Overview Professional auditors are charged with the responsibility of analyzing internal controls, conducting risk assessments using analytical procedures, and designing and implementing audit program
Overview Professional auditors are charged with the responsibility of analyzing internal controls, conducting risk assessments using analytical procedures, and designing and implementing audit programs. The purpose of any audit is to report, analyze, and determine whether a specific entity met the stated goals of the procedures being audited. The audit objectives drive the audit program, the analytical procedures, and the substantive fieldwork done by the audit team. Most people think of financial auditing when they discuss, read about, or are involved with audits because it is the most common type; however, there are many other types of audits. These include performance, government, compliance, and internal audits. This class focuses on financial auditing for the majority of the topics, which requires that auditors possess the skills and abilities to successfully implement auditing standards and procedures.
For your final project for this course, you will assume the role of an auditor at a large accounting firm, preparing to perform an audit of financial records for Robbins Network Solutions (RNS). As with any audit, the audit team is not always going to have access to all the information and resources they want prior to starting and working on the audit. That is real-world auditing. The assignment is intended to mimic what auditors face in their career. Do the best with what you have, using auditing standards and critical thinking. Support all your responses based on the material you have.
This summative assessment focuses on the preliminary audit assessment, including the drafting of a summary of findings, preparation of an audit program, and evaluation of the relationship between audit risk, audit evidence, and financial statement assertions.
The project is divided into two milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality final submissions. These milestones will be submitted in Modules Three and Five. The final product will be submitted in Module Seven.
In this assignment, you will demonstrate your mastery of the following course outcomes:
ACC-411-01: Explain the use of assurance services in financial reporting ACC-411-02: Assess the internal controls of an entity for minimizing risk ACC-411-03: Analyze the impact of emerging technologies that could affect auditing
Prompt Assume you are an auditor at an accounting firm. Your team is getting ready to start a financial audit of Robbins Network Solutions (RNS). You will start with the initial review and audit preparation. Refer to the Final Project Scenario document for more information.
Specifically, the following critical elements must be addressed. Most of the critical elements align with a particular course competency (shown in brackets).
I. In a concise memo, evaluate the internal controls of RNS.
A. Describe the major financial business transactions of the company. Include appropriate research to support your answer. [ACC-411-01] B. Evaluate the highest business risks associated with this company. What makes you believe these specifically are the highest risks? Provide appropriate research or data to support your reasoning. [ACC-411-02] C. What would you suggest are the appropriate types of internal controls for this industry? Why? [ACC-411-02] D. Describe ethical issues involved with this company and industry that would have a direct effect on the outcome of a financial audit. How could these issues be addressed? [ACC-411-02] E. Analyze current events for their impact on this company’s risk and internal control in the future. Include documentation of these current events. [ACC-411-02]
II. Write an audit program for internal control of cash in Word or Excel. The following internal control components must be included: [ACC-411-02] A. Control environment B. Risk assessment C. Control activities D. Information and communication E. Monitoring
III. Adding to your memo from Milestone One, document your understanding of the relationship between audit risk, audit evidence, and financial statement assertions as it specifically relates to this company and industry. A. Describe the audit data or evidence your team will review. Why is this proof important? [ACC-411-01] B. What if a significant portion of the data is overseas and beyond the auditors’ jurisdiction or audit universe? Analyze how the audit team will compensate for that risk. What governing rules and regulations must be taken into consideration? [ACC-411-02] C. Describe analytical procedures you will use to determine the sampling program. How will your internal control evaluation affect this step? Be specific. [ACC-411-02] D. List and then describe the types of audit evidence you will request from the company. [ACC-411-01] E. Describe any considerations your team will make in auditing subjective areas, including any governing rules and regulations that were factored into the auditing decisions. [ACC-411-02] F. Describe the factors you took into consideration when planning the nature and extent of the audit documentation. [ACC-411-01] G. Describe how responsibility for IT (computers, software, internet usage, databases) risk coverage for companies in the IT industry is defined. Is it adequate? Describe how that definition addresses or fails to address current and future risks related to social media. [ACC-411-03] H. Describe the internal controls that are put in place to specifically protect computer data and proprietary information. How well do these controls operate within the IT industry? [ACC-411-03] I. Where do current and future vulnerabilities exist for IT, and what must be done to manage these gaps? [ACC-411-03]