FNS60217 Auditing and Reporting Assignment: Week 2-7 Activities
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Homework Assignment
AI Summary
This assignment solution addresses key aspects of auditing and reporting within the FNSACC602 unit. It begins by exploring general and application Electronic Data Processing (EDP) controls, emphasizing segregation of duties, system development, and data validation. The assignment then delves into risk assessment, identifying inherent risks in retail and construction businesses and proposing mitigation strategies. Furthermore, the importance of clearly defined policies and procedures for internal control is highlighted. The solution also examines the significance of monitoring data input, resource use, and implementation plans to ensure the achievement of accounting standards and organizational objectives. The assessment covers topics such as system specifications, hardware and software needs, security requirements, and the monitoring of costs and external influences. The assignment includes detailed answers to questions about EDP controls, risk management, and internal controls, along with the importance of monitoring data and resources.

T-1.8.1
Details of Assessment
Term and Year T4, 2018 Time allowed Week 2 to Week 7
Assessment No 2 Assessment Weighting 60%
Assessment Type Assignment
Due Date Week 08 Room
Details of Subject
Qualification FNS60217 Advanced Diploma of Accounting
Subject Name Auditing and Reporting
Details of Unit(s) of competency
Unit Code and
Title
FNSACC602 Audit and report on financial systems and records
FNSACC606 Conduct internal audit
Details of Student
Student Name
Student ID College
Student Declaration: I declare that the work
submitted is my own, and has not been copied or
plagiarised from any person or source. Signature: ___________________________
Date: _______/________/_______________
Details of Assessor
Assessorās Name
Assessment Outcome
Results Competent Not Competent Marks / 60
FEEDBACK TO STUDENT
Progressive feedback to students, identifying gaps in competency and comments on positive improvements:
_______________________________________________________________________
_______________________________________________________________________
______________
Student Declaration: I declare that I have been
assessed in this unit, and I have been advised of my
result. I also am aware of my appeal rights and
reassessment procedure.
Signature: ____________________________
Date: ____/_____/ 2018___
Assessor Declaration: I declare that I have
conducted a fair, valid, reliable and flexible
assessment with this student, and I have provided
appropriate feedback
Student did not attend the feedback session.
Feedback provided on assessment.
Signature: ____________________________
Date: ____/ / 2018
Purpose of the Assessment
Auditing and Reporting, Assessment 2, v1.0 Page 1
Details of Assessment
Term and Year T4, 2018 Time allowed Week 2 to Week 7
Assessment No 2 Assessment Weighting 60%
Assessment Type Assignment
Due Date Week 08 Room
Details of Subject
Qualification FNS60217 Advanced Diploma of Accounting
Subject Name Auditing and Reporting
Details of Unit(s) of competency
Unit Code and
Title
FNSACC602 Audit and report on financial systems and records
FNSACC606 Conduct internal audit
Details of Student
Student Name
Student ID College
Student Declaration: I declare that the work
submitted is my own, and has not been copied or
plagiarised from any person or source. Signature: ___________________________
Date: _______/________/_______________
Details of Assessor
Assessorās Name
Assessment Outcome
Results Competent Not Competent Marks / 60
FEEDBACK TO STUDENT
Progressive feedback to students, identifying gaps in competency and comments on positive improvements:
_______________________________________________________________________
_______________________________________________________________________
______________
Student Declaration: I declare that I have been
assessed in this unit, and I have been advised of my
result. I also am aware of my appeal rights and
reassessment procedure.
Signature: ____________________________
Date: ____/_____/ 2018___
Assessor Declaration: I declare that I have
conducted a fair, valid, reliable and flexible
assessment with this student, and I have provided
appropriate feedback
Student did not attend the feedback session.
Feedback provided on assessment.
Signature: ____________________________
Date: ____/ / 2018
Purpose of the Assessment
Auditing and Reporting, Assessment 2, v1.0 Page 1
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T-1.8.1
The purpose of this assessment is to assess the student
in the following learning outcomes:
Assessment task 2:
Assignment
Satisfactory
(S)
Not yet
Satisfactory
(NS)
Element 1: [Evaluate information systems]
1.1 Evaluate system specifications against user
requirements and feedback to identify redundancies
and constraints, and capacities of information
technology
Activity 01
Q: 01
1.2 Identify hardware and software needs from
assessment of available products and services
Activity 01
Q: 01
1.3 Evaluate possible uses and handling of accounting
data in consultation with users to determine security
requirements
Activity 05
1.4 Analyse organisational procedures and policy to
evaluate scope of strategies for risk management,
internal control of expenditure and compliance with
statutory requirements
Activity 01
Q: 01
1.5 Monitor and record enquiries regarding use of
systems to ensure ongoing evaluation
Activity 05
Element 2: [Develop implementation plans]
2.1 Review internal control systems to determine any
implementation issues that impact on organisational
processes
Activity 05
2.2 Analyse strengths and weaknesses of
organisational processes, including present and future
capacities, and incorporate in implementation plan
Activity 03
2.3 Design implementation to cover outcomes,
resource use, costs, and achievement and
maintenance of professional accounting standards
Activity 03
2.4 Establish schedules that are realistic and feasible
in context of organisationās short-term and long-term
objectives
Activity 04
Element 3: [Review resource use]
3.1 Monitor sources of data input to identify influences
and variations in returns and costs
Activity 03
3.2 Monitor estimates of stock levels and review to
ensure appropriate stocking and ordering of materials
and inventory items
Activity 03
Activity 05
3.3 Compare records of resource use with unit cost
estimates to evaluate projected costs
Activity 03
3.4 Analyse factors influencing resource use in future
to assess impact on operations and objectives
Activity 05
Element 4: [Monitor plans]
4.1 Adjust implementation to take account of emerging
external influences and establishment of alternative
targets
Activity 4
Activity 05
4.2 Monitor and control costs of plans by evaluating
net benefits to operations from allocation of resources
Activity 4
Activity 05
Auditing and Reporting, Assessment 2, v1.0 Page 2
The purpose of this assessment is to assess the student
in the following learning outcomes:
Assessment task 2:
Assignment
Satisfactory
(S)
Not yet
Satisfactory
(NS)
Element 1: [Evaluate information systems]
1.1 Evaluate system specifications against user
requirements and feedback to identify redundancies
and constraints, and capacities of information
technology
Activity 01
Q: 01
1.2 Identify hardware and software needs from
assessment of available products and services
Activity 01
Q: 01
1.3 Evaluate possible uses and handling of accounting
data in consultation with users to determine security
requirements
Activity 05
1.4 Analyse organisational procedures and policy to
evaluate scope of strategies for risk management,
internal control of expenditure and compliance with
statutory requirements
Activity 01
Q: 01
1.5 Monitor and record enquiries regarding use of
systems to ensure ongoing evaluation
Activity 05
Element 2: [Develop implementation plans]
2.1 Review internal control systems to determine any
implementation issues that impact on organisational
processes
Activity 05
2.2 Analyse strengths and weaknesses of
organisational processes, including present and future
capacities, and incorporate in implementation plan
Activity 03
2.3 Design implementation to cover outcomes,
resource use, costs, and achievement and
maintenance of professional accounting standards
Activity 03
2.4 Establish schedules that are realistic and feasible
in context of organisationās short-term and long-term
objectives
Activity 04
Element 3: [Review resource use]
3.1 Monitor sources of data input to identify influences
and variations in returns and costs
Activity 03
3.2 Monitor estimates of stock levels and review to
ensure appropriate stocking and ordering of materials
and inventory items
Activity 03
Activity 05
3.3 Compare records of resource use with unit cost
estimates to evaluate projected costs
Activity 03
3.4 Analyse factors influencing resource use in future
to assess impact on operations and objectives
Activity 05
Element 4: [Monitor plans]
4.1 Adjust implementation to take account of emerging
external influences and establishment of alternative
targets
Activity 4
Activity 05
4.2 Monitor and control costs of plans by evaluating
net benefits to operations from allocation of resources
Activity 4
Activity 05
Auditing and Reporting, Assessment 2, v1.0 Page 2

T-1.8.1
4.3 Adjust internal control systems to ensure
maintenance and achievement of accounting
standards
Activity 05
Assessment/evidence gathering conditions
Each assessment component is recorded as either Satisfactory (S) or Not Satisfactory (NS). A student can only achieve
competence when all assessment components listed under Purpose of the assessment section are Satisfactory. Your
trainer will give you feedback after the completion of each assessment. A student who is assessed as NS (Not
Satisfactory) is eligible for re-assessment.
Resources required for this Assessment
ļ· All documents must be created in Microsoft Word
ļ· Upon completion, submit the assessment printed copy to your trainer along with assessment coversheet.
ļ· Refer to the notes on eLearning to answer the tasks
ļ· Any additional material will be provided by Trainer
Instructions for Students
Please read the following instructions carefully
ļ· This assessment has to be completed In class At home
ļ· This assessment is to be completed according to the instructions given by your assessor.
ļ· Students are allowed to take this assessment home.
ļ· Feedback on each task will be provided to enable you to determine how your work could be improved. You will be
provided with feedback on your work within 2 weeks of the assessment due date. All other feedbacks will be
provided by the end of the term.
ļ· Should you not answer the questions correctly, you will be given feedback on the results and your gaps in
knowledge. You will be given another opportunity to demonstrate your knowledge and skills to be deemed
competent for this unit of competency.
ļ· If you are not sure about any aspects of this assessment, please ask for clarification from your assessor.
ļ· Please refer to the College re-assessment and re-sit policy for more information.
Activity - 01 Due: Week 2 10 Marks
(This activity to be completed both in class and at home)
Assessment description
Task 1: As an auditor, how would you ensure the different aspects of General EDP control and
EDP application in an organisation? (6 Marks)
Provide examples in each scenario. (4 Marks)
Your assessor will be looking for:
You judgement and analytical skills as an auditor to below aspects:
General EDP controls and EDP Application controls
ā System Specification against user requirement
Auditing and Reporting, Assessment 2, v1.0 Page 3
4.3 Adjust internal control systems to ensure
maintenance and achievement of accounting
standards
Activity 05
Assessment/evidence gathering conditions
Each assessment component is recorded as either Satisfactory (S) or Not Satisfactory (NS). A student can only achieve
competence when all assessment components listed under Purpose of the assessment section are Satisfactory. Your
trainer will give you feedback after the completion of each assessment. A student who is assessed as NS (Not
Satisfactory) is eligible for re-assessment.
Resources required for this Assessment
ļ· All documents must be created in Microsoft Word
ļ· Upon completion, submit the assessment printed copy to your trainer along with assessment coversheet.
ļ· Refer to the notes on eLearning to answer the tasks
ļ· Any additional material will be provided by Trainer
Instructions for Students
Please read the following instructions carefully
ļ· This assessment has to be completed In class At home
ļ· This assessment is to be completed according to the instructions given by your assessor.
ļ· Students are allowed to take this assessment home.
ļ· Feedback on each task will be provided to enable you to determine how your work could be improved. You will be
provided with feedback on your work within 2 weeks of the assessment due date. All other feedbacks will be
provided by the end of the term.
ļ· Should you not answer the questions correctly, you will be given feedback on the results and your gaps in
knowledge. You will be given another opportunity to demonstrate your knowledge and skills to be deemed
competent for this unit of competency.
ļ· If you are not sure about any aspects of this assessment, please ask for clarification from your assessor.
ļ· Please refer to the College re-assessment and re-sit policy for more information.
Activity - 01 Due: Week 2 10 Marks
(This activity to be completed both in class and at home)
Assessment description
Task 1: As an auditor, how would you ensure the different aspects of General EDP control and
EDP application in an organisation? (6 Marks)
Provide examples in each scenario. (4 Marks)
Your assessor will be looking for:
You judgement and analytical skills as an auditor to below aspects:
General EDP controls and EDP Application controls
ā System Specification against user requirement
Auditing and Reporting, Assessment 2, v1.0 Page 3
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T-1.8.1
ā Effective an efficient use of information technology
ā Hardware and Software requirement as per organisational needs
ā Control over the use of system and segregating of duty
ā Record keeping and communication.
Answer:
Usually, internal controls can be detailed in a computer based accounting system which
are of two basic types namely, General controls also known as organization controls and
Application or procedural controls.
To begin with, general controls covers generally the environment in which computer
processing is conducted. The countable objectives of general control include, to ensure
adequate segregation of duties, that is, division of functional responsibilities. Another objective of
the general control is to protect information contained in computer records and many other
objectives. Further, general controls can as well be subdivided into, Systems development and
control and Administrative controls
The system development and control actually covers numerous areas like,
Documentation, Standards, File conversion and Authorization. Changes to operational system or
programs should be subjected to the same controls as initial development. It must be authorized
and controlled.
Therefore, taking system development scenario, as an auditor various consultations
frequently flows because many would want to ensure that sufficient control is present in the new
system to maintain reliable accounting records.
The administrative controls include; segregation or division of duties, Control over computer
operators and file control.
For the side of application controls, it includes, Input, processing, output and master
file controls that is totally computer program based. These controls are to ensure the
completeness and accurate processing of data. Besides, validation checks or data vet or edit
control can be built or programmed into input conversion to validate input for
reasonableness. Examples are types or data vet or field or character check, limit or range
check, existence check, reasonableness check, sequence check, completeness check.
Therefore, there should separation of duties between EDP functions and from those of
users. The effective operations of the systems not only rely on the software but also on the
hardware maintenance. This is greatly because of the fact that there shall be no communication
neither input information nor output information shall occur whenever any computer component
is not properly maintained.
Auditing and Reporting, Assessment 2, v1.0 Page 4
ā Effective an efficient use of information technology
ā Hardware and Software requirement as per organisational needs
ā Control over the use of system and segregating of duty
ā Record keeping and communication.
Answer:
Usually, internal controls can be detailed in a computer based accounting system which
are of two basic types namely, General controls also known as organization controls and
Application or procedural controls.
To begin with, general controls covers generally the environment in which computer
processing is conducted. The countable objectives of general control include, to ensure
adequate segregation of duties, that is, division of functional responsibilities. Another objective of
the general control is to protect information contained in computer records and many other
objectives. Further, general controls can as well be subdivided into, Systems development and
control and Administrative controls
The system development and control actually covers numerous areas like,
Documentation, Standards, File conversion and Authorization. Changes to operational system or
programs should be subjected to the same controls as initial development. It must be authorized
and controlled.
Therefore, taking system development scenario, as an auditor various consultations
frequently flows because many would want to ensure that sufficient control is present in the new
system to maintain reliable accounting records.
The administrative controls include; segregation or division of duties, Control over computer
operators and file control.
For the side of application controls, it includes, Input, processing, output and master
file controls that is totally computer program based. These controls are to ensure the
completeness and accurate processing of data. Besides, validation checks or data vet or edit
control can be built or programmed into input conversion to validate input for
reasonableness. Examples are types or data vet or field or character check, limit or range
check, existence check, reasonableness check, sequence check, completeness check.
Therefore, there should separation of duties between EDP functions and from those of
users. The effective operations of the systems not only rely on the software but also on the
hardware maintenance. This is greatly because of the fact that there shall be no communication
neither input information nor output information shall occur whenever any computer component
is not properly maintained.
Auditing and Reporting, Assessment 2, v1.0 Page 4
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T-1.8.1
Auditing and Reporting, Assessment 2, v1.0 Page 5
Auditing and Reporting, Assessment 2, v1.0 Page 5

T-1.8.1
Activity ā 02 Due: Week 3 10 Marks
(This activity to be completed both in class and at home)
Assessment description
Task 1: List at least 4 inherent risks of the following business. What controls you would
suggest mitigating those risks. (6 Marks)
i. A retail business such as a service station/food centre
ii. A construction business
Task 2: Why do you think clearly defined policies and procedures are important for Internal
Control perspective? Please strengthen your answer with examples. (4 Marks)
Your assessor will be looking for:
You judgement and analytical skills as an auditor to below aspects:
ā Inherent risks identification based on nature of business.
ā Understanding of policies and procedures
ā Compliance of Policy and procedures with Statutory requirements
Task 1
(i)
-Competition- the possible high level of competition may be one of the major challenges a retail
business as they may not easily overcome bigger businesses. The appropriate on time remady
against this type of risk is to try having a bit stable backgrounds, quality inventory and good
finance capital base for easily sustainability coping with business environ competitions.
-Theft- retail businesses as well is exposed to theft risks as most retail premises usually lucks
appropriate security. Therefore, theft cases can highly costs retailers incurring losses. To
attempt safety, there must be strong building used for storage and personal surveys most
times.
-Customer injury- due to the unfriendly business environments like Icy sidewalks and rainy days
could lead to huge legal bills for your store if a customer slips and falls.
-Damage to inventory-the stock are at a possible risk of damages. For example, windstorm,
tornado, or power outage could leave your store with a costly surplus of spoiled or damaged
inventory
(ii)
-Equipment damage- A contractor's tools are their livelihood. Without your equipment, the job
simply can't get done. Some tools can be quickly and easily replaced, but for those that can't,
Auditing and Reporting, Assessment 2, v1.0 Page 6
Activity ā 02 Due: Week 3 10 Marks
(This activity to be completed both in class and at home)
Assessment description
Task 1: List at least 4 inherent risks of the following business. What controls you would
suggest mitigating those risks. (6 Marks)
i. A retail business such as a service station/food centre
ii. A construction business
Task 2: Why do you think clearly defined policies and procedures are important for Internal
Control perspective? Please strengthen your answer with examples. (4 Marks)
Your assessor will be looking for:
You judgement and analytical skills as an auditor to below aspects:
ā Inherent risks identification based on nature of business.
ā Understanding of policies and procedures
ā Compliance of Policy and procedures with Statutory requirements
Task 1
(i)
-Competition- the possible high level of competition may be one of the major challenges a retail
business as they may not easily overcome bigger businesses. The appropriate on time remady
against this type of risk is to try having a bit stable backgrounds, quality inventory and good
finance capital base for easily sustainability coping with business environ competitions.
-Theft- retail businesses as well is exposed to theft risks as most retail premises usually lucks
appropriate security. Therefore, theft cases can highly costs retailers incurring losses. To
attempt safety, there must be strong building used for storage and personal surveys most
times.
-Customer injury- due to the unfriendly business environments like Icy sidewalks and rainy days
could lead to huge legal bills for your store if a customer slips and falls.
-Damage to inventory-the stock are at a possible risk of damages. For example, windstorm,
tornado, or power outage could leave your store with a costly surplus of spoiled or damaged
inventory
(ii)
-Equipment damage- A contractor's tools are their livelihood. Without your equipment, the job
simply can't get done. Some tools can be quickly and easily replaced, but for those that can't,
Auditing and Reporting, Assessment 2, v1.0 Page 6
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T-1.8.1
a Property Insurance policy can be a lifesaver.
- Injuries to third parties and workers- No matter how hard you strive to create a safe work area,
a construction site is a dangerous place full of potential hazards. This can be especially true for
people unfamiliar with safety rules, such as clients who are visiting the worksite. Even veterans
of the construction industry can be hurt on the job, including your employees.
- Faulty work- A construction business may be liable for finished projects that are structurally
unsound, not up to code, or faulty in some other way. If your work doesn't comply with local,
state, and federal building regulations, your client could lose money and look to you for
reimbursement.
- Missed deadlines- There's a reason school teachers enforce due dates for homework. People
in the business world expect projects to be done on time. Building materials can be delivered
too late, tools can break, and plans might have to be redrawn entirely if something unexpected
is discovered.
Task2
Internal control is all of the policies and procedures management uses to achieve various
goals. These goals can therefore confirm the importance of clearly defined policies. Examples
of these goals include;
-Ensure the reliability and integrity of financial information - Internal controls ensure that
management has accurate, timely and complete information, including accounting
records, in order to plan, monitor and report business operations.
-Ensure compliance - Internal controls help to ensure the University is in compliance
with the many federal, state and local laws and regulations affecting the operations of
our business.
-Promote efficient and effective operations - Internal controls provide an environment in
which managers and staff can maximize the efficiency and effectiveness of their
operations.
-Accomplishment of goals and objectives - Internal controls system provide a
mechanism for management to monitor the achievement of operational goals and
objectives.
Auditing and Reporting, Assessment 2, v1.0 Page 7
a Property Insurance policy can be a lifesaver.
- Injuries to third parties and workers- No matter how hard you strive to create a safe work area,
a construction site is a dangerous place full of potential hazards. This can be especially true for
people unfamiliar with safety rules, such as clients who are visiting the worksite. Even veterans
of the construction industry can be hurt on the job, including your employees.
- Faulty work- A construction business may be liable for finished projects that are structurally
unsound, not up to code, or faulty in some other way. If your work doesn't comply with local,
state, and federal building regulations, your client could lose money and look to you for
reimbursement.
- Missed deadlines- There's a reason school teachers enforce due dates for homework. People
in the business world expect projects to be done on time. Building materials can be delivered
too late, tools can break, and plans might have to be redrawn entirely if something unexpected
is discovered.
Task2
Internal control is all of the policies and procedures management uses to achieve various
goals. These goals can therefore confirm the importance of clearly defined policies. Examples
of these goals include;
-Ensure the reliability and integrity of financial information - Internal controls ensure that
management has accurate, timely and complete information, including accounting
records, in order to plan, monitor and report business operations.
-Ensure compliance - Internal controls help to ensure the University is in compliance
with the many federal, state and local laws and regulations affecting the operations of
our business.
-Promote efficient and effective operations - Internal controls provide an environment in
which managers and staff can maximize the efficiency and effectiveness of their
operations.
-Accomplishment of goals and objectives - Internal controls system provide a
mechanism for management to monitor the achievement of operational goals and
objectives.
Auditing and Reporting, Assessment 2, v1.0 Page 7
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T-1.8.1
Activity ā 03 Due: Week 4 10 Mark
(This activity is to completed both in class and at home)
Assessment description
Task 01: Why is it very important to monitor the Data inputs from different sources within an
organisation? Give an example. (4 marks)
Task 02: What are internal and external factors that influence the resources of an organisation? How
do they impact on organisationās operations and objective?
(6
marks)
Your assessor will be looking for:
Task 01ļ· Identify the different data inputs received from different departments within an organisation
ļ· How to verify those data inputs to ensure data integrity.
Task 02
ļ· Identify the factors both inside and outside of the organisation that influence the company
resources
ļ· Analyse how do they impact on company objectives and business operations
(a)
-Provide constant feedback on the extent to which the projects are achieving their
goals.
-Identify potential problems at an early stage and propose possible solutions.
-Monitor the accessibility of the project to all sectors of the target population.
-Monitor the efficiency with which the different components of the project are being
implemented and suggest improvements.
(b)
-Provide guidelines for the planning of future projects.
-Influence sector assistance strategy. Relevant analysis from project and policy
evaluation can highlight the outcomes of previous interventions, and the strengths and
weaknesses of their implementation.
-Improve project design. Use of project design tools such as the log frame (logical
framework) results in systematic selection of indicators for monitoring project
performance. The process of selecting indicators for monitoring is a test of the
soundness of project objectives and can lead to improvements in project design.
Auditing and Reporting, Assessment 2, v1.0 Page 8
Activity ā 03 Due: Week 4 10 Mark
(This activity is to completed both in class and at home)
Assessment description
Task 01: Why is it very important to monitor the Data inputs from different sources within an
organisation? Give an example. (4 marks)
Task 02: What are internal and external factors that influence the resources of an organisation? How
do they impact on organisationās operations and objective?
(6
marks)
Your assessor will be looking for:
Task 01ļ· Identify the different data inputs received from different departments within an organisation
ļ· How to verify those data inputs to ensure data integrity.
Task 02
ļ· Identify the factors both inside and outside of the organisation that influence the company
resources
ļ· Analyse how do they impact on company objectives and business operations
(a)
-Provide constant feedback on the extent to which the projects are achieving their
goals.
-Identify potential problems at an early stage and propose possible solutions.
-Monitor the accessibility of the project to all sectors of the target population.
-Monitor the efficiency with which the different components of the project are being
implemented and suggest improvements.
(b)
-Provide guidelines for the planning of future projects.
-Influence sector assistance strategy. Relevant analysis from project and policy
evaluation can highlight the outcomes of previous interventions, and the strengths and
weaknesses of their implementation.
-Improve project design. Use of project design tools such as the log frame (logical
framework) results in systematic selection of indicators for monitoring project
performance. The process of selecting indicators for monitoring is a test of the
soundness of project objectives and can lead to improvements in project design.
Auditing and Reporting, Assessment 2, v1.0 Page 8

T-1.8.1
-Incorporate views of stakeholders. Awareness is growing that participation by project
beneficiaries in design and implementation brings greater āownershipā of project
objectives and encourages the sustainability of project benefits. Ownership brings
accountability. Objectives should be set and indicators selected in consultation with
stakeholders, so that objectives and targets are jointly āownedā. The emergence of
recorded benefits early on helps reinforce ownership, and early warning of emerging
problems allows action to be taken before costs rise.
-Show need for mid-course corrections. A reliable flow of information during
implementation enables managers to keep track of progress and adjust operations to
take account of experience.
Activity ā 04 Due: Week 5 10 Marks
(This activity to be completed both in class and at home)
Assessment description
Task 01: Imagine, you are an Internal Auditor of ACA and you meant to do following tasks. Please
justify your answer with examples.
i. What Monitoring techniques you can apply for documentation purpose. Please also advise which one do
you think is the most cost effective control? (4 Marks)
ii. What external influences do you need to consider while implementing those controls?
(3 Marks)
iii. State the important aspects of reviewing in the evaluation process? (3 Marks)
Your assessor will be looking for:
You judgement and analytical skills as an auditor to below aspects:
ā Documentation techniques of Monitoring for internal control
ā Capabilities and influences of stakeholders, competitors and regulators.
ā Review process of evaluation.
Answer:
Business performance monitoring- for a successful business, full understanding of the
major sources of problems and opportunities is worth considerable. A business that is being
managed without fully understanding its sources opportunities as well as existing problems easily
results in unnecessary cost incurred or even loosing profit.
Another monitoring technique is the determining specifically whatever is being measured
and how it is measured. The process of determining what is being measured is appropriately
important for proper business monitoring this is supported by the common need of a fact-based
Auditing and Reporting, Assessment 2, v1.0 Page 9
-Incorporate views of stakeholders. Awareness is growing that participation by project
beneficiaries in design and implementation brings greater āownershipā of project
objectives and encourages the sustainability of project benefits. Ownership brings
accountability. Objectives should be set and indicators selected in consultation with
stakeholders, so that objectives and targets are jointly āownedā. The emergence of
recorded benefits early on helps reinforce ownership, and early warning of emerging
problems allows action to be taken before costs rise.
-Show need for mid-course corrections. A reliable flow of information during
implementation enables managers to keep track of progress and adjust operations to
take account of experience.
Activity ā 04 Due: Week 5 10 Marks
(This activity to be completed both in class and at home)
Assessment description
Task 01: Imagine, you are an Internal Auditor of ACA and you meant to do following tasks. Please
justify your answer with examples.
i. What Monitoring techniques you can apply for documentation purpose. Please also advise which one do
you think is the most cost effective control? (4 Marks)
ii. What external influences do you need to consider while implementing those controls?
(3 Marks)
iii. State the important aspects of reviewing in the evaluation process? (3 Marks)
Your assessor will be looking for:
You judgement and analytical skills as an auditor to below aspects:
ā Documentation techniques of Monitoring for internal control
ā Capabilities and influences of stakeholders, competitors and regulators.
ā Review process of evaluation.
Answer:
Business performance monitoring- for a successful business, full understanding of the
major sources of problems and opportunities is worth considerable. A business that is being
managed without fully understanding its sources opportunities as well as existing problems easily
results in unnecessary cost incurred or even loosing profit.
Another monitoring technique is the determining specifically whatever is being measured
and how it is measured. The process of determining what is being measured is appropriately
important for proper business monitoring this is supported by the common need of a fact-based
Auditing and Reporting, Assessment 2, v1.0 Page 9
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T-1.8.1
analysis of data that helps in further focus effects on specifically very successful tactics.
Therefore, ready measurement as well has the capacity to make it clear I aiming for
improvements.
The most preferable monitoring technique is the business performing monitoring as its worth
considerable as the most cost effective control.
Activity ā 05 Due: Week 5 20 Marks
(This activity to be completed both in class and at home)
Assessment description
This is a case study. Students are required to complete this task both in class and at home.
While in class, discuss the outcome, findings etc. with the teacher. At home, students can do
their own research by other reference books, internet etc.
Your assessor will be looking for:
The purpose of the case study is to relate the broad principles and features of a system of internal control
to a real world business application. As you identify the different components of an accounting system,
refer to the case study and see how the various features can be found. This case study will be used in the
assessment task at the end of
this section.
Case study ā Audit of Downers Ltd.
Introduction
Samuel Vouch, an audit supervisor, has been assigned a new client, Downers Ltd. He is asked to
evaluate the company's internal control system with the object of preparing a preliminary audit program.
Vouch arranges to visit the company and speak to key personnel in the accounting department. He is
introduced to Frank Boss, the Managing Director, and a formal conversation is held:
A. Supervisor What I would like to do first is get as much formal information as possible on all
aspects of the company operations particularly those with a bearing on how
effectively the system of internal control operates.
M. Director Can you give me some examples of the type of information you require?
A. Supervisor A statement of operating policies, an organisation chart, a manual of
procedures, job specification files and duty lists for each position in the
company. And a manual of accounts.
M. Director Quite an exhaustive list. I'll give a secretary a buzz to see whether the files
exist. Our previous auditors put a lot of emphasis on the internal control
questionnaire. Will you do the same?
A. Supervisor Yes. It is an important audit technique for gathering facts about each area of
the internal control system.
I would like to catch up with your principal accounting officer in the next couple of
days. He should be able to help me answer a lot of the questions contained in
the ICQ.
Auditing and Reporting, Assessment 2, v1.0 Page 10
analysis of data that helps in further focus effects on specifically very successful tactics.
Therefore, ready measurement as well has the capacity to make it clear I aiming for
improvements.
The most preferable monitoring technique is the business performing monitoring as its worth
considerable as the most cost effective control.
Activity ā 05 Due: Week 5 20 Marks
(This activity to be completed both in class and at home)
Assessment description
This is a case study. Students are required to complete this task both in class and at home.
While in class, discuss the outcome, findings etc. with the teacher. At home, students can do
their own research by other reference books, internet etc.
Your assessor will be looking for:
The purpose of the case study is to relate the broad principles and features of a system of internal control
to a real world business application. As you identify the different components of an accounting system,
refer to the case study and see how the various features can be found. This case study will be used in the
assessment task at the end of
this section.
Case study ā Audit of Downers Ltd.
Introduction
Samuel Vouch, an audit supervisor, has been assigned a new client, Downers Ltd. He is asked to
evaluate the company's internal control system with the object of preparing a preliminary audit program.
Vouch arranges to visit the company and speak to key personnel in the accounting department. He is
introduced to Frank Boss, the Managing Director, and a formal conversation is held:
A. Supervisor What I would like to do first is get as much formal information as possible on all
aspects of the company operations particularly those with a bearing on how
effectively the system of internal control operates.
M. Director Can you give me some examples of the type of information you require?
A. Supervisor A statement of operating policies, an organisation chart, a manual of
procedures, job specification files and duty lists for each position in the
company. And a manual of accounts.
M. Director Quite an exhaustive list. I'll give a secretary a buzz to see whether the files
exist. Our previous auditors put a lot of emphasis on the internal control
questionnaire. Will you do the same?
A. Supervisor Yes. It is an important audit technique for gathering facts about each area of
the internal control system.
I would like to catch up with your principal accounting officer in the next couple of
days. He should be able to help me answer a lot of the questions contained in
the ICQ.
Auditing and Reporting, Assessment 2, v1.0 Page 10
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T-1.8.1
Samuel Vouch is given a guided tour of the company's office, purchasing and sales sections and the
warehouse. After brief exchanges with the financial accountant, the sales manager and the stores
supervisor, Vouch returns to the Managing Director's office. He receives the following documents/files:
(a) Organisation chart: refer work paper A2
(b) Statement of operating policies: refer work paper A3
(c) Manual of procedures: refer work paper A5
(d) Job specification files
(e) Manual of accounts.
To review the internal control procedures of a trading enterprise such as a wholesaler or a retailer, Vouch
divides the system into two main cycles:
(a) The revenue cycle which consists of sales (credit and cash), trade debtors and
cash receipts
(b) The payments cycle which consists of purchases (credit and cash), trade creditors and cash
payments (creditors and expenses, such as payroll)?
The manual of procedures for Downers Ltd was prepared quickly and unprofessionally at the inception of
the company. It provides Vouch with few details about the current sales, purchasing, and financial
operations.
Vouch's first aim, therefore, is to obtain up-to-date information. He decides to tackle the revenue cycle
first.
Vouch has detailed discussions with the various managers, supervisors and key employees. He also
briefly examines the various forms, documents and records produced by the finance and sales segments.
From this investigation, Vouch is able to prepare:
(a) Internal control questionnaires (ICQ) for sales, accounts receivable and cash receipts (refer to work
papers B1 -4)
(b) Flow charts of the above (refer to work papers (C1-3)
(c) Management letter of the internal control weaknesses for the systems covered above
(refer to work papers D1-3).
WORK PAPER A1
PREPARED BY S. Vouch
Client Downers Ltd
Period 30 June 1997
Extract from Memorandum of Association
1. Shares. Registered as a public company on 5 August 1978.
2. Objects of the company
Auditing and Reporting, Assessment 2, v1.0 Page 11
Samuel Vouch is given a guided tour of the company's office, purchasing and sales sections and the
warehouse. After brief exchanges with the financial accountant, the sales manager and the stores
supervisor, Vouch returns to the Managing Director's office. He receives the following documents/files:
(a) Organisation chart: refer work paper A2
(b) Statement of operating policies: refer work paper A3
(c) Manual of procedures: refer work paper A5
(d) Job specification files
(e) Manual of accounts.
To review the internal control procedures of a trading enterprise such as a wholesaler or a retailer, Vouch
divides the system into two main cycles:
(a) The revenue cycle which consists of sales (credit and cash), trade debtors and
cash receipts
(b) The payments cycle which consists of purchases (credit and cash), trade creditors and cash
payments (creditors and expenses, such as payroll)?
The manual of procedures for Downers Ltd was prepared quickly and unprofessionally at the inception of
the company. It provides Vouch with few details about the current sales, purchasing, and financial
operations.
Vouch's first aim, therefore, is to obtain up-to-date information. He decides to tackle the revenue cycle
first.
Vouch has detailed discussions with the various managers, supervisors and key employees. He also
briefly examines the various forms, documents and records produced by the finance and sales segments.
From this investigation, Vouch is able to prepare:
(a) Internal control questionnaires (ICQ) for sales, accounts receivable and cash receipts (refer to work
papers B1 -4)
(b) Flow charts of the above (refer to work papers (C1-3)
(c) Management letter of the internal control weaknesses for the systems covered above
(refer to work papers D1-3).
WORK PAPER A1
PREPARED BY S. Vouch
Client Downers Ltd
Period 30 June 1997
Extract from Memorandum of Association
1. Shares. Registered as a public company on 5 August 1978.
2. Objects of the company
Auditing and Reporting, Assessment 2, v1.0 Page 11

T-1.8.1
ā...to buy, import, sell and export, repair and generally deal in goods and merchandise, and without
restricting the foregoing, in particular to buy, import, sell and export, repair and deal in swimming pool
accessories, and leisure products.ā
Auditing and Reporting, Assessment 2, v1.0 Page 12
ā...to buy, import, sell and export, repair and generally deal in goods and merchandise, and without
restricting the foregoing, in particular to buy, import, sell and export, repair and deal in swimming pool
accessories, and leisure products.ā
Auditing and Reporting, Assessment 2, v1.0 Page 12
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