Scenario

You and your classmates are working in a company that sold three (3) new types of digital watches (similar to Samsung or Apple Watch) to customers. However, during the manufacturing process, the watch CPU had an error that was not detected by any manufacturing staff. However, in less than a year, after the products were sold to more than 1,000 customers. This error was found by several customers. The repair and warranty department classifies it as a major defective error that requires replacement.

The board of directors and Chief executive officer have assigned the Chief operation officer (CCO) and other relevant parties to work on the program to recall all watches and provide a new replacement to customers. This is in accordance with the Australian Consumer Law where customers have the right to ask the company for compensation for damages and loss^3,4. The COO and other relevant parties are required to set up projects and program governance in order to work on this program and resolve this issue.

It has been 12 months after the CCO and other relevant parties were assigned to rectify the issue. However, you, as a Chief Executive Officer, still receive customers' severe complaints and, therefore, performed an audit with your team. You find that more than 400 customers have been affected (Refer to Customers' list) but there is no action performed by the company to remedy the situation. You are required to take an action immediately to remedy the situation.

Note: Watch Model A, B and C are no longer in the company's main product lines. Therefore, the production capability is only 35 in each type.

Learner's Guideline:

In order for you to complete (i), you are expected to review:

the case scenario

list of customers

Australian consumer law https://consumer.gov.au/sites/consumer/files/2016/05/0553FT_ACL-guides_Guarantees_web.pdf

Australian Competition and Consumer Commission guideline (https://www.accc.gov.au/business/treating-customers-fairly/offering-warranties/warranties-against-defects)

Once you complete the review, you are required to identify non-compliance from the scenario. You are also required to provide the justification of why the company is not compliant. In the justification, you are required to provide specific details where the company breaches the requirements.

In order for you to complete (iii), you are expected to review Audit Report template v1.0. You are to generate an audit report. The report must contain the information below:

Report Summary

Compliance finding

Detailed finding

Corrective Action & Recommendation

In order for you to complete (iv), you are expected to review Compliance letter template v1.0. You are required to create a letter to explain the compliance matter to ACCC. The letter must contain the information below:

Open the letter in an official manner.

Explain the purpose of your letter.

Summarize your understanding of the issue/decision being considered.

Explain your position on this issue.

Describe what any changes will mean to you and others.

In order for you to complete (v), you are required to create an online shared folder via Microsoft OneDrive. Once the online shared folder is created, you are expected to send an email to share it with your assessors who act as one of the key stakeholders in the company.

After completing this task, you are required to submit the following documents to your assessor:

Audit report

A letter to explain the compliance matter to the Australian Competition and Consumer Commission

Secured share links containing audit reports and other relevant documents in Task 3.2.

Template:

Audit Report

Prepared by:

Date:

Report Summary:

This report describes ___________________. The report is submitted in response to finding of non-

compliance against _______________________________________.

Note: the report summary section is used to briefly describe what non-compliance behaviour the company is experiencing. This also shows what standard, compliance, or legal principles the company fails to perform such as Australian Consumer Law.

Compliance findings

Practice	Findings	Section / Clause / Standard / Principle
[Example] Consumer rights & guarantees	[Example] Not Compliant	[Example] Section 55: When a person supplies goods to a consumer, the guarantees imposed in s 55(1) of the Australian Consumer Law requires that the goods supplied are 'reasonably fit for purpose

Detailed finding

Product	Clauses of non-compliance
Guideline: a learner is expected to identify the product that fails to meet the compliance requirements.	Guideline: Describe the reasons in the details.

Corrective Action & Recommendation

Guideline: a learner is expected to identify the corrective action/solution to non-compliance behaviour. Provide recommendations to improve the company governance.

The below example can be used as a guideline to assist all relevant parties (e.g., assessors and learners) in what expectation the audit report should be. Learners are prohibited to copy and use this example as the answer. If any learner directly copies and submits this example as their own work. They are subject to academic misconduct.

Audit report Example

Report Summary:

This report describes the internal-audit investigation regarding travelling cancellations due to Covid-19 restriction. The report is submitted in response to the finding of non-compliance against Australian Competition & Consumer Commission (ACCC) requirements under Consumer Rights & Guarantees and False or Misleading Claims.

Customers are unable to obtain any refund, credit note, and voucher as promised/advertised when the travel is cancelled due to government restrictions.

Compliance findings

Practice	Findings	Section / Clause / Standard / Principle
Consumer rights & guarantees	Not Compliant	If cancellations have occurred due to government restrictions, this can restrict your rights under the consumer guarantees

Detailed finding

Product

Causes of non-compliance

Failure to provide a promised refund, credit note and voucher

The company sold the travelling products to customers between 07/07/2021 and 1/11/2021. During that period, there was no refund from all travelling cancellations, especially due to government border restrictions. As a result, more than 1,000 customers have been impacted. In accordance with the Australian Consumer Law and ACCC's COVID-19 (coronavirus) information for consumers, those customers are expected to receive a refund. The cause of non-compliance is due to staff's lack of understanding regarding the customer protection right in the Covid-19 period.

Corrective Action & Recommendation

The internal audit department forwards the audit report to the booking department manager including the requests to provide refunds for all affected customers. The company should take action as soon as practicable as the scale of non-compliance is considerably large (more than 1,000 customers have been impacted).

The company should have designated personnel to regularly provide the current update of legislative and compliance requirements. This is to ensure that the current non-conformance will not happen again. The booking department manager and other senior managers are also responsible for permitting their staff to have professional development activities. This will ensure that their staff can have up-to-date business practices including industry trends.

COMPLIANCE letter template:

Date: DD/MM/YYYY

Employee's full name

Job title

Company name

Address

To whom it may concern,

We are writing this letter to inform you regarding the recent incident of [ ___topic_______] on [______date______]. The incident has impacted our customers in several way:

1._______________

2. _______________

3.________________

We estimate that the number of customers who have been affected is approximately [_____number_____].

In order to manage the incident, we have decided to establish two solutions: