Internal Control Audit for Desklib - Study Material Library

Running Head: INTERNAL CONTROL AUDIT
Internal Control Audit
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INTERNAL CONTROL AUDIT
Table of Contents
Question Number 1..........................................................................................................................3
Question No 2..................................................................................................................................5
a)..................................................................................................................................................5
b)..................................................................................................................................................6
c)..................................................................................................................................................6
Question No. 3.................................................................................................................................7
a)..................................................................................................................................................7
b)..................................................................................................................................................9
c)..................................................................................................................................................9
Question No. 4...............................................................................................................................10
Question No. 5...............................................................................................................................15
References......................................................................................................................................17

INTERNAL CONTROL AUDIT
A memo to JekPorkins, the audit senior on the DHL assignment
Question Number 1
The risk of business affect the fraudulent affair will have various level impacts to Pellegrino
Shores. Some of these are as follows.
Loss Related to Finance: On the occurrence of a fraud, this is the first risk that happens to take
place. Thus, in this paper, the loss of qualification is not a fact on account which an appropriate
estimate of potential (Abbott et al., 2016). This is based on the feedback of the resident, which is
honest as well as other records include time and dates of check-in and checkout. Therefore, in the
particular case, the people appear to be a fraction of mix. Hence, it is doubtful to drop previous
on this type of technique.
Common Image: For the benefit of the customers, who all are busy with such unethical deeds,
the fraud may appear. Therefore, this is preparing a mentality regarding the business where it is
convinced that the people of village can be exploited easily (Ali, Ahmi & Ahmad, 2018).
Inside Morale: If the employees believe that the same is a pride of matter for them, they seek to
coordinate with a specific institution. This happens because employees have been coordinated
with a dishonest institution (Al-Matari et al., 2014). Hence, this will negatively affect their
profession growth in the succeeding period.
Overhead of Higher Audit Cost: This is a general grasp related to the occurrence of the
dishonest activities. The cost associated to audit will rise; due to this, the auditor will have to
scrutinize financial statements of each account in association with the fraud. This happens in
respect to the transaction history. People involved in this transaction as well as large due
diligence related to the whole effect that this type of transactions have on an organization. For
the organization on a general basis, high work budgets, high fees, will lead to higher overhead
cost for the Pellegrino shores (Burton et al., 2014).
Following are the accounts that this fraudulent affair will affect as well as its assertions
associated with audit:
Affected Accounts Assertions Related to Audit
Revenue generation from Operations Under the category of general class i.e.

INTERNAL CONTROL AUDIT
‘Transaction Classification’, the assertions of
audit will fall. Furthermore, it will separately
fall in the sub class named ‘Completeness’ as
well as ‘Accuracy’. Here, we appear to search
in case the completeness of generation of
revenue. There is nothing missing in the item
or transactions including sub transaction also.
On the other hand, with the help of accuracy,
we can see the correctness of the recorded
revenue (Alzeban & Sawan, 2015).
Cash, Bank as well as Retained The assertion of audit in cash, bank and
retained will be categorized under the ‘Account
Balances’ general class category as well as in
the sub class of ‘Valuation’ as well as
‘Completeness’. We want to appear to check in
case recorded values in accounts of cash as
well as bank reflect totality. In addition, not
anything has been eliminating (Carcello et al.,
2018). Finally, the revenue will maintain the
company’s retained earnings, therefore all
value that adjust this liability head have been
recorded appropriately as well as correctly.