Preview

Assignment 1 Jiadai Gao

Good Essays
Open Document
Open Document
596 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Assignment 1 Jiadai Gao
First Keystone Bank

Jiadai Gao

1. Prepare a list of internal control procedures that banks and other financial institutions have implemented, or should implement, for their ATM operations.

Financial institutions should implemented the following internal control procedures. The first one is Risk Assessment, which means financial institutions’ management should identifies, analyzes, and manages risks that can affect the company. The second one is Control Environment, this procedure require management of the institutions attitude toward, awareness of, and actions concerning the internal control structure to in order to reduce the fraud and error. The third one is Control Activities, which means that institutions’ management should enact specific policies and procedures to achieve the management objectives. What’s more, they should take necessary procedures to target the risks. The forth step is information and communications. Institutions should gather all necessary information to carry out internal controls. Providing, sharing and obtaining information is also very important, which is called communication. The last step is Monitoring. Which is an ongoing process to evaluate controls and determine whether all the operations are as intended. They changed when operating conditions change.

2. What general conditions or factors influence the audit approach or strategy applied to a bank client’s ATM operations by its independent auditors?

The auditor should consider the nature, timing, and extent of further audit procedures to make decision. The nature of an audit procedure include its purpose and its type. So the purpose and the type of an audit procedure will influence the audit approach. The purpose of audit procedure determines whether it is a risk assessment procedure, a test of controls, or a substantive procedure. The types of audit procedures include inspection of documentation, inspection of assets, observation , external confirmation, recalculation,

You May Also Find These Documents Helpful

  • Good Essays

    Apollo Shoes Case Study

    • 656 Words
    • 3 Pages

    The auditor must attain enough evidence to determine the general cash account is comparable to the balance sheet of the end of year for the balance related objective. Areas that may need to be controls should be transaction cycles affecting the recording of cash receipts and disbursements and independent bank reconciliations. It is essential that adequate segregation of duties with the proper authorization for signing off on checks and wire transfer of funds can provide a reduction of control risk for upper management as an audit is being…

    • 656 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Apollo Shoes Audit Letter

    • 572 Words
    • 3 Pages

    The audit will include examining evidence supporting the amounts and disclosures in the financial statements and will involve judgment about the number of transactions to be examined and the areas to be tested. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, tests of physical existence of inventories, and direct confirmation of certain assets and liabilities by correspondence with selected customers, creditors, and financial institutions. In connection with our audit of the financial statements, we will obtain an understanding of internal control sufficient to plan the audit and to determine the nature, timing and extent of audit procedures to be…

    • 572 Words
    • 3 Pages
    Good Essays
  • Best Essays

    Acct 504 Case Study 2

    • 1108 Words
    • 5 Pages

    Internal controls are vital to any company’s business and financial sustainability. Internal controls consist of measures taken by a company safeguarding against fraud, and theft. Internal controls ensure accuracy and reliability in accounting data, and secure policies within the organization. Further, internal controls evaluate all levels of performance. These are addressed with five principles of internal control: Establishment of responsibility, Segregation of duties, Documentation procedures, Physical controls, Independent internal verification, and Human resource controls.…

    • 1108 Words
    • 5 Pages
    Best Essays
  • Good Essays

    Acc 544 Internal Control

    • 800 Words
    • 4 Pages

    The purpose of this brief report is to explain the need for the internal control system within the organization. When controls are in place with an insurance and portfolio approach. An internal control system in any organization is a way to regulate, to reduce lost, to minimize risks, and to accomplish the organizational goals and success (McCarthy, 2004). The majority of organizations depend on the insurance approach and the portfolio risk management approach. The company to manage a business risk is currently using these approaches. It is now being recommended that the company make a transition in order to capture the benefits of an internal control system. Explained below are the two types of currently used approaches, insurance and portfolio, that are used within the organization.…

    • 800 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    2. List the sequential, descriptive steps required in a typical ATM transaction (your choice), such as drawing out cash or transferring funds from one account to another. Be sure to include those steps executed by local ATM system itself as well as those done by information systems housed within the Bank’s centralized data center. Use this table to organize your responses.…

    • 459 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Internal Control - Integrated Framework Executive Summary Senior executives have long sought ways to better control the enterprises they run. Internal controls are put in place to keep the company on course toward profitability goals and achievement of its mission, and to minimize surprises along the way. They enable management to deal with rapidly changing economic and competitive environments, shifting customer demands and priorities, and restructuring for future growth. Internal controls promote efficiency, reduce risk of asset loss, and help ensure the reliability of financial statements and compliance with laws and regulations. Because internal control serves many important purposes, there are increasing calls for better internal control systems and report cards on them. Internal control is looked upon more and more as a solution to a variety of potential problems. Internal Control Internal control means different things to different people. This causes confusion among businesspeople, legislators, regulators and others. Resulting miscommunication and different expectations cause problems within an enterprise. Problems are compounded when the term, if not clearly defined, is written into law, regulation or rule. This report deals with the needs and expectations of management and others. It defines and describes internal control to: 1. Establish a common definition serving the needs of different parties. 2. Provide a standard against which business and other entities--large or small, in the public or private sector, for profit or not--can assess their control systems and determine how to improve them. Internal control is broadly defined as a process, effected by an entity's board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: 1. Effectiveness and efficiency of operations. 2. Reliability of financial reporting. 3. Compliance with applicable laws and…

    • 2817 Words
    • 12 Pages
    Powerful Essays
  • Better Essays

    Companies will often use internal controls in the accounting department in order to avoid abuse and inaccurate data recording as well as protecting companies from fraud. Internal controls will also be used by companies as a means to avoid theft of assets, and unauthorized use. The acquisition and disposal of assets is also a very important part of internal controls. These policies and procedures will help companies in the prevention or detection of any unauthorized acquisition, use or the disposition of its assets, as these types of activities could have a negative impact on the company’s financial statements. But in order for the internal controls to work, management has to ensure the proper protocols are being followed.…

    • 1015 Words
    • 4 Pages
    Better Essays
  • Good Essays

    a. For what purposes should an auditors’ understanding of the internal control components be used in planning an audit?…

    • 1065 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Acct 542 Audit Proposal

    • 1234 Words
    • 5 Pages

    Due to increasing economic and financial growth, many types of audit have been incorporated throughout the development process of internal activities. Audits can be performed manually or they can incorporate technology. According to Hunton and Bagranoff (2004), there are four main types of audit: 1) Attestation; 2) Findings and Recommendations; 3) SAS 70; and 4) SAS 94. Each type brings something unique to the table and can be used in different situations.…

    • 1234 Words
    • 5 Pages
    Powerful Essays
  • Best Essays

    Internal control is defined as a process affected by an organization 's structure, work and authority flows, people and management information systems, designed to help the organization accomplish specific goals or objectives. It is a means by which an organization 's resources are directed, monitored, and measured. It plays an important role in preventing and detecting fraud and protecting the organization 's resources, both physical (e.g., machinery and property) and intangible (e.g., reputation or intellectual property such as trademarks)…

    • 4040 Words
    • 17 Pages
    Best Essays
  • Good Essays

    The Sarbanes-Oxley Act

    • 642 Words
    • 3 Pages

    The maintenance of internal control by management ensures that material information is not being provided for reports. This is essential when being assessed by our side auditors in compliance with Section 404 of Sox. It requires top management or audit committee and outside auditors to review on internal controls and whether or not they are adequate enough. This can be costly for entities to implement because samples of documentation, testing of internal controls, review of manual, and automated systems implemented by entity which enormous maintenance and time. Assessing internal control is design efficiency, outside auditors relate to specific accounts and relevant information in context of material mistake can prevent fraudulent financials being provided to the…

    • 642 Words
    • 3 Pages
    Good Essays
  • Better Essays

    This paper will discuss the internal controls and how they work in business. I will shed some light on the organizations financial and business policies, process and procedures. The purpose of these internal controls is to protect the company’s resources against fraud, misappropriate funds and most important waste. A company can spend quite a bit of money that does not make the company any profit. This paper will examine all aspects if internal controls and their functions.…

    • 1193 Words
    • 5 Pages
    Better Essays
  • Good Essays

    To safeguard the assets, enhance the reliability of the accounting records, increase efficiency within the financial operations, safeguard the assets of the company, and ensure proper compliance with the laws and regulations, the Internal Control report is crucial to the company. A controlled environment, risk assessment, activity control, information and communication, and group monitoring should all be a part of the internal control report (Kimmel 349).…

    • 1134 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    Economic Paper

    • 727 Words
    • 3 Pages

    Controlling is another element for the financial manager’s job which consists of maintaining each area of the organization while implementing that they take action to show that results equal intent. Controlling is put in…

    • 727 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    be perceived as a fixed plan that the organisation utilises to compete within industry but…

    • 3858 Words
    • 16 Pages
    Powerful Essays