...[pic] |Course Syllabus School of Business ACC/544 Internal Control Systems | |Copyright © 2010, 2009, 2008 by University of Phoenix. All rights reserved. Course Description In this course, students gain a broad perspective of accounting and control that considers attainment of all goals of the organization, including those concerned with financial objectives. Topics include an overview of control, risk management, internal control systems, controls for current asset functions, controls for other accounting classifications, controls for information technology systems, and reporting on controls. Policies Students will be held responsible for understanding and adhering to all policies contained within the following two documents: • University policies: You must be logged into the student website to view this document. • Instructor policies: This document is posted in the Course Materials forum. University policies are subject to change. Be sure to read the policies at the beginning of each class. Policies may be slightly different depending on the modality in which you attend class. If you have recently changed modalities, read the policies governing your current class modality. Course Materials Louwers, T. J., Ramsay, R., Sinason, D., & Strawser, J. (2007). Auditing and assurance services: A look beneath the surface (2nd ed.). New York, NY: McGraw-Hill. McCarthy, M. P. & Flynn, T. P. (2004). Risk from the CEO and board perspective: What all managers...
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...In-class activity 1: Identifying control problems and MCS Source case / paper: Wong’s Pharmacy (textbook p. 20) AND Leo’s Four-Plex Theater (textbook p. 19) In-class activity questions / objectives: Wong’s Pharmacy: 1. What is the main problem facing Wong’s pharmacy? 2. What options are available to Thomas Wong? Leo’s Four-Plex Theater: 3. What are the key controls problems at Leo’s Four-Plex Theater? 4. State the control measures implemented in the theatre and the purpose and limitations of each 5. Are the problems caused primarily by inadequate existing controls and what improvements would you suggest? In-class activity 2: The role of management accounting information in controlling an organisation Source case / paper: Kaplan, R. S., 1984, The Evolution of Management Accounting, The Accounting Review, Vol. LIX, No. 3, pp. 390-418 (SO page 92 to 120). In-class activity questions / objectives: 1. What is the role of accounting information in controlling an organisation? 2. Outline the historical development of the use of management accounting information to control organisations. 3. Why may profit not be a good criterion to “motivate and evaluate short-term performance” in all cases? In-class activity 3: Controls at the Bellagio Casino Resort Source case / paper: Case Study: Controls at the Bellagio Casino Resort (textbook p. 134) In-class activity questions / objectives: Focus on the three key roles at three levels of authority in the...
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...answer four (4) questions. Part B will involve two (2) cases selected form you textbook, Accounting Information Systems 8th edition by James A. Hall. The assignment aims to develop an understanding of Accounting Information Systems structure and their use in the business setting. The task is to answer questions relating to transaction processing, ethics, fraud and internal control. This assignment itself includes several assignments, each of which comprises a part of the students’ task. However, it is well encouraged to include any additional information that students may think will be useful in completing the task. General Rules and Requirements: Reports must be confined to 3,000 words (+/- 5%). As a minimum, a title page, table of contents page (based on your report headings), introduction, conclusion and references should be included. Font type should be Arial (size 11), paragraph spacing should be 1.5. Note: Any additional material from external sources that you “copy and paste” into your report is NOT included in the word limit. Also, ensure it is appropriately referenced. PART A (20 marks) 1. How does SOX affect the provision of attest and advisory services? (5 marks) 2. Compare and contrast the relative advantages and disadvantages of sequential, block, group, alphabetic and mnemonic codes. (5 marks) 3. Discuss the non accounting services that external auditors are no longer permitted to render to audit clients under SOX legislation. (5 marks) 4. Identify...
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...Assessing Information Technology General Control Risk: An Instructional Case Carolyn Strand Norman, Mark D. Payne, and Valaria P. Vendrzyk ABSTRACT: Information Technology General Controls (ITGCs), a fundamental category of internal controls, provide an overall foundation for reliance on any information produced by a system. Since the relation between ITGCs and the information produced by an organization’s various application programs is indirect, understanding how ITGCs interact and affect an auditor’s risk assessment is often challenging for students. This case helps students assess overall ITGC risk within an organization’s information systems. Students identify specific strengths and weaknesses within five ITGC areas, provide a risk assessment for each area, and then evaluate an organization’s overall level of ITGC risk within the context of an integrated audit. Keywords: internal controls; general control; ITGC; risk assessment. INTRODUCTION he Sarbanes-Oxley Act (SOX 2002) and the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 5 (PCAOB 2007) require that the organization’s chief executive officer (CEO) and chief financial officer (CFO) include an assessment of the operating effectiveness of their internal control structure over financial reporting when issuing the annual report. External auditors must review management’s internal control assessment as part of an annual integrated audit of an organization’s internal controls over financial reporting. In short...
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...you to answer four (4) questions. Part B will involve two (2) cases selected form you textbook, Accounting Information Systems 8th edition by James A. Hall. The assignment aims to develop an understanding of Accounting Information Systems structure and their use in the business setting. The task is to answer questions relating to transaction processing, ethics, fraud and internal control. This assignment itself includes several assignments, each of which comprises a part of the students’ task. However, it is well encouraged to include any additional information that students may think will be useful in completing the task. General Rules and Requirements: Reports must be confined to 3,000 words (+/- 5%). As a minimum, a title page, table of contents page (based on your report headings), introduction, conclusion and references should be included. Font type should be Arial (size 11), paragraph spacing should be 1.5. Note: Any additional material from external sources that you “copy and paste” into your report is NOT included in the word limit. Also, ensure it is appropriately referenced. PART A (20 marks) 1. How does SOX affect the provision of attest and advisory services? (5 marks) 2. Compare and contrast the relative advantages and disadvantages of sequential, block, group, alphabetic and mnemonic codes. (5 marks) 3. Discuss the non accounting services that external auditors are no longer permitted to render to audit clients under SOX legislation. (5 marks) 4. Identify six classes...
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...students with an understanding of various business cycle in a company, system documentation techniques to document those cycles, documents and information flow within each cycle and internal control required in each cycle. Students will be required to attend a computer laboratory class to learn system documentations techniques and basic database design. | Subject Learning Outcomes | Upon completion of the subject, student will be able to:Technical competence: in Governance, Risk Management and Internal Control a. Analyze the components of internal control related to financial reporting (T4) * Understand the accounting information system and its position in an organization’s information system * Understand various system documentation techniques * Apply system documentation techniques to describe an accounting information system in an organization * Differentiate the general audit and the IT audit * Understand internal control principles in an organization * Understand the business cycles in a company (in general) * Analyze an accounting information system in a company with respect to the internal control procedures employed in each cycleTechnical competence: in Information Technology b. Analyze the adequacy of general information technology controls and relevant application controls (T1)Critical thinking (TLA only) c. Students are able to arguments, and draw conclusions supported by appropriate-evidenceGlobal...
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...Adelphia Communications Corporation was a cable company, whose owners, John Rigas and his son Timothy,” were charged with bank fraud, securities fraud, and conspiracy.” (Reference #4) They were charged with all fifteen accounts of securities fraud. Another son of his was acquitted, as well as the former treasurer, Michael Mulcahey. “John and Timothy now face 30 years in prison because of the bank fraud charge.” (Reference #4) “They were charged with hiding over $2.3 billion dollars’ worth of debt in the company,” (Reference #4) as well as stealing from there investors. John became so greedy with the money he was taking, that his son became worried about it and tried to limit him to only taking out one million a month. The prosecution had two witnesses that they used in order to bring down the Rigas’, and they were Adelphia executives, James Brown and Karen Crosniak. They testified and tried to say that they weren’t aware of what they were doing, but ignorance of the law doesn’t mean you can get away with what you do. The effects of what they did have impacted the company so much that they had to move to a new location, and they operate under bankruptcy protection. There are many ethical issues that pertain to this issue, as well as many laws that were broken. First, what some call “creative accounting”, this is when a company tries to do something with their accounting reports to make the company look very profitable so that they can attract new investors. This is...
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...ACCOUNTING INFORMATION SYSTEMS: COURSE OBJECTIVES, DESCRIPTION, TOPICS, AND ASSIGNMENTS ACCT-5600 DR. NICOLAOU Fall 2010 COURSE STRUCTURE In the modern world, the majority of accounting entries occur electronically. Accountants and auditors store information in databases, managed by enterprise systems that have a set of controls to ensure that transactions and record keeping happen as expected. E-business Web sites handle transactions automatically, with the accounting data going directly into the necessary databases. The concept of a paper trail has become a bit of a misnomer; today, because of accounting information systems, there is often no paper involved at all; however, it is important to establish the flow the data in different areas of the organization, or audit trail, so as to properly exercise internal controls. AISs help in this purpose. At the outset of this course, you will learn the basics of accounting information systems and business processes. Next, you will learn about database management systems, and the design of various database models. Finally, you will learn about how to use internal controls effectively for risk management, as well as the requirements for business reporting. After completing this course, you should not only have a clear idea of how accounting information systems work, but you should also be prepared to design and configure them to meet the record-keeping and risk management requirements of the organization. In addition...
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...1. Strategy, Governance Concepts and Business Terminology: |1. Business continuity |7. Ownership structure | |2. Balance sheet |8. Acquisition | |3. Capital funds |9. Operating margins | |4. Corporate governance |10. Minority shareholder’s interest | |5. Global competitive strategy |11. Independent directors | |6. Due diligence process |12. Economic crisis | 2. Strategy, Governance and Business Insights, and Lessons from the Case: In this case, there are several points that we should learn in corporate governance. First,every part in the board should be independent, even other agents. They should take the responsibility for their works. Second, the board and shareholders need to communicate. They should exchage their ideas and come out with the decisions that lie in the whole company's interests. Third, the company should pay much attention to the constituents of corporate governance, which includes independent directors, board meetings and code of conduct, business ethics, succession of chief executives, company performance, risk management...
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...Planning…………………………………………….…………….…...2 AUDIT-2 Internal Control…………………………………………………………………….………...3 AUDIT-3 Audit Evidence…………………………………………………………….………………....4 AUDIT-4 Audit Sampling.......................................................................................................…...5 Audit Reports........................................................................................................…....6 AUDIT-5 Compilations and Reviews (SSARS)……………………………………….…………….7 Other Services and Reports………………………………………………….…………….8 Information Technology (IT)……………………………………………………..…………9 Appendix AICPA Released Questions……………….…………….…………….……..….Appendix AUD-2 Internal Control The following is an excerpt from the Roger CPA Review Text books, which are included with purchase of the Roger CPA Review course. Written and updated by your instructor, Roger Philipp, CPA, the textbooks are the perfect companion to our dynamic lectures. www.RogerCPAreview.com AUD-2 Internal Control The second standard of fieldwork states: “The auditor must obtain a sufficient understanding of the entity and the environment, including its internal control, to assess the risk of material misstatement (RMM) of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures.” For Financial Statement audits, the auditor expresses an opinion on the client's financial statements, not on their internal control structure. The reason the...
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...CASE: ARCE DAIRY ICE CREAM I. TIME CONTEXT 1991 II. VIEW POINT Elsie Arce-Romero, VP Advertising and Promotions III. CENTRAL PROBLEM How will Arce Dairy Ice Cream compete in the ice cream industry and regain success using its new brand name? Symptoms: Low market share, wherein, Arce Dairy Ice Cream belongs to the remaining 10% of the ice cream market. Cause: Poor promotional and distribution strategies IV. STATEMENT OF OBJECTIVES: Must Objective: To increase in one month’s time the company’s market share by 5%. Want: To gain favorable market control in the succeeding years. V. AREAS OF CONSIDERATIONS A. Internal Environment Strengths: 1. Arce Dairy Ice Cream is made of fresh carabao’s milk (“all natural”); 2. The finished product is tastier and richer (more flavorful); 3. They have variety of ice cream flavors; 4. They use fresh ingredients like whole seasonal fruits and other natural products; 5. Arce Dairy Ice Cream has distinct taste and high quality (the firm rejects delivery of ingredients that do not pass high quality standards, no matter how inexpensive); 6. They have hundred heads of milking carabaos in the Arce dairy farm; and 7. Their ice cream product has been in the business for years (although Selecta, their former name is now being carried by a competitor, RFM Corporation). Weaknesses: 1. Poor marketing efforts which resulted to local market...
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...BILTRITE BICYCLES INC. CASE STUDY 2 MODULE II 1. Biltrite’s strengths and weaknesses in the internal control Assertion Sale Processing Flowchart: Weakness A. The office was uninformed about the credit approval - Valuation B. Missing customer information and product validation - Valuation C. Invoices were mailed before shipping the goods - Existence And does not matched with bill of lading D. Bill of ladings are not pre numbered - Completeness Strength Good internal control for receivables aging analysis and Follow up of delinquent accounts. Cash Receipts Processing Flowchart: Weakness E. Unrestricted customer check endorsement - Valuation F. Unable to edit and apply discounts and correct net amount - Valuation Purchases and Accounts Payable: Weakness G. Need approval for the prepared voucher for proper -Valuation Account distribution Strengths H. Verifies details on goods received with the receiving report I. Matching control tape with purchase summary for the processed invoices Payment Processing Flowchart: Strengths J. Matching the checks with the documents, amount and remittance details K. Checks are reviewed before signing for approval. L. Cancelled checks/documents to avoid duplication. M. Mailed check directly to vendors after signing the checks. Biltrite’s strengths and weaknesses in the internal control Assertion Payroll Processing Flowchart: Weakness ...
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...INTERNAL CONTROL (Case Study 2) 1. Introduction As President of LJB Company is looking to go public by bringing internal controls system which is as one of the most challenging corporate governance issues because internal control involves everything that controls risks to an organization. Our accounting department has been chosen to evaluate the internal controls of LJB Company. LJB Company is planning to be a publicly traded company in the near future. Our firm needs to evaluate the internal controls To determine where we are on the continuum of internal control compliance, where they need to be and how to close the gaps. One means of assessing readiness is to conduct a “dry run” to detect early warning signs of control deficiencies. A dry run will assess identified financial reporting risks, processes and controls, as well as control designs, against leading practices. We have gathered and provided information of internal control, also arranging the necessary the data into 3 aims of this case study: 2.Background Study LJB Company, a local distributor, has asked your accounting firm to evaluate their system of internal controls because they are planning to go public in the future. The president wants to be aware of any new regulations required of his company if they go public, so he met with a colleague of yours at a local restaurant. The president of the company explained the current system of internal controls to your colleague. Your colleague has...
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...assessment and internal controls Maastricht University School of Business and Economics Maastricht, 20 September 2013 Abel, S. I6077467 Isenia, N. I6064905 Liu, B. I6063209 Study: MSc IB Controlling Course code: EBC4069 Group number: 3 Tutor name: R. Maessen Writing assignment: Case Study RA The case study “ RA (Rest Assured) Insurance Company concerns a company that was involved in a large life insurance scam. RA was facing several risks that had a dramatic impact on the company because of bad decisions, lack of business controls, and a corporate culture that was inefficient and ineffective. The main objective of this case memo is to identify and appropriately assess the risks that the RA insurance company was facing. Further, this case memo introduces internal control solutions to manage those risks. Finally, this case memo provides examples of other companies that have faced problems similar to RA’s “churning” of policies. Identifying and assessing risks There are several strategic, sales & marketing, corporate culture, and corporate governance risks that are causing problems at RA. Firstly, the risk that the maximum amount of possible life insurance is reached is certainly a risk that RA is unable to manage. Although the overall number of life insurance policies was declining, RA continued to put its focus on this product. This might have put additional pressure on the sales force, forcing salesmen perhaps to commit fraud. Although this risk is difficult to control, the management...
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...oreilly@citycolleges.ie Everyone loves ‘tips’ – but you have got to be careful! There is a grain of truth in the following... handy as a checklist also – 3 or 4 points on each: Paper P1 Becker Paper P1 BPP • Corporate governance (CG) concepts, underlying • Public sector governance. fundamentals and arrangements. • Integrated reporting. • CG in other organisations (e.g. public sector, NGOs). • Ethical and CSR theories – applied to scenarios. • Types and forms of CG (e.g. rules based, principles based, insider, outsider systems, UK Corporate Governance Code, Paper P1 LSBF SoX). • Governance: • Agency theory, stakeholders, Mendelow. – Role of Board. – Unitary/two tier. • Board structures, CEO/chairman, directors, NEDs, – Chair role/CEO chair split. committees. – Induction/performance appraisal. – Reward systems. • Internal control and business risk, Turnbull. – Family based structure. • Ethical theories and business codes – Kohlberg, Gray, Owen – Global standards in governance. and Adams, Tucker, AAA. – Stakeholder classifications. • Professions and the public interest. • Control: • Corporate social responsibility, corporate citizen, footprints – Objectives of a sound system. and sustainability. – COSO failures. – Reasons for internal audit. • Integrated reporting, social and environmental auditing. – Internal control disclosure. • Risk management: Paper P1 Kaplan – Risk committee or risk manager. – Strategic/op/static and • Corporate governance comparison of...
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