Assignment Type: Individual Project Deliverable Length: 4–5 pages Points Possible: 125 Due Date: 2/10/2013 11:59:59 PM CT Today, many companies face budgetary challenges on a continual basis. Two...

Answer to Q (i)
Budget is the financial forecast of any concern for a period of time. Objective of budget
depends upon the type of organisation. Long term objective of any organisation is the
important part of every budget. Budget is a tool which assists every organisation in
achieving their targets effectively.
Mere making of budget is not sufficient to achieve business target. Proper implementation
of budget is pre-required for success of any budget. For making proper implementation of
udget, 2 basic elements is mandatory in every organisation-
(i) Proper Internal Control
(ii) Timely review of Budgets
In the given case study, it is very clear that budgets being prepared by “Money Cares
Investment Corporation” is not properly implemented and reviewed. Due to this
following things may go wrong in the organisation-
1. Objective of organisation cannot be achieved within the time frame decided by the
organisation.
2. Financial expenses will increase and it will result in decrease in profit of concern
which results in decline in value of business.
3. Misuse of working cash of company due to no policy control over the personal use of
cash by Investment specialist.
4. Credit cards given to investment specialist without any policy which will lead to
personal profiteering.
5. Overspending of expenses leads to financial imbalance and unproductive use of cash.
Answer to Q (ii)
In the given case internal control and monitoring polices of company is very weak and
due to which following risk arises-
1. Financial Risk- Financial risk is associated with the ability of business to handle
money. When money is not handled properly it will either lead to financial crisis or
loss of interest due to unutilised heavy cash. In the given case overspending of money
in some expenses and no policy control over the use of cash is leading the business
money to be used in unproductive areas while increasing the financial risk.
2. Operational Risk- Operational risk arises due to failure in the internal control system
of organisation. Weakness in the internal control leads to increase in operational risk
which may results in any unforeseen external events. In the given case internal control
is very weak so operational risk is high.
3. Goodwill/ Reputational Risk- This risk may arise due to non- maintaining of equal
standard in the society by any organisation. The main reason associated for this risk is
weak Internal Control and non monitoring in the organisation. This risk may lead to
many external risks for business.
Answer to Q (iii)
By analysing the given case...