Audit Proposal

In: Business and Management

Submitted By laurenzo
Words 1340
Pages 6
Learning Team A: Lisa Laurenzo, Bambi Snyder, Oscar Paulino, & Edsel Abreu
Audit Proposal
ACC/542 Accounting Information Systems
Instructor: Anita Rodriguez

Audit Proposal
Kudler Fine Food has expanded their business and has updated their computer systems to meet demands. As IT information is adopted within the organization, automation control processes have become more virtualized. To ensure that KFFs computerize systems function properly an audit must be performed on an annual basis. Management at Kudler Fine Foods wants to see the proposed audit schedules for all systems. Management wants to know the types of audit and how they will be conducted. In addition, management would like to know about events that might prevent reliance on auditing through the computer. There are four types of IT audits: attestation audits, findings and recommendations audits, SAS 70 audits, and statement auditing standards (SAS) 94 audits. During an attestation audit, the auditor provides assurance the client is responsible for something. After the responsible party makes the assertion of a letter to the auditor, the auditor begins the audit of the company. The auditor examines, reviews, or performs an agreed-upon procedure (AUP) and provides a written report to the responsible party on their findings. The AUP report is usually a negative assurance report stating what it was asked to do and any findings to provide feedback to the user.
The SAS 70 audit stands for the “State on Auditing Standards No. 70”. The SAS 70 audit is performed by a CPA firm and a data security expert with experience in network security and data center (Online Tech, 2009). A type 1 audit is performed for a specific date and a type 2 audit is performed for a specific period of time. The first step of a SAS 70 audit is the company prepares a list of claimed controls. The auditor visits the company,…...

Similar Documents

Audit

...Skupiewska-Drozd Acct. 723 Prof. A. Dignam Case 1.9 ZZZZ Best Company, Inc Question 1. Audits are expensive. For small business, the cost of an audit will run into the thousands of dollar, for large corporations the cost may exceed a million dollars. The most common reason for a small business to incur the cost of an audit is the influence exerted by a bank that insists upon audited financial statements as a condition for granting a bank loan. Sometimes the cost of audit would exceed its benefit. The alternative is to retain a public accounting firm to perform other services such as review of financial statements. A review of financial statements by public accounting firm is substantially less in scope than an audit and is designed to provide limited assurance on the credibility of the statements. It stresses inquiries by the CPA and comparison of amounts in the statements to comparable financial and nonfinancial data. These comparisons, which are referred To us as analytical procedures, are useful in bringing to light possible misstatements of financial statements amounts. The distinctions between a review and an audit are as follows: Review: • It gives limited assurance that the financial statements do not have any known errors of departures from GAAP. • It generally base on analytical procedures and inquiries. • It does not consider the client’s internal controls. Audit: • It gives reasonable assurance that the financial statements are......

Words: 1156 - Pages: 5

Audit

...audit Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.[1] Internal auditing is a catalyst for improving an organization's effectiveness and efficiency by providing insight and recommendations based on analyses and assessments of data and business processes there are 3 types of Audit : 1. Internal audit ( first party audit),to ensure implementing, maintaining and improvement of the system audited. 2.Customer audit ( second party audit), to evaluate the suppliers performance and compliance for standards. 3.External audit (third party audit), to ensure implementing and documenting according to standards. Audit Process Prevalent Audit Concerns Risk Assessment Process Definition of Internal Audit The audit process is generally a ten-step procedure as outlined below. Please click through the steps in order to better understand the process. 1. Notification 2. Planning 3. Opening Meeting 4. Fieldwork 5. Communication 6. Report Drafting 7. Management Response 8. Closing Meeting 9. Report Distribution 10. Follow-up Notification First, you will receive a letter to inform you of an upcoming audit. The auditor will send you a......

Words: 768 - Pages: 4

It Audit

...Best Regards, Sara Colle, Aaron Hughes, Mohammed Kahn, Paul Koller Business Continuity Planning and Disaster Recovery 1. RISKS – Loss of customers, loss of profits, loss or reputation, loss of government approval to do business Hurricane Sandy recently paralyzed New York City, the financial capital of the world. This event highlighted the importance of Business Continuity Planning for organizations. Disasters come in various forms including: fire, pandemic, terrorism, biological attacks, tornadoes, hurricanes, typhoons, flooding, earthquakes, and acts of god. Bob’s Inc.’s management has confirmed that a full Business Continuity Planning and Disaster Recovery plan exists and is annually tested and updated. Global Technology Audit Guide (GTAG) suggests seven key components to Business Continuity Planning and Disaster Recovery. Our team inquired about the status of each component with management. Management’s responses are summarized in italics at the end of each component below and can be found in entirety in Appendix A. 2.1. Management Support — Management must show support to properly prepare, maintain, and practice a business continuity plan (BCP) by assigning adequate resources, people, and budgeted funds. Bob Inc.’s IT Management confirms that entire organizations management and department heads are in support of BCP/DR. 2.2. Risk Assessment and Risk Mitigation — Potential risks due to threats such as fire, flood, etc., must be identified,......

Words: 5459 - Pages: 22

Audit Proposal

...Audit Proposal Audits are a critical and an important part of every company whether performed internally or externally. With the expansion of Kudler Fine Foods and update of their information system, the company must ensure system processes are functioning properly. Conducting an audit will identify any problems with the newly implemented computer system. There are several types of audits that can be performed for each process. The most important factor is choosing the appropriate type of audit that best fits the process. Most audits are conducted similarly and should always be completed in an efficient and effective manner. Furthermore, there are events that could prevent the reliance of an audit through the computer in which management must be made aware of and evaluate accordingly. Types of Audits There are various types of audits that will give credence to the accounting records, accounting policies, and financial statements of a business organization. For example, an internal audit can be conducted of the accounting department to examine company policies and procedures as well as development and evaluations of internal controls. Internal audits will provide management with insight and recommendations based on analysis and assessment of data and business processes. An external audit will assess the computer-based accounting system and provide judgment on the accuracy and fairness of financial statements. “The fairness evaluation is conducted in the context of......

Words: 1146 - Pages: 5

Audit

... The Marketing Audit Comes Of Age Philip Kotler, William Gregor and William Rogers Comparing the marketing strategies and tactics of business units today versus ten years ago, the most striking impression is one of marketing strategy obsolescence. Ten years ago US, automobile companies were gearing up for their second postwar race to produce the largest car with the highest horsepower. Today companies are selling increasing numbers of small and medium-size cars and fuel economy is a major selling point. Ten years ago computer companies were introducing ever-more powerful hardware for more sophisticated uses. Today they emphasize mini and microcomputers and software. It is not even necessary to take a ten-year-period to show the rapid obsolescence of marketing strategies. The growth economy of 1950-1970 has been superseded by a volatile economy which produces new strategic surprises almost monthly. Competitors launch new products, customers switch their business, distributors lose their effectiveness, advertising costs skyrocket, government regulations are announced, and consumer groups attack. These changes represent both opportunities and problems and may demand periodic reorientations of the company’s marketing operations. Many companies feel that their marketing operations need regular reviews and overhauls but do not know how to proceed. Some companies simply make many small changes that are economically and politically feasible, but fail to get to the heart of the......

Words: 6893 - Pages: 28

Audit

...governmental financial audits incorporate the AICPA standards of reporting and prescribe supplemental standards to satisfy the unique needs of governmental audits. Which of the following is a supplemental reporting standard for governmental financial audits? a. Auditors should report the scope of their testing of compliance with laws and regulations and of internal controls. b. Material indications of illegal acts should be reported in a document distributed only to the entity's senior officials. c. All changes in the audit program from the prior year should be reported to the entity's audit committee. d. Any privileged or confidential information discovered should be reported to the organization that arranged for the audit. ANSWER: Choice "a" is correct. The auditor's report on compliance and on internal control over financial recording (based on an audit) must include the scope of testing of compliance and internal control. Choice "b" is incorrect. Material indications of illegal acts are not only reported to the members of the governing body of the audited entity and their senior staff officials but, in some circumstances, auditors should report illegal acts directly to external parties (such as the grantor agency). Choice "c" is incorrect. Although GAO standards require that the auditor communicate information regarding the nature, timing and extent of planned testing to officials of the audited entity and to individuals contracting for the audit, reporting of all......

Words: 11923 - Pages: 48

Audit

...Audit Committee Material Weaknesses in Smaller Reporting Companies December 2nd, 2010 OUTLINE: I. SUMMARY OF THE ARTICLE II. PROBLEM STATEMENT III. SUGGESTIONS FROM THE AUTHORS IV. RELEVANCE TO AUDITING ENVIRONMENT V. CONCLUSION I. Summary of the Article This report summarizes the article published by Gramling, Audrey A, Hermanson, Dana R, Hermanson, Heather M in the CPA journal of 2009. The main focus of the article is to show the importance of audit committee in auditing and analyze problems of small companies face in developing effective audit committee. The critical issue of the article is material weaknesses related to audit committee and possibility of management’s override of internal control within small companies. Before, the Sarbanes-Oxley Act, audit committees in public companies were under more pressure to understand not just a company's financial statements, but to challenge management and auditors on key accounting, internal control and compliance issues. After the financial scandals that caused firms like Enron and WorldCom to collapse, audit committees have risen from relative darkness to center stage in modern corporate world. As it’s indicated in the article, the new role, the typical audit committee is charged with many duties. Because new role of audit committee increased complexity and accountability, it's easy for directors of small public companies to feel besieged when...

Words: 1917 - Pages: 8

Audit Proposal

...Audit Proposal Tonja Wallace Georgia State Accounting Information Systems ACC 542 Deborah Johnson September 06, 2010 Audit Proposal Our firm has been working with Kudler Fine Foods for several weeks implementing a new accounting information system (AIS) that will assist with the process of payroll, inventory, accounts receivable and payables along with the daily sales. The current AIS that have been implemented will address the systems integrity and the new system will help KFF to ensure that the data is accurate and reliable for the preparation of the financial statements for the organization. Now that the new accounting information system has been set up it is now time to perform an audit of KFF internal controls. In order to do this we will take a look at the different types of audits that maybe used for each process. Then recommend the audit that will most fit the needs of KFF as well as give an explanation of how the audit will be conducted. KFF will also be informed of events that might prevent the reliance on auditing through the computer. An audit for IT involves evaluating the computer’s role for achieving audits and control objectives. These audits look at the components for the AIS for the users, procedures, hardware, software, data communications and the database. According to Bagranoff, Simkin, and Norman (2008) there are four main types of IT audits and they are attestation, findings and recommendations, SAS # 70 and last but not least SAS......

Words: 1053 - Pages: 5

Disclosure of the Engagement Partner in the Audit Report an International Perspective on the Pcaob Proposal

...Disclosure of the Engagement Partner in the Audit Report An International Perspective on the PCAOB Proposal By Jason Bergner and Ling Lin n December 4, 2013, the PCAOB conducted an open meeting to reconsider its proposal to require the disclosure of the engagement partner (and certain other participants) in the audit report, as part of its efforts to improve transparency. The PCAOB is carefully considering the likely costs and benefits of this requirement before making a final decision (http://pcaobus.org/News/Speech/Pages/120 42013_Harris_Transparency.aspx). The authors present arguments for and against requiring audit partner disclosure and summarize the current practice and empirical findings in foreign jurisdictions, such as the EU and China. While the debate for the past five years has been an argument about the possible costs and benefits of a signature or disclosure requirement, the authors believe that the movement of the international community toward adopting common standards may eventually warrant a similar U.S. approach. O Debating the Issue The signature/disclosure requirement has been an issue for almost a decade, first appearing on the PCAOB’s agenda in 2005 (Tammy Whitehouse, “Divided PCAOB Presses for Names in Audit Report,” December 4, 2013, Compliance Week, http://www.complianceweek.com/dividedpcaob-presses-for-names-in-audit-report/article/323604/). The current proposal to disclose of the engagement partner in the audit report stemmed, at least in......

Words: 2735 - Pages: 11

Audit

...CHAPTER ONE Introduction 1.1Background of the study The role of the Internal Audit traditionally has been limited to expressing Recommendations on financial statements and related issues of legality, regularity and fraud. This involves assessments of whether transactions were properly controlled, whether care was taken in the collection and custody of revenues, whether expenditures were properly incurred and generally, whether the executives’ intentions were being met. However, this approach does not provide information on waste, inefficiency or ineffectiveness. Increased public expenditure, the need for more rational and informed decision making in the use of resources and the growing demand for public accountability of those who manage public resources necessitated a new and expanded scope audit–performance audit.Today, performance audit has become one of the major tasks in most developed and in some developing countries. According to Financial administration proclamation 648/2001 (E.C) article No 7 sub article 1 (a) Internal audits in Ethiopia are already provided with mandates to undertake performance audit in the public bodies. Traditional financial and compliance audits will continue to play an essential part; it is anticipated, however, that there will be a gradual and planned growth of performance audit work. 1.2 Objective of the study 1.2.1 General objective The general objective of this study is to evaluate......

Words: 7817 - Pages: 32

Audit

...6-22 a. The function of the independent auditor in the audit of financial statements is expression of an opinion on the fairness with which they present, in all material respects, financial position, results of operations, and its cash flows in conformity with generally accepted accounting principles. The auditor's report is the medium through which he expresses his opinion or, if circumstances require, disclaims an opinion. In either case, he states whether his audit has been made in accordance with generally accepted auditing standards. These standards require him to state whether, in his opinion, the financial statements are presented in conformity with generally accepted accounting principles and to identify those circumstances in which such principles have not been consistently observed in the preparation of the financial statements of the current period in relation to those of the preceding period. The responsibilities of the independent auditor in the audit of financial statements are planning and performing the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud. Because of the nature of audit evidence and the characteristics of fraud, the auditor is able to obtain reasonable, but not absolute, assurance that material misstatements are detected.   b. The responsibilities of the independent auditor for the detection of fraud is provide reasonable assurance of detecting......

Words: 566 - Pages: 3

The Audit

...APOLLO SHOES, INC. An Audit Case to Accompany AUDITING AND ASSURANCE SERVICES Prepared by Timothy J. Louwers James Madison University J. Kenneth Reynolds Louisiana State University McGraw-Hill/Irwin ii © The McGraw-Hill Companies, Inc., 2007 Apollo Shoes, Inc. Acknowledgements We would like to gratefully acknowledge the following individuals for their assistance in preparing and completing this case. Sincere appreciation is due to Reagan McDougall, Meghan Peters, Denise Patterson, Bob Ramsay, and several classes of Louisiana State University students. Their suggestions greatly enhanced several portions of the case. However, we remain responsible for all errors of commission and omission. McGraw-Hill/Irwin Apollo Shoes, Inc. © The McGraw-Hill Companies, Inc., 2007 iii McGraw-Hill/Irwin iv © The McGraw-Hill Companies, Inc., 2007 Apollo Shoes, Inc. Introduction Apollo Shoes, Inc. is an audit case designed to introduce you to the entire audit process, from planning the engagement to drafting the final report. You are asked to assume the role of a veteran of two-to-three “busy” seasons, “in-charging” for the first time. While Apollo Shoes’ growth has been phenomenal (there has been a dramatic growth in unaudited net income over the past year), there are some concerns: the client doesn’t want your firm (Anderson, Olds, and Watershed (AOW)) to talk with the predecessor auditor, a labor strike is looming, and one of......

Words: 36222 - Pages: 145

Acc 542 Week 5 Individual Assignment Audit Proposal

...Week 5 Individual Assignment Audit Proposal Purchase here http://chosecourses.com/acc-542-week-5-individual-assignment-audit-proposal Description ACC 542 Week 5 Individual Assignment Audit Proposal Management at Kudler Fine Foods now wants to see the proposed audit schedules for the systems analyzed by your team in Week Two. Prepare a brief of no more than 1,050 words in which you address the following: Distinguish between the types of audits that might be used for each process. Recommend the audit most appropriate for each process. Explain how the audits will be conducted. Identify events that might prevent reliance on auditing through the computer. ACC 542 Week 5 Individual Assignment Audit Proposal Purchase here http://chosecourses.com/acc-542-week-5-individual-assignment-audit-proposal Description ACC 542 Week 5 Individual Assignment Audit Proposal Management at Kudler Fine Foods now wants to see the proposed audit schedules for the systems analyzed by your team in Week Two. Prepare a brief of no more than 1,050 words in which you address the following: Distinguish between the types of audits that might be used for each process. Recommend the audit most appropriate for each process. Explain how the audits will be conducted. Identify events that might prevent reliance on auditing through the computer. ACC 542 Week 5 Individual Assignment Audit Proposal Purchase......

Words: 757 - Pages: 4

Audit

.................................................................................. 12! NOT FOR SALE OR DISTRIBUT NOT FOR SALE OR DISTRIBUTION Evaluation Criteria and Rubrics.............................................................................................................. 13! Lab #2 – Assessment Worksheet ............................................................................................................ 14! Laboratory #3 .............................................................................................................................................. 17! © Jones & Bartlett Learning, LLC © Jones & Bartlett Learning, LLC Lab #3: Define a Process for Gathering Information Pertaining to a HIPAA Compliance Audit ......... 17! NOT FOR SALE OR DISTRIBUTION NOT FOR SALE OR DISTRIBUTION Learning Objectives and Outcomes ........................................................................................................ 17! Required Setup and Tools ....................................................................................................................... 17! Recommended Procedures...................................................................................................................... 17! © Jones & Bartlett Learning, LLC © Jones & Bartlett Learning, LLC Deliverables ............................................................................................................................................ 20! NOT......

Words: 30948 - Pages: 124

Audit

...This paper is an overall assessment of the financial fraud that occurred at Worldcom. This paper will show that if an operational audit had been conducted how it could have uncovered the fraud at an earlier time. | Initial Survey and Engagement Development  In the introduction survey there are several topics that should have been discussed in the initial survey and engagement development for an audit of Worldcom. When reading the Worldcom case the very first thing that I noticed was there was no written Delegation of Authority (dag). No one really had the ability to say no and there was no approval process for any type money or asset and liability transfers. When the accrual transfers took place, there were people that knew it was bad accounting but they did not have the ability to say no, and if they did, there job was threatened. This in general seems to me to put this company at a very high risk for fraud. Once this dag is established there is a line of signatures that must be obtained in order for anything in regards changes in the accounts to take place must have the correct signature according to the amount of money that is being adjusted. Another question in the initial survey would be a request for information (ROI) in regards to the accounting structure and the accounts that are involved in the area that is going to be audited. Also a ROI for all accrual accounts and back up information for payments. Asset accounts and deposit information will also need to be......

Words: 2593 - Pages: 11