Hamad is a textbook publisher, providing educational tools for basic school, high school, and post-secondary education markets.

The company is publicly traded, is based in Manama, Bahrain, and has customers in Bahrain, Other GCC countries, UK, South Africa, Japan, Australia, and New Zealand.

Hamad employs a professional editorial team and contracts with noted academics and other professional to write the textbooks.

All printing and binding activities are outsourced, which represents one of the most significant costs of the company.

The company leases space for its distribution centers, which are located in all of the countries in which it does business.

Annual revenues for Hamad total $550 million, cash expenditures approximate $480 million, non-cash expenditure (for example, depreciation and amortization) approximate $25 million, and long-term capital expenditure approximate $40 million.

On average, the $480 million in annual cash expenditures are disbursed as follows:

	% of Disbursements	% of Dollars
Electronic or wire transfers	10%	60%
Computer generated checks (cheques)	88%	38%
Manual checks	2%	2%

While disbursements may be made in different currencies, all are processed out of centralized disbursements function located in Manama, Bahrain.

1. Determine one disbursement function objective that will be relevant to this engagement

2. Create a list of potential risk scenarios for each objective

3. Based on the identified risk scenarios, define the key cash disbursement risks and assess the risks.

a. You will need to make assumptions regarding impact and likelihood for this assessment. Document the assumptions made.

b. Also, make assumptions about and document process-level managements risk tolerance levels.

4. Document a potential process flow in a detailed process map. Make sure that this flow identifies key risks and control activities and has at least one potential design inadequacy.

5. Develop potential key performance indicators for the process you documented in step 4.

6. Identify which control activities are considered key control activities. As part of this analysis, document your assumptions regarding the effectiveness of entity-wide controls, and how such controls affect the cash disbursement process-level control activities, if at all.

7. Link the key control activities to the identified risks.

8. Prepare a Risk and Control Matrix to cover the appropriate information from step 3 through step 7. Conclude on the overall design adequacy of the cash disbursement process.

9. Create a test plan for gathering evidence regarding the operating effectiveness of all key control activities.

10. Develop potential test results of testing for all tests conducted. Make sure to identify at least two observations related to the operating effectiveness of key control activities.

11. Add the results of steps 9 and 10 above to the Risk and Control Matrix. Document your conclusions on the effectiveness of control activity operations

Develop observations based on the engagement results that outline the condition, criteria, cause, and effect for each observation.