Question Tag: Business Continuity

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  • 5 Marks

SCS – Nov 2024 – L3 – Q2a – Approaches to Risk Management

Discusses risk management approaches to address identified risks in BOGML.

Approaches to risk management in BOGML – Advice to the board of directors

The following are the risk management approaches that the board of BOGML can adopt to manage the following risks identified in the company:

Risk A

  • Description: Low probability but high impact, e.g., pandemics, natural disasters.
  • Approach: Risk Transfer or Risk Sharing
  • Since this risk has a low likelihood of occurring but can result in severe financial losses, the company should consider transferring this risk or sharing risk. This can be done through the company taking full or partial (i.e. sharing of risk) insurance policies specifically designed for catastrophic events, such as business interruption insurance, pandemic insurance, or property insurance that covers natural disasters. Since the impact will be high when the risk occurs, the company can take insurance to pass on the high impact on the company to the insurance company which has to compensate BOGML in the event that the risk does occur.
  • The risk could also be shared through BOGML forming partnerships and collaborating with other OMCs to undertake investment in their oil stations.
  • The company should also develop a disaster recovery and business continuity plan to manage potential impacts effectively.

Risk B

  • Description: High likelihood but low financial impact, e.g., labor turnover and software downtime due to internet instability.

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  • 15 Marks

AA – Nov 2023 – L2 – Q5 – Emerging Trends in Auditing

Information system audit steps for a business continuity plan and its importance.

The world-wide COVID-19 pandemic disrupted the operations of Divine Hope Limited, like it did to many other business concerns. Sequel to this, the management of Divine Hope Limited has now commissioned the development of a Contingency or Business Continuity Plan to ensure continuity of operations, even if such a pandemic or similar situation should re-occur.

Required:

a. Explain SIX steps to be taken in the information system audit of a Contingency or Business Continuity Plan.
(9 Marks)

b. Explain why the audit of the Contingency or Business Continuity Plan is very necessary.
(6 Marks)

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  • 15 Marks

AA – May 2023 – L2 – SC – Q7 – Risk Assessment and Internal Control

Addressing the impact of record loss on business continuity and methods to manage data recovery.

Indorise Limited has been in business for about 20 years. The company has divisional offices in three locations. The accounting records are kept mainly at the head office, with backup in an adjacent building to the office. The office is located close to a petrol station.

An unfortunate incident occurred in a certain year when the petrol station caught fire, engulfing most offices in the area. The company lost most of the properties in the building, including important accounting records. Consequently, the company relocated its office to another street. However, many of the accounting records were not backed up, leading to disputes from the tax office, customers, and suppliers over balances, with some parties even initiating litigation claims.

Required:

a. Explain the importance of maintaining adequate backup for accounting records. (5 Marks)

b. Identify measures that Indorise Limited could implement to prevent future data loss. (5 Marks)

c. Discuss the role of internal controls in ensuring business continuity in cases of disaster. (5 Marks)

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  • 5 Marks

SCS – Nov 2024 – L3 – Q2a – Approaches to Risk Management

Discusses risk management approaches to address identified risks in BOGML.

Approaches to risk management in BOGML – Advice to the board of directors

The following are the risk management approaches that the board of BOGML can adopt to manage the following risks identified in the company:

Risk A

  • Description: Low probability but high impact, e.g., pandemics, natural disasters.
  • Approach: Risk Transfer or Risk Sharing
  • Since this risk has a low likelihood of occurring but can result in severe financial losses, the company should consider transferring this risk or sharing risk. This can be done through the company taking full or partial (i.e. sharing of risk) insurance policies specifically designed for catastrophic events, such as business interruption insurance, pandemic insurance, or property insurance that covers natural disasters. Since the impact will be high when the risk occurs, the company can take insurance to pass on the high impact on the company to the insurance company which has to compensate BOGML in the event that the risk does occur.
  • The risk could also be shared through BOGML forming partnerships and collaborating with other OMCs to undertake investment in their oil stations.
  • The company should also develop a disaster recovery and business continuity plan to manage potential impacts effectively.

Risk B

  • Description: High likelihood but low financial impact, e.g., labor turnover and software downtime due to internet instability.

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  • 15 Marks

AA – Nov 2023 – L2 – Q5 – Emerging Trends in Auditing

Information system audit steps for a business continuity plan and its importance.

The world-wide COVID-19 pandemic disrupted the operations of Divine Hope Limited, like it did to many other business concerns. Sequel to this, the management of Divine Hope Limited has now commissioned the development of a Contingency or Business Continuity Plan to ensure continuity of operations, even if such a pandemic or similar situation should re-occur.

Required:

a. Explain SIX steps to be taken in the information system audit of a Contingency or Business Continuity Plan.
(9 Marks)

b. Explain why the audit of the Contingency or Business Continuity Plan is very necessary.
(6 Marks)

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  • 15 Marks

AA – May 2023 – L2 – SC – Q7 – Risk Assessment and Internal Control

Addressing the impact of record loss on business continuity and methods to manage data recovery.

Indorise Limited has been in business for about 20 years. The company has divisional offices in three locations. The accounting records are kept mainly at the head office, with backup in an adjacent building to the office. The office is located close to a petrol station.

An unfortunate incident occurred in a certain year when the petrol station caught fire, engulfing most offices in the area. The company lost most of the properties in the building, including important accounting records. Consequently, the company relocated its office to another street. However, many of the accounting records were not backed up, leading to disputes from the tax office, customers, and suppliers over balances, with some parties even initiating litigation claims.

Required:

a. Explain the importance of maintaining adequate backup for accounting records. (5 Marks)

b. Identify measures that Indorise Limited could implement to prevent future data loss. (5 Marks)

c. Discuss the role of internal controls in ensuring business continuity in cases of disaster. (5 Marks)

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