1 H has started to offer a new service in response to pressure from environmental campaigners. Up to five years ago, many of the components sold by H contained toxic materials. Recent legislation in Europe requires components to be recycled in specific ways to minimize any environmental damage. H has told customers that when they purchase new components they can give the old components to H and then the company will recycle them in accordance with the new legislation. This service has provided some publicity for H and has featured in its recent social and environmental report. However, a review of H’s recycling procedures by its internal audit department identified that many components, including some that contain toxic materials, are simply thrown away by H’s staff rather than being recycled. a) Discuss about the risk involved in the company H. b) What risk assessment procedure should be followed by the auditor?
1 H has started to offer a new service in response to pressure from environmental campaigners. Up to five years ago, many of the components sold by H contained toxic materials. Recent legislation in Europe requires components to be recycled in specific ways to minimize any environmental damage. H has told customers that when they purchase new components they can give the old components to H and then the company will recycle them in accordance with the new legislation. This service has provided some publicity for H and has featured in its recent social and environmental report. However, a review of H’s recycling procedures by its internal audit department identified that many components, including some that contain toxic materials, are simply thrown away by H’s staff rather than being recycled.
a) Discuss about the risk involved in the company H.
b) What risk assessment procedure should be followed by the auditor?
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