The Retailer Spring Edition 2022
SPR I NG 202 2
Having an effective internal control envi ronment will lead to fewer surprises, better decisions and enhanced trust and confi dence for your investors and stakeholders” ‘‘
Practical advice Let us not forget that this is a journey. The quickest way to start is with a gap analysis. This provides an understanding of where you are now and a view of where you want to go. Control environment maturitymay range from ‘limited’ with key controls identified and actions more reactive, all theway to ‘fully embedded’ with an optimised suite of controls that are continuously monitored, giving oversight and visibility as well as confidence that controls are working effectively. Once you know where you are and where you want to go, you can feed that into your internal controls programme. For a control framework to work effectively it needs to be continually monitored and refreshed, as well as scalable to accommodate changes to business processes. A good example of this is that the full impact of Brexit, which is still to be seen, will drive more changes. Retailers still need to keep an ear to the ground. If you want to be ready and better prepared to respond to future shocks, are looking for confidence in the health of your business, want to achieve your strategy and goals - not to mention increase profitability –a strong control framework is essential!
Everything from customer service, logistics and supply chains have been reorganised, online sales, inventory andwarehousing systems have been overhauled, employees have moved to home-working, and cybersecurity has shifted back up the list of retailer’s priorities. Disruption like that inevitably means a change in working practices and procedures. And to do that requires robust internal controls. There is no doubt those ‘makeshift’ controls worked, in fact, they saw the sector through a major crisis. However, the accelerated pace of change inevitably means quick fixes were applied and their design may not meet future needs. Inflation, the cost-of-living crisis and geopolitical instability means storm clouds are gathering. Simple, strong controls make good business sense. Irrespective of compliance requirements, with specific reference to the government white paper ‘Restoring Trust in Audit and Corporate Governance’ which proposes a new internal controls regime. In the last two years, we have seen many unanticipated changes which have made businesses more agile and creative but also more risk-conscious. Therefore, to continue growing sustainably it is important to get the foundational internal controls right. Controls that are designed specifically to support the delivery of a company’s strategic objectives are more achievable.
Matt Dalton firstname.lastname@example.org
The pandemic has shown us that a well-controlled business is more resil ient and able to respond quicker to
arlene wewege email@example.com
SOURCE 1Office for National Statistics: https://www.ons.gov.uk/ businessindustryandtrade/retailindustry/timeseries/j4mc/drsi
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