Definitions and application of procedures for reviewing and evaluating

Definitions and application of procedures for

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Definitions and application of procedures for reviewing and evaluating marketing activities 3 Review systems and practices for pricing decisions: Analysis of clientele Analysis of demand Analysis of competition Pricing policy 3 Review marketing systems and practices: Setting of sales objectives Evaluation of performance of sales force Sales and distribution contracts Budget control of sales costs Note: 1 mark for each type of review and 1 mark for each valid example to a maximum of 3 marks 2 Reporting and monitoring Prepare a draft report and discuss it with management before issuing the final report. Monitor management’s actions on the recommendations of the report. 4 The final 4 marks are allocated for clarity, logic, impact, and persuasiveness. Continued... SMU1D03 ©CGA-Canada, 2003 Page 4 of 9
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Sample Solution Note: Candidates will provide different solutions. Here is a sample solution that would be acceptable. MEMORANDUM Date: March 1, 2003 To: Director of Internal Audit From: [You, CGA] Re: Audit of marketing activities Further to the request of the board of directors, you asked me to prepare an audit program for the marketing department. I will first specify the objective of the audit; then I will briefly describe the main criteria that will be used for this engagement. I will conclude my report by describing the audit procedures that will be used to collect evidence. Objective of the engagement The general objective of the audit is to determine whether the different activities of the marketing department are carried out economically, efficiently, and effectively. In light of the large increase in marketing costs, the strategy for increasing the organization’s market share will be given special attention. Audit criteria The audit criteria are intended to determine whether the activities of the marketing department are being carried out in an acceptable fashion. First, it will be necessary to make sure that the roles and responsibilities of the department are clearly defined and well documented. It will also be necessary to ensure that pricing procedures take account of all major factors, such as competition and the organization’s cost structure. Criteria must be identified for measuring the extent to which the different strategic objectives are met. In light of the large relative size of marketing costs, management systems and practices for marketing costs must provide a reasonable assurance that the organization is receiving good services for dollars spent. The results of marketing efforts must be evaluated and appropriate corrective action must be taken to optimize the amounts invested in advertising and promotion. Audit procedures Different procedures will be used to collect information relating to the criteria. A review of organizational charts and job descriptions in the marketing department will serve to determine whether the roles and responsibilities of the marketing department have been clearly defined. A review of systems and practices for making pricing decisions will confirm whether the pricing criteria are valid. Similarly, it will be
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