The executive summary of an internal audit report on SmartWear’s supply chain management has been given to you by the chair of the audit committee. The report identified a number of significant issues in areas such as an appraisal of existing suppliers’ performance and internal reporting provisions.

On behalf of the board of directors, the chair of the audit committee has asked you to provide the buying and merchandising director with an objective appraisal of the supply chain management arrangements at SmartWear to effectively address the various issues raised in the report.

Required:
Draft a memo to the buying and merchandising director, which evaluates the effectiveness of internal control systems at the company, particularly on the procurement side, and recommends control improvements to rectify the identified areas of concern. (12 marks)

Professional skills marks are available for commercial acumen skills when recommending solutions to those issues highlighted in the internal audit report. (4 marks)