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Evaluating the likely attainment of information reliability goals

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; and
  • 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:

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

 

DUE DATE:6pm on Sunday 27 September 2015

 

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.There is no formal word count. However, your answers should be professional and concise. If your total word count nears 2,000 words, you are not being concise. Only one file per assignment per group is to be submitted. You must submit your assignment as a pdf file. Please check your pdf file is complete and accurate before uploading. No late changes will be accepted.

 

 

Task:

A flowchart follows this page.

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.Students should demonstrate their understanding of the material covered in class through application of the material to the context in the flowchart. Importantly, this means you are not constrained to the risks and control plans covered in the lectures and tutorials. Answering the question to a high standard will require you to adapt these risks and control plans to the context of the case.  Answers that regurgitate the control plans and risks from class by forcing them to fit this case will not receive high marks.

 

MARK ALLOCATION:

Step 1:                         1 mark

Step 2:                                     3 marks

Step 3:                                     6 marks

Step 4:                                     5 marks

TOTAL:                                 15 marks

 

GROUP LEADER
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By submitting this assignment you are agreeing to the following statement –

We confirm that the work is solely our own and we have not copied or used the work of any other source unless referenced.

 

 

 

  • 1 (a) Complete the following table for each of the three sub-processes in the revenue process depicted in the flowchart:

 

Sub-Process Sales Order Entry Shipping Billing
What are the data inputs? Product and customer/credit card details -Shipping documents (picking tickets ??) ***Payments for processing

Annotated picking tickets

JA : Payment details

ML: Payment notices

What paper data stores are updated and how are the forms sorted? Nothing Payments for processing

Filed in numerical order

Data store for

1.processing (numerical)

2. payment (not mentioned)

3. payments processed (Chronological)

What electronic data stores are updated?

What processing mode is used to update each electronicdata store?

Shopping cart: OLRT

Payment detail OLRT

Sales order: OLRT

Inventory list

(OLRT)

Sales Order (OLRT)

Pending payment (OLRT)

Cash at bank (OLRE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

**** COME BACK LATER

1 Mark

 

 

 

  • (b) For the revenue process documented in the flowchart:
    1. Identify ONE (1) risk for which there is an importantMISSING control plan for each of the information reliability goals in the table below;
    2. Specify the financial statement accounts impacted from this risk;
    3. Explain whether the account would be over or understated as a result of the risk.

3 MARKS (1 mark per information reliability goal)

Promotional number : payments for processing no are filed by processing number, and that promotional number can be used for one or multiple products, therefore there is a risk that when the slips are combined with those from the unsorted for payment data store, there may be a mismatch between the two, – validity and accuracy (wrong customer, wrong item, invalid transaction)

Risk to Information Reliability Information Reliability Goal/s

Potentially Threatened

State the financial statement account/s potentially impacted Explain the potential impact on financial statement account (direction and reason)
1.       Customers that cannot pay VALIDITY (A/r is not relevant), Sales revenue account Overstated, revenue will never be actually received
2.       Data entry error ACCURACY Sales Overstated/ understated  
       
3.       Valid sales order not processed COMPLETENESS (Event) Sales account understated (assuming the sale occurred, has it been shipped yet??not stated)

 

– post billing

(c)

(i) For each risk you identified in part b, recommendthe bestcontrol plan that is currently missing that could be implemented 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.

(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 in part b
Control Plan: Credit Check M1      
Explanation of how plan works and how it will achieve the information reliability goals:
 

 

 

 

Control Activity Information Reliability Goals
Validity Accuracy Completeness
Event Level Detail Level
Risk 2 in part b
Control Plan 2:        
Explanation of how plan works  and achieves the information reliability goals:
 

 

Control Activity

Information Reliability Goals
Validity Accuracy Completeness
Event Level Detail Level
Risk 3 in part b
Control Plan:        
Explanation of how plan works  and achieves the information reliability goals:
 

 

6 MARKS (2 marks per control plan).

d)

(i) Conclude the extent to which the process as it currently operates achieves each of the information reliability goals. Justify your conclusion using present and missing control plans and the design of the process. Your answer should refer to more control plans than the three in your answer to part c, above. I.e., you should demonstrate your breadth of understanding of the process and control plans by referring to ALL of the relevant present and missing plans.

(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).

Information Goal Extent Information Goal Achieved

High/Med/Low/Not achieved

Explanation for rating

 

Validity    
Accuracy    
Completeness

 (Event Level)

   
Completeness

(Detail Level)

   

 

 

5 MARKS (overall mark for the control matrix based on the breadth and depth of the analysis)

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