ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS SEMESTER 2, 2014 ASSIGNMENT 2 OVERVIEW: This assignment provides an opportunity for you to consider the meaning and operation of internal control by reflecting on the design, implementation and effectiveness of internal control plans in a business process. The specific skills addressed include: • Reading and analysing system documentation • Completing an internal control analysis for a business process • Evaluating the likely attainment of information reliability goals • Evaluating the appropriateness and potential use of control plans within the process. GROUP SIZE: The assignment is a group assignment. Assignments are to be completed in groups of four or five . You may work with any student enrolled in the subject. GENERIC SKILLS ADDRESSED:
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2
OVERVIEW:
This assignment provides an opportunity for you to consider the meaning and operation of internal control by reflecting on the design, imple-mentation and effectiveness of internal control plans in a business process.
The specific skills addressed include:
• Reading and analysing system documentation
• Completing an internal control analysis for a business process
• Evaluating the likely attainment of information reliability goals
• Evaluating the appropriateness and potential use of control plans within the process.
GROUP SIZE:
The assignment is a group assignment. Assignments are to be completed in groups of four or five. You may work with any student en-rolled in the subject.
GENERIC SKILLS ADDRESSED:
This assignment addresses the following generic skills: collaborative learning; problem solving; team work; interpretation and analysis; critical thinking; evaluation of data and other information; use of computer software; written communication; application of theory to practice.PLAGIARISM: You are cautioned against copying and relying on the work of others. Copying the work of others is plagiarism and as such carries severe penalties.
WEIGHTING: 15% of the overall subject result
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2
DUE DATE: 11pm on Monday 6 October 2014
SUBMISSION:
Assignments must be submitted electronically via the LMS link to the assignment tool. Please complete the cover sheet which follows and include it as your first page of the assignment. Your answer must be typed, double-spaced, 12 point font and be a maximum of 1500 words (ex-cluding the reference list). Only one file per assignment per group is to be submitted. You must submit your assignment as a pdf file.
Please check that your .pdf file is legible and correct before submitting.
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2
Task:
A flowchart for a business process follows this page. You are required to (1) analyse the process and complete the attached control framework, and (2) answer the question that follows the control framework. All answers should be based around the process that is depicted in the flowchart provided.
(1)CONTROL ANALYSIS FRAMEWORK
You are required to complete the four stages of the Control Analysis Framework.
Follow the instructions contained within each stage when completing the control framework.
(2)WRITTEN QUESTIONS
One short answer question is provided. Your group is to prepare an answer for this question. The answer for this question should NOT exceed 500 words.
MARK ALLOCATION:
Question 1 (PARTS A-D): 25 marks
Question 2: 5 marks
TOTAL: 30 marks (converted to a score out of 15 for assessment)
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2Word Limit: 1400-1500 WORDS (excluding in-text references and reference list). Note: a 10% leeway is built into the word limit range above. Your assignment cannot exceed 1500 words.
Where appropriate, references should be used to substantiate your discussion. Use either the Harvard or APA referencing systems. More infor-mation is available from the Centre for Teaching and Learning: http://fbe.unimelb.edu.au/celt/tools/helpsheets
ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2
GROUP LEADER
Student Number
Student First Name
Student Last Name
Tutor’s Name
Tutorial Day
Tutorial Time
OTHER GROUP MEMBERS:
Student Number
Student First Name
Student Last Name
Tutor’s Name
Tutorial Day
Tutorial Time
Student Number
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2Student First Name
Student Last Name
Tutor’s Name
Tutorial Day
Tutorial Time
Student Number 575948
Student First Name Anna
Student Last Name Nguyen
Tutor’s Name Alec BaenzigerTutorial Day Monday
Tutorial Time 4.15pm
Word count (excluding reference list, must not exceed 1500 words)
By submitting this assignment you are agreeing to the following statement –
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2We confirm that the work is solely our own and we have not copied or used the work of any other source unless referenced. The
word count above is accurate.
ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2
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M3
M1 M2
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2[0.] (a) Complete the following table:
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2
[(b)] For the process documented in the flowchart: [b.] Identify ONE (1) risk for which there is a MISSING control plan for each of the information reliability goals; [b.] Specify the financial statement accounts impacted from this risk;[b.] Specify whether the account would be over or understated as a result of the risk.
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ASSIGNMENT 2
(c)(i) For each risk you identified in part b, recommend the best control plan that is currently missing that could be imple-mented to mitigate the risk, and complete the tables that follow. You must provide a detailed explanation of how the plan works and how it will address the information goals.YOU CANNOT USE BATCH TOTALS AS A CONTROL PLAN FOR THIS SECTION OF THE ANALYSIS
(ii) Annotate the flowchart provided to indicate where each suggested control plan should be included in the process in order to mitigate the risk.
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ASSIGNMENT 2
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[(b)] For the process documented in the flowchart: a. Identify ONE (1) risk for which there is a MISSING control plan for each of the information reliability goals; b. Specify the financial statement accounts impacted from this risk;c. Specify whether the account would be over or understated as a result of the risk.
Risk to Information Reliability Information Reliability Goal/s Potentially Threatened
Financial statement account/s impacted
Impact on financial statement account(over or understated)
1. Theft VALIDITY Unearned Revenue Overstated
2. Data entry errorACCURACY/COMPLETENESS DE-TAILED LEVEL
Unearned Revenue Over or understated depending on the direction of error
ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2(c)
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2(i) For each risk you identified in part b, recommend the best control plan that is currently missing that could be imple-mented to mitigate the risk, and complete the tables that follow. You must provide a detailed explanation of how the plan
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ASSIGNMENT 2works and how it will address the information goals.YOU CANNOT USE BATCH TOTALS AS A CONTROL PLAN FOR THIS SECTION OF THE ANALYSIS
(ii) Annotate the flowchart provided to indicate where each suggested control plan should be included in the process in order to mitigate the risk.
Control Activity
Information Reliability Goals
Validity Accuracy
Completeness
Event Level
Detail Level
Risk 1: Theft
Control Plan: Deposit slip authorised by two supervisors M1 M1 M1
Explanation of how plan works and achieves the information reliability goals:
After the supervisor prepares the deposit slip, another person of authority checks that amount to be deposited into the bank accurately matches the amount recorded in the daily cash report. Once the second person of authority confirms that amount is corresponds, he/she will sign the deposit slip as well. This preventative control reduces the possibility of cash being stolen and ensures that the the amount of cash recorded deposited into the bank equals the displayed by the valid daily cash report. The primary goal of this plan is to ensure that all transactions that are recorded are also receipted by the bank so that validity is achieved. The control plan also ensures that the deposit slip has been correctly filled in and hence allowing accuracy and completeness at the detail level to be achieved.
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2
Control Activity
Information Reliability Goals
Validity Accuracy
Completeness
Event Level
Detail Level
Risk 2: Error in recording amount received from customer/data entry
Control Plan 2: Redundant data check M2
Explanation of how plan works and achieves the information reliability goals:
The customer service representative enters the cash amount received twice and then the computer checks that two sets of inputs are identical and only when the two sets of inputs are identically that the customer service representative can proceed to next step of the transaction. This amount is then reiter -ated to the customer to confirm that the amount keyed in is accurately reflects the cash given by the customer. This control plan ensures that incorrect data entry is detected in time and correction measures can be put in place to so that the correct amount is registered in the system. This is done before cash is stored into cash register so that if customer claims that amount is incorrect, this can be confirmed by recounting the amount of cash given.
Control Activity
Information Reliability Goals
Validity Accuracy
Completeness
Event Level
Detail Level
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2Risk 3: Failure to update the card balance
Control Plan: Interactive feedback check M3 M3
Explanation of how plan works and achieves the information reliability goals:
After the card balance has successfully been updated, the computer displays the new account balance and the customer ser-vice representative confirms this with the customer. This ensures completeness in the event level is achieved level as it noti-fies when the event has successfully been captured into the system. It also allows the confirmation that the correct amount of cash has been keyed into the system and hence ensuring the accuracy is achieved. If the new card balance is identified to be incorrect, corrective measures can be put in place in a timely manner such as reprocessing the entire transaction so that the correct amount of the transaction is captured in the system’s records. The primary goal of this control plan is to ensure that all valid transactions are recorded into the system so that completeness at the event level is achieved.
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d)
(i) Conclude the extent to which the process as it currently operates achieves each of the information reliability goals. Jus-tify your conclusion using present and missing control plans. Your answer should refer to more control plans than the three in your answer to part c, above.(ii) Annotate the flowchart to indicate where the present control plans that you mention in your evaluation are in the process (P-X); and annotate where the missing control plans that you mention in your evaluation should be (M-X).
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2
Annotations on flowchart 1 MARK
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSISSEMESTER 2, 2014
ASSIGNMENT 2[(0)] There has been a suggestion made to management that batch totals could be used in the process. Advise manage-
ment on how batch totals could be employed. Specifically:
[(0)] Where in the process batch totals should be used (refer to flow numbers on the flowchart).
[(0)] The type of batch total that should be used and why.
[(0)] Identify and describe the risk and information goal(s) that batch totals would address.
[(0)] Explain how the batch total you suggested addresses the risk and goal in (iii).
