|EAST DELTA UNIVERSITY |
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|ASSIGNMENT ON: AUDIT MANAGEMENT |
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|(Topic: Internal Control & Related Aspects) |
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|Submitted To: Dr. Adbur Rahman |
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References: Gray, I and Mason, S (2008), The Audit Process: Principles, Practice and Cases, (4th ed.), London: Thomson Learning Ch 1…
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…
b) Process a transaction that may affect data stored on both client and server computers…
Vineyard Vines is dedicated to bringing new and creative ideas to the market place, both in our product offerings as well as our marketing events. We will continue to develop our unique brand positioning, to maintain and grow our solid brand recognition, and to adhere to high quality design standards. Because everyone wants to have fun every day, Vineyard Vines will continue to offer something for everyone with fun always in mind.…
| Scenario B. Your manager is speaking to a group of employees about a problem in your department. Employees are not complying with the rules regarding clocking in and clocking out each day. The rules in this situation are very important as employees will not receive their correct pay if the clocking procedures are not followed. There are three suggestions being considered to address this problem.…
Many businesses are concerned with information technology risks. Many organizations are concerned with different types of risk and attempt to control risk as they are assessed. In order to control risk, organizations must create control environments that set the tone of employee awareness and promote operational efficiency. One attempt to control risk is through risk assessment. The purpose of risk assessment is to identify organizational risks and evaluate additional or specific control procedures. The purpose of this paper is to analyze and assess the risks within the flow charts of accounts payable, accounts receivable, inventory, and payroll recommended by learning team E for Kudler Fine Foods, design internal controls to mitigate risks to the system, evaluate the application of internal controls to the system and discuss other controls outside the system that Kudler Foods may need.…
All publicly trader companies in the USA are required to maintain and have an up to date system of internal controls. Since the LJB Company is wishing to become a public entity, I am glad to be able to assist in this action. First, the rules and regulations must be reviewed and compared to the company and how it can become public. To make the company attractive to buyers, investors, and other capital sources, it is crucial that the corporate organization and governance are well manifested. Corporate executives and the board of directors within a corporation must ensure that these internal controls are effective. The reliability and efficiency of the internal controls must be directed and supervised by the board of directors and corporate executives (Kimmel 345).…
Louwers, T. J. Ramsay, R. J., Sinason, D, Strawser, J. R. (2007) Auditing and Assurance…
ravis Hirschi has dominated control theory for four decades. His influence today is undiminished and likely will continue for years, if not decades, to come (see, e.g., Britt & Gottfredson, 2003; Gottfredson, 2006; Kempf, 1993; Pratt & Cullen, 2000). Beyond the sheer scholarly talent manifested in his writings, what accounts for Hirschi’s enduring influence on criminological theory? Three interrelated considerations appear to nourish the appeal of his thinking. First, Hirschi’s theories are stated parsimoniously. This means that his theory’s core propositions are easily understood (e.g., the lack of social bonds or of self-control increases criminal involvement). Second, Hirschi is combative and thus controversial. He stakes out a theoretical position and then argues that alternative perspectives are wrong. Hirschi (1983) has long been antagonistic to attempts to integrate theories. Good theories, he believes, have assumptions and an internal consistency that make them incompatible with other approaches. Attempts to mix them together result in fuzzy conceptual frameworks and inhibit the growth of the individual theories. Third, because Hirschi’s theories are parsimoniously stated and make claims that other theories are wrong, they are ideal to test empirically. One (but not the only) reason that theories flourish is that they are able to provide scholars with opportunities to conduct research and gain publications—the very accomplishment that allows for tenure…
The interest of the company going public will be having a successful outcome, if all the required tests are properly administered. The Sarbanes Oxley Act of 2002, requires the CEO and CFO to certify in periodic filings with the SEC the accuracy of the financial statements and the effectiveness of the company’s internal controls over financial reporting. The outside auditor is required to audit certain companies’ internal controls over financial reporting on an annual basis. There are phased-in compliance dates for these requirements for certain smaller company filers. Companies in the IPO process and newly public companies are not required to provide either a management assessment or an auditor attestation report until they file their second annual report with the SEC. While companies in the IPO process are not required to comply with these regulations, in order to prepare for these certifications and audit, it is important to establish, document and monitor compliance of internal controls as early as possible.…
• Arens, A., R. J. Elder, M. S. Beasley and I. B. Splettstoesser-Hogeterp. 2011. Auditing: The Art and Science of Assurance Engagements, Canadian 11th Edition, Pearson Prentice Hall: Toronto. (Referred to as “Audit Text” in the Readings List)…
The portfolio approach is beneficial in measuring the type of risk he/she may want to take on and the likelihood of making a positive return. The focus is mainly on short-term risks. This causes any future risks to be overlooked and all the energy is set toward the risk at hand. Future risks are unnoticed and are growing because no other controls are in place to prevent or stop the risk from becoming damaging (McCarthy, p. 80).…
The transformation of going from a private to public requires some extensive planning and preparation. It is recommended that LJB, being a relatively small sized company, should reevaluate the costs versus the benefits of becoming a publicly traded company. If the decision is made to issue stock, it would be wise to first complete an internal control report as well as answer the following questions:…
Along my life I have met many people who viewed the world or the environment around them completely different than I do. Some believed that luck, chance and the environment had the majority of control over the happenings in their life and others believed that the whole world is in their hands and their futures are what they make of it. These 2 types of people are said to be either internal or external. Externals being the ones who believe they have very little control over their destinies and Internals being the people who believe that their efforts make a difference. After completing the “What Controls Your Life” questionnaire I received a score of 4, which makes me an internal.…
The current company system is out of control and steps need to be taken to regain system control. Internal control is vital to improve an organization’s operation efficiency and effectiveness, financial reporting reliability, and law and regulation compliance (COSO, 1992). To assist in achieving this internal control management can hire an internal accountant to conduct internal audits. An internal audit is a process that offers a systematic approach to evaluate and improve a company’s risk management, controls, and processes. “The services provided by internal auditors include (1) financial audits of financial reports and accounting control systems, (2) compliance audits that ensure conformity with company polices, plans, and procedures and with laws and regulations, (3) operational audits that evaluate the economy and efficiency of business process, (4) audits of effectiveness in achieving program results in comparison to established objective and goals” (IIA Standards 2110 and 2210).…