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ACCT644-1501A-01 Management Control and Auditing

Task Name: Phase 1 Group Project

Group Mates: Adegbite, BensonAdesoji BurgosGarcia, Delia Cruz, Mayra Joseph-Ward, Shirley

Deliverable Length: Part 1: 500–750 words; Part 2: Discussion + 200–300 words

Details:

Weekly tasks or assignments (Individual or Group Projects) will be due by Monday, and late submissions will be assigned a late penalty in accordance with the late penalty policy found in the syllabus. NOTE: All submission posting times are based on midnight Central Time.

 

Part 1

 

In preparation for the Bovar Company’s year-end audit, your manager has asked you to create a document about auditing principles and the code of conduct to share with the rest of the internal auditors. You know that the Institute of Internal Auditors (IIA) provides professional guidance and a code of ethics for internal auditors, but you need to revisit that information to create the memo.

 

Prepare a 2-page document that discusses the following:

•Auditing principles

•Code of conduct

 

Part 2

 

Group Portion

 

To assess Bovar’s liability for the upcoming external audit, discuss the following topics with your team in the small group Discussion Board:

•What is the relationship of risk and materiality?

•How are risk and materiality related?

•How are risk and materiality integrated into the audit process?

•What is an example of a statement that includes both risk tolerance and materiality?

 

Individual Portion

 

Based on the group discussion, apply a risk assessment technique to decision making by using the following example:

 

 

Assume that you are going to use nonstatistical sampling to evaluate the results of accounts receivable confirmation for the Bovar audit. Results from previous audits have been excellent. Because of the high quality of the controls at Bovar, you have decided to use an acceptable risk of incorrect acceptance of 10%. There are 3,000 accounts receivable with a gross value of $9,601,883. You have decided that an overstatement or understatement of more than $150,000 would be considered material.

 

Complete the following:

•Calculate the required sample size using the following formula: ?Sample size = (book value of population / tolerable misstatement) x assurance factor?Assurance factor:?5% ARIA = 3

?10% ARIA = 2

?20% ARIA = 1

 

 

 

•Assume that instead of good results from previous audits, Bovar had poor results and the controls in place were questionable. Discuss the following: ?How would this affect your sample size?

?How would you use this information in your sample size determination?

?How would you select the accounts for testing using systematic selection?

 

 

Please submit your assignment.

 

In your own words, please post a response to the small group Discussion Board and comment on other postings. You will be graded on the quality of your postings.

 

For assistance with your assignment, please use your text, Web resources, and all course materials.

 

For assistance with your assignment, please use your text, Web resources, and all course materials.

 

Course Materials

 

Course Materials

 

Points Possible: 100

Date Due: Monday, Jan 12, 2015

Objective: •Explain how accounting information is used to formulate ethical management policy.

•Use accounting information to measure and evaluate performance.

•Evaluate business risk using risk assessment techniques.

 

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