Five Threats to Auditor Independence The following are the five things that can potentially compromise the independence of auditors: 1. Retrieved from https://careers.fanniemae.com/main/? This lesson explores the important factors to consider when building a strategic plan in retail. Report a Violation 11. What is a Situation Anlaysis | A Step-By-Step Guide with Tools - Creately As FNMA (2018b) reports, if there were to be major turnover in upper management, this could create a situation where turnover in key management positions could cause problems as the new management personnel needs to integrate into the existing management structure. A hospital employee did not observe minimum necessary requirements when she left a telephone message with the daughter of a patient that detailed both her medical . You may also check out needs analysis examples. It should focus on factors impacting your business, both internally and externally. What analysis is conducted for strategic planning in HR? Federal Housing Finance Agency. Big box retailers like Wal-Mart or Target plan for the season shifts that come with Christmas, Valentine's Day, Easter, and other similar calendar-driven events. As FNMA (2018b) reported in their annual report, their business processes are highly dependent on the talents and efforts of [their] senior executives and other employees (p. 35). The mission of FNMA is to provide affordability, liquidity, and stability to the U.S. housing market (FNMA, 2011). As they note, when economic times tend to become uncertain, investors who have tended to finance mortgages leave the marketplace. This concurs with the organizational mission to provide affordability, liquidity, and stability to the U.S. housing market (FNMA, 2011). A situation analysis canimpact not only the current condition of your business but also the future operations of your company. List down all the competitors of the business. From the time that FNMA went into conservatorship until now, it has emerged from a point where it had to be bailed out to now, where FNMA has generated a consistent profit. As Siska (2015) explains, MCS is generally defined as the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of the organizations objectives (p. 142). Despite financial limitations on compensation, FNMA has attracted a highly-qualified board which has been able to turn the organization around. This puts FNMA at a competitive disadvantage, as high compensation, bonuses, and equity-based compensation are all commonly offered by organizations in the financial industry to attract key talent, putting FNMA at a competitive disadvantage. STAR Method - A Model Approach to Nail Your Next Interview Have you already decided to develop a situation analysis? You need to align these elements for you to ensure that you will highly benefit from using the results of your situation analysis. Although similar, they are not identical. Even though FNMA was hit hard by the recession, causing them to need to be taken into conservatorship by the Federal Government, they have persisted in their vision to preserve homeownership, continuing to provide funding to the mortgage market after the worldwide recession, and working to help over 700,000 homeowners struggling to pay home loans during 2009 and 2010 to retain their homes, which has stabilized the neighborhoods, home prices, and housing markets in their area. These are traditional projections. Specify all your distribution channels as well as your collaborators. A common theme observed in modern organizations today is the poor alignment of business strategy and HRM strategy. Clearly, one of the major strengths of FNMA is its relationship with the Federal government. Through the 1940s and 1950s, FNMA funded banks providing home loans to members of the military returning from the war, as well as the housing boom that benefitted the middle class. The Way of Working program has shown clear benefits, increasing the level of customer satisfaction even in a limited time period. Rotter et al. For this project, you are being asked to conduct a situation audit of the company that you work for or of another company that your instructor has approved. With the help of a situation analysis, companies can be keener in terms of developing counteractions, contingency plans, and strategies for improvement. stakeholders, including organizational leaders and new members. The various participants indicated here are the shareholders, management, and board of directors. Systematic examination of the attitudes, demands, and expectations of these groups and their considerations in appropriate forms help a corporation in the strategy formulation. In order to sustain a competitive advantage, FNMA must make the best use of the resources that they have at their access. You consent to our cookies if you continue to use our website. 3. The theory of path dependency explains why human resources at FNMA are such a unique asset. Image Guidelines 4. #2 - Qualified Opinion: In this type of report, the auditor will state limitations faced while auditing. A situation analysis entails investigations on market factors, rivalry in the market, and other environmental factors that affect the operations of a Our experts can answer your tough homework and study questions. The following areas have been noted in this report: FNMA has done well in getting their financial house into order, such that they have returned not only all that was borrowed but a profit to the Treasury. As has been discussed at length in this situation audit, central to the MVGO of FNMA is to provide liquidity to the markets. B., & McNamara, G. (2012). This meant that the organization was no longer funded by the federal budget, and financing was funded through the issuance of stocks and bonds. 12+ Situation Analysis Examples Situation Analysis Template Details File Format Google Docs MS Word Pages Size: A4, US Download Marketing Situation Analysis Details File Format Google Docs MS Word Pages Size: A4, US Download Current Situation Analysis Template Details File Format Google Doc MS Word Pages Size: A4, US You may also like literary analysis examples. The report summarizes the current situation of the National PTA, focusing on key internal factors. You may also like company analysis examples. The unique nature of FNMA permitted the organization to continue to provide needed services during this critical time. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. What does a company require when adopting a strategic approach? STRATEGIC AUDIT REPORT example 1.docx - GROUP IOI Common audit problems: Publishing audit reports. If a bank, thrift, or credit union had to rely upon commercial lenders or investors, who could leave the market at any point and time, this could lead to chaotic conditions for them, where they could be caught lending out capital that they could not recoup through the sale of their mortgages. Account Disable 12. As Dess et al. 3. Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features. The cookies is used to store the user consent for the cookies in the category "Necessary". The purpose of the review is to give the leadership insights that might be helpful in future strategic planning or decision- making. AU 312.09. The mission of the National PTA is to make every childs potential a reality by engaging and. Retrieved from http://www.fanniemae.com/resources/file/aboutus/pdf/codeofconduct.pdf, Fannie Mae. This has happened due to prudent organizational leadership being applied through the top. #3 - Adverse Opinion: If the statements are not correctly stated. What is a situation audit in strategic planning? As a result, when loan workout activities were a larger portion of their business, FNMA had to respond by having an increased staffing level to meet the needs. Our code of conduct, 61. Fannie Mae. Common Audit Problems and How to Deal with Them - The Auditor Hospital Implements New Minimum Necessary Polices for Telephone Messages. Due to the unique situation of FNMA, the organizational structure has experienced some changes that are out of the norm for a business of this type. The overall strategy of FNMA within Porter's definitions is that of a business-level strategy. You may also see what is analysis? Both of these requirements essentially say the same thing. The way that the organization is perceived by the market is very important as it can impact the successes of the companys action plans, or the lack thereof. It is exactly those advantages that allowed FNMA to soar from carrying only 35% of mortgages before the housing meltdown to over 70% after when other lenders left the market in droves. What is the rational model of strategic planning? As a corporate document, it is very transparent in terms of listing down all the negative or weak areas of the company as well as the strategies and tactics that do not provide that much benefits or advantages to the organization. audit final report - Situation Audit - Advance Towing Erica - Studocu All other trademarks and copyrights are the property of their respective owners. are vitally necessary in the situation audit. What is Growth Strategy? This will be followed by an analysis of strengths and weaknesses, along with the organizations demonstrated ability to learn and change. Regarding intangible resources, these include human resources, innovation and creativity through change, and reputation. This has been accomplished through stabilizing homeowners who were previously in foreclosure through the HARP program being moved into streamlined refinance programs. We will send [DOCUMENT_TITLE] to your email. Find unique ways to reward employees that raise satisfaction in the absence of the ability to provide traditional financial compensation packages. - Definition & Examples, Psychological Research & Experimental Design, All Teacher Certification Test Prep Courses, Retail Strategy & Attractive Market Segments, Stages of the Strategic Retail Planning Process, Financial & Societal Objectives in Retail Planning, Business Plans: How to Develop a Business Mission Statement, SWOT Analysis & Situation Audit in Retail, How to Identify Strategic Alternatives in Marketing, Retail Marketing Mix vs. You should start by looking at your mission and strategic objectives to create a framework. A situation analysis is a detailed examination of a company's market presence based on internal and external factors. A situation analysis also explores a firm's capabilities and how the current business climate impacts the company. In this phase, a company seeks to identify the principal opportunities that appear to exist in the environment of the future as well as the threats that may adversely affect the company. Executive Summary In the motor vehicle towing industry, competition is usually intense, as smaller companies compete with larger companies for a share of the market. The company also utilizes the Net Promoter score to determine customer satisfaction. These value systems not only influence objectives but also influence all sorts of decisions made in the planning process. In a financial audit, sampling can be an efficient way to tackle a large number of accounting transactions. Form 10-K. Federal National Mortgage Association. One of these retailers, Barnes & Noble, is still doing business. Give an example. These highly-specific goals and objectives are consistent with the mission and values of the organization and serve to facilitate its ability to provide financing for the residential housing market as well as to strengthen the home lending markets. situation audit final report.docx - Situation Audit Report: These cookies ensure basic functionalities and security features of the website, anonymously. Therefore, the audit aims to safeguard the. 2. This can be seen in the employee levels from 2014-2018 as illustrated in Figure 2. Because of the situation with their conservatorship, FNMA is somewhat restricted in the makeup and nature of their board of directors. Writing an effective nonconformity | CQI | IRCA Tweet Download Send via email As Fannie Mae (2011) outlines, one of the key advantages that they have is that they do not have to rely on traditional investors. What is the purpose of contingency planning. Upper management works with the individual business units to help them to identify short- and long-term goals as well as the metrics needed to measure them. Making a situation analysis will allow your business to create a relevant business and marketing plan. Situation Audit: Meaning and Process | Company | Auditing A key way to measure an organizations ability to learn and change is to measure the level of those developmental changes against clearly-defined metrics. When the global economic recession hit, FNMA was placed into federal conservatorship but continued to provide financing to the residential home market. All indications suggest that FNMA will continue to succeed if they follow their current trajectory. For instance, if market share of product A has been declining over the past five years, an appraisal of current performance as being satisfactory is hardly justified should such trend continue. What Are Examples of Auditing? | Small Business - Chron.com What are some examples of contingency planning? The value systems of top management particularly are basic and fundamental premises in any comprehensive corporate planning system. This situational analysis is of the Federal National Mortgage Association, commonly referred to as Fannie Mae or FNMA. Identify your target audience as well as their demands, income level, purchasing capabilities, purchasing frequencies, wants, and needs. The management approach utilized by FNMA includes high transparency, collaboration, and customer-focused actions designed to make the organization more effective in meeting the needs of its stakeholders. What is corporate level strategic planning? (2018b, October 8). 10 Audit objectives are most commonly phrased as, "To determine whether" or, for example, "To assess the adequacy of internal controls." 11 An objective may be "To determine whether the application under review is in compliance with PCI DSS." Ramanujam, V., Venkatraman, N., & Camillus, J. C. (1986). In comparison toSWOT analysis of college examples, situation analysis documents that are used by businesses provide a wider usage scope and range of process implementation. Disclaimer 8. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that youve provided to them or that theyve collected from your use of their services. (2015). Situation Analysis of a Marketing Plan: Example and Definition Compensation for the CEO is limited to $600,000 while the firm is in conservatorship. Methods of sampling. Once the ground came out from under those mortgages, FNMA was saddled with an inventory of many mortgages that were in default and in danger of foreclosure. As Pozen and Pfannenstiel (2018) explain before the housing meltdown hit in 2008, the federal government backed only 35% of home mortgages, but since that time, the number has soared to over 70% of home mortgages. (2018b). What are strategic issues in strategic planning? These include performance bonuses, golden parachutes, and equity-based compensation packages. The constituents viz. President and CFO David Benson (2017) estimates that it will require somewhere between three and four years for most of the company to complete the program. What is a department manager's role in strategic planning? Loan workout activity consists of the work that FNMA has had to do in order to help homeowners stabilize their situation and prevent foreclosure. For this reason, David Benson (2017), president and CFO of FNMA explains that the company approaches their need to have a high customer focus by utilizing lean management principles. Avoid unverifiable claims and make sure to bridge any gaps of information by referencing where you obtained key facts and figures. When the market collapse happened in 2008, FNMA was affected because they purchased mortgages that were sold to them under false pretenses. Audit sampling | ACCA Qualification | Students | ACCA Global Because of the dependability of FNMA in good times and bad, this has made FNMA the go-to repurchase of mortgages for many agencies, including banks, credit unions, thrifts, and other lending agencies. A Sample Audit Policy Scenario. is to give the leadership insights that might be helpful in future strategic planning or decision-, The report also includes four recommendations to help leadership improve the. In order to run their businesses with predictability, such financial organizations must have a dependable source of financing to repurchase the mortgages that they lend funds for. What is the chase strategy in aggregate planning? (2012) outlined, service, marketing and sales, and operations are key components of any organizations primary business activities. In FNMAs (Fannie Mae, 2018a) Code of Conduct, all values and behaviors are centered around this mission. It has been downloaded 5422 times and is available for you to use, free of charge. When performing a SWOT analysis, an organization is really looking in two distinct directions. What are the major decisions for operational planning? Deloitte. 2. The activity of helping homeowners to avoid foreclosure is a particularly resource-intensive process that requires more man-hours to perform. There are different information that you have to gather about your market so that you can easily execute activities that can get their attention whenever needed. Brand Audit Example: Nestle. The cookie is used to store the user consent for the cookies in the category "Other. 4. Another resource that FNMA has is that they have a large number of employees that are centered primarily in Washington, D.C. and Dallas, Texas. As FNMA (2018a) outlines, through the conservatorship arrangement, their sole fiduciary responsibility is to the FHFA, their conservator. Traditional Marketing Mix, UExcel Business Ethics: Study Guide & Test Prep, DSST Computing and Information Technology Prep, High School Marketing for Teachers: Help & Review, Economics 101: Principles of Microeconomics, Introduction to Financial Accounting: Certificate Program, Financial Accounting: Homework Help Resource, Principles of Macroeconomics: Certificate Program, College Macroeconomics: Homework Help Resource, Praxis Family and Consumer Sciences (5122) Prep, Situational Analysis in Marketing: Examples, Definition & Format, Monetary Measurement Concept: Advantages & Limitations, What is a Hospital Lien? S = Situation (a concise statement of the problem) B = Background (pertinent and brief information related to the situation) Create an account to start this course today. Fannie Mae. New York, NY: McGraw Hill Education. In this article we will discuss about:- 1. Within this business-level strategy, FNMA has what Porter referred to as a focus strategy or niche strategy. The top management at FNMA is tasked with the responsibility to establish the policies and design the directives that permit the organization to meet the objectives established by their conservator, the FHFA. You may also check out sales analysis examples. In such a situation, the auditor ordinarily . Because of limitations in compensation, this could become a problem if critical staff members were to leave the organization for better-paying jobs elsewhere, such as at competing financial firms. Privacy Policy 9. Still, despite these limitations, and despite considerable limitations in tools such as compensation packages and rewards, the Board has managed to return FNMA to profitability, demonstrating that they are good stewards of corporate governance. With the collapse of the housing market, FNMA was taken into conservatorship where it has remained until today. Discuss the general goals of an organization's compensation system, including how a compensation strategy works to support the organization's business strategy. A big chunk of the current condition of the business is based on the relationship of the company with a variety of entities. This is a critical phase of the situation audit. All rights reserved. Because of the tremendous experience that FNMA has, they also take the lead in creating the systems that lenders can use to access mortgage equity. This can help establish a longer and stronger relationship between the business and its suppliers, customers, and partners. A situation audit is a type of SWOT analysis in which specific elements of the business are analyzed. The human resources issue becomes especially apparent at the top management levels. (2012) outline, the strengths and weaknesses components of the SWOT analysis refer mainly to the internal conditions of a firm. The current situation with FNMA is that the conservatorship agreement that they are under prohibits them from offering specialized types of compensation that are common in the financial industry. You may also see organizational analysis examples. PDF Audit Risk and Materiality in Conducting an Audit According to the FHFA (2019), specific mandates that FNMA was to carry out include maintaining foreclosure prevention activities in order to encourage a liquid and resilient national housing finance market.