example (tutor2u, n.d.). The term is of huge significance particularly to the small business runners. Span of control is largely taught in business and management institutions all over the world in the contemporary age. The concept is frequently employed in such large institutions as military, schools and many agencies of the government. However, not many business entrepreneurs are yet familiar with the concept and us ually have no technical means to judge what maximum number of workers should be given in the charge of one supervisor. As a result of lack of knowledge, many businessmen tend to increase the span of control. This, in turn, limits a company’s capacity to grow. What to talk of inexperienced lot, even the most experienced and competent managers have a hard time solving issues of too many people. This saps their ability to concentrate on long term plans, and they are not able to competitively position their business in the market scenario. A business is susceptible to be affected by a lot of risks in its lifetime. Losses may occur due to a variety of reasons. Whenever a business suffers from a loss, it is not just the owners that are affected. Indeed, the whole business is affected. The loss results not only into direct cost, but also the indirect expenses associated with it often exceed the direct costs. Let’s assume a case where the a construction site owner did not prov ide the workers with sufficient safety equipment on the site. One of the plastermen fell from the scaffolding because there was no bracing to support him. He fell on the ground and received several scars and wounds all over his body. He bled heavily. The whole crew left the work and attended the injured. He was taken to the nearby hospital for treatment after the first aid was given on the site. Many workers took it as an opportunity to indulge in lengthy discussions and gossip with one another, discussing how the accident happened, to what extent the

The effective steps for risk assessment to identify the risks Essay

The effective steps for risk assessment to identify the risks regarding the misstated data in the financial records - Essay Example The analytical procedures can be described as ‘evaluating the financial records by analyzing the credible relationship between the financial records and non-financial records’. It can be also included that ‘such analysis is mandatory to identify the difference or inconsistency of relevant data or the difference between provided data and the estimated values’ (ISA/HKSA 520(4)). The basic principle to apply the analytical procedures is the expected existence of the credible relationship may occur and the analytical procedures may carry on in such circumstances in the non-appearance of the opposite factors. Defining the purposes Auditors use analytical procedures in the entire audit course to achieve the three main purposes of audit: 1) Preliminary analytical review These are the introductory analytical reviews, which assist the auditors to get an idea about the business and industry. They can start with reviewing the previous financial records, performance of industry and the competitors. This will lead them to decide the nature of audit, the time period required and the level of analytical procedures. Basically, preliminary analytical reviews help to design the strategies and plans to conduct the audit. 2) Substantive analytical procedures Auditors can use the analytical procedures substantively. If the auditors feel that their analytical procedure can bring more accurate results rather than using different tests, so they usually reduce the level of tests to identify the misstated facts of the financial records. These procedures will be known as substantive analytical procedures. 3) Final analytical reviews Financial records are analyzed thoroughly by the auditors through analytical procedures, which lead the independent individuals towards th e outcomes whether records are accurate or in compliance with auditors’ understanding. So analytical procedures are applied finally to analyze the facts but these procedures are not executed to get hold of the extra substantive analysis. In such case, if auditors find any inconsistency in the records, they must repeat the risk assessment procedure and if they feel the need of extra analytical procedures, they can go for it. Substantive analytical procedures usage Acquiring the evidence of audit that must be reliable and appropriate is one of the basic points of analytical procedures. While applying the procedures of substantive analytics, auditors need to acquire the guarantee with the assistance of other auditing tools and controls. These tools and controls help the auditors to evaluate the results of different sections after applying analytical procedures. Such analytical procedures have ability to cover a wider range of transactions that is why procedures of substantive an alytics are normally used to analyze the financial records. As it is briefly told that the auditors apply substantive analytical procedures on the expected existence of the credible relationship between financial data and they may carry on this analytical procedure in case of non-appearance of contrary factors. The existence of relationship between the data provides the base of audit evidence that leads the auditors to