Overview: Careful planning is a critical part of the success of every audit. However, planning is not simply done at the beginning of the audit but is a continuous and iterative process in which the r

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Careful planning is a critical part of the success of every audit. However, planning is not simply done at the beginning of the audit but is a continuous and iterative process in which the results of one stage of the audit often necessitate revisions to plans for the next stage.

Prompt: Using your analysis of the business environment of RNS from Milestone One, as well as your textbook reading on planning an audit of cash accounts, write an audit program (plan) that could be used to evaluate RNS’s internal controls for cash. Be sure your program addresses each component of internal control.

Specifically, the following critical elements must be addressed:

I. Write an audit program for internal control of cash in Word or Excel. The following components must be included:

Control environment

Risk assessment

Control activities

Information and communication


Overview: Careful planning is a critical part of the success of every audit. However, planning is not simply done at the beginning of the audit but is a continuous and iterative process in which the r
AUDIT PROGRAM FOR INTERNAL CONTROL OF CASH. Robbins Network Services Audit Program of Cash Natali Rotches Southern New Hampshire University ACC 411 Robbins Network Solutions (RNS) is a well-known firm whose main aim is to sell and install computers. The company also provided consulting to the firms and sold networking hardware and software. Auditors have the responsibility of conducting risk assessments and analyzing the internal controls using audit programs. The main aim of Auditing is to analyze, report, and determine whether a particular firm has met the goals and procedures being audited. Therefore, it needs internal control of addressing each component, starting with the risk assessment, control environment, monitoring communication, and control activities information. Moreover, our firm will respond to the RNS immediately after the completion of the audit. The audit will ensure that the Robbins Network Solution has the cash’s incorrect internal controls to remain under acceptance (Elder et al.,2017). When we are discussing internal control, we need to make sure that our data is Encrypted. According to Jacobs, “Encryption is a subset of cryptography and involves the conversion of information by algorithmic, arithmetic processes into a form that is unreadable without authorization or possession of a secret key. The plaintext is an original, unencrypted message or data set.” (2003, p.357) When carrying out an audit, for example, a cash audit, I would recommend a walkthrough. We can use technology such as reviewing the company quick-books and the cloud that store finical data to find how cash transactions and balances are treated and processed. According to Brendan Woods, founder and CEO of AutoEntry: “when using the cloud information is securely stored in data centers, managed by service providers who implement advanced security protection at a level which would be extremely complex and expensive for businesses to emulate on-premise” (2018, para. 2). By that, we can ensure that every cash transaction is accurate and that the balances are recorded accurately by providing a walkthrough. Moreover, the walkthrough ensures the completeness of the information used when recording the cash transaction. As a walkthrough can be a manual way to audit, auditors can use cognitive technology can cultivator through massive data and includes algorithms that allow the software to understand information, purpose, and reflect like humans (Forbes Magazine,2018) I feel that RNS should first send the company’s documented policies, the company’s treasury services, and the firm’s policies and make sure that employees have access to information that they only need for their job description. As well as projecting analytics that will be exploitation data analysis methods to make forecasts. RNS risk assessment will be the materiality of their balance sheet that can be found by authorized personal and compared to the data that can find in programs and the cloud. Compare the sample details for the cash receipts and the cash disbursement journal as well data stored on computers. An audit program can help to speed up and make sure that the audit process is accurate. We can track scanned documents, and by that becoming much more accessible, we can calculate faster-using programs and make inquiries. References Elder, R. J., & Yebba, A. A. (2017). The Roslyn school district fraud: Improving school district internal control and financial oversight. Issues in Accounting Education, 32(4), 25-39. https://meridian.allenpress.com/iae/article-abstract/32/4/25/73203 Jacobs, J. (2003). Sscp study guide & Dvd training system. Rockland, MA: Syngress Pub. Merchant, P. (2016, October 26). Simple small organization audit procedures. Small Business – Chron.com. Retrieved November 22, 2021, from https://smallbusiness.chron.com/simple-small-organization-audit-procedures-14459.html. Nawawi, A., & Salin, A. S. A. P. (2018). Internal control and employees’ occupational fraud on expenditure claims. Journal of Financial Crime. https://www.emerald.com/insight/content/doi/10.1108/JFC-07-2017-0067/full/html Forbes Magazine. (2018, July 20). Forbes Insights: Three technologies that will change the face of Auditing. Forbes. Retrieved November 21, 2021, from https://www.forbes.com/sites/insights-kpmg/2018/07/16/three-technologies-that-will-change-the-face-of-auditing/?sh=5fed36d75440. Woods, B. (2018, September 17). Don’t become a statistic: Accountants and data security. Retrieved from https://www.accountingtoday.com/opinion/dont-become-a-statistic-accountants-and-data-security
Overview: Careful planning is a critical part of the success of every audit. However, planning is not simply done at the beginning of the audit but is a continuous and iterative process in which the r
Describe the major financial business transactions of the company.  If a public company, the best place to understand a company is to read through their public disclosures (i.e.10Q and 10K). For example, go out and read Nasdaq Inc’s 10K for 2018. It can be found on the investor relations web site for Nasdaq. What related financial transactions would there be (i.e. AR, AP, Payroll, Capitalized Software. Current revenue streams: • RNS sells networking hardware and software• Professional services and provides information technology consulting to businesses.• Software DevelopmentFor each line of business, the following should be considered:Sales are the transactions in which property is transferred from buyer to seller for money or credit. Sales transactions are recorded in the accounting journal for the seller as a debit to cash or accounts receivable and a credit to the sales account.Purchases are the transactions that are required by a business in order to obtain the goods or services needed to accomplish the goals of the organization. Purchases made in cash result in a debit to the inventory account and a credit to cash. If the purchase is made with a credit account, the debit entry would still be to the inventory account and the credit entry would be to the accounts payable account.Receipts are the transactions that refer to a business getting paid for delivering goods or services to another business. The receipt transaction is recorded in the journal for the seller as a debit to cash and a credit to accounts receivable.Payments are the transactions that refer to a business receiving money for a good or service. They are recorded in the accounting journal of the business issuing the payment as a credit to cash and a debit to accounts payable.Here is also a good video to use. https://www.youtube.com/watch?v=4PQkoulTdRs     Highest business risks associated with this company. What makes you believe these specifically are the highest risks? In developing an audit plan for a company, the first key step is risk assessment. The main objective of the risk assessment and audit planning processes is to identify, categorize, and prioritize the business areas for audit coverage, so that we can assess the controls that mitigate the highest risks within a company. Risks are broadly defined as actions or inactions that could adversely affect the company’s ability to achieve business objectives. Risks should be evaluated in all these categories:• Strategic• Regulatory• Financial • Technology• Operational• Reputation Have these risks been addressed. You did cover some of these:Sales to customers with a higher credit risk profile. This is a financial risk for nonpayment.Attracting strong technical employeesCharging higher prices given lower buying power can lead to losing customers and revenue.This cannot be done in a vacuum. Key inputs come from interviews with management, results of prior audits (or audits not done for a long period), self-assessments performed by the second line of defense (i.e. compliance, Legal, etc.) and management responsiveness to addressing any open issues from prior reviews. What would you suggest are the appropriate types of internal controls for this industry and why? Effective internal control system, including monitoring, helps management to mitigate the risks described in the above sections. Controls should be mapped to risks. One can’t focus on every risk, so one must prioritize. RNS claims to have addressed these controls:• Frequent monitoring of economy and industry conditions • Monitoring of competitor actions • Hiring of a marketing consulting firm to evaluate the performance of advertising methods • Daily review of aging of accounts receivable • Adherence to a controlled software development budgetThe audit plan should address how these controls will be assessed.     Ethical issues involved with this company and industry that would have a direct effect on the outcome of a financial audit. How could these issues be addressed? Ethical behavior is driven by tone at the top to a large degree. If the company has a code of conduct and training for employees that helps diminish risk of unethical behavior. In this case, a downturn in the economy puts pressure to close sales that might be not up to standards with policies. Also, Given RNS is a closely held company owned by six stockholders, it is not subject to as many stringent ethics standards (i.e. whistleblower).Always best to have most members who are independent of the business. Analyze current events for their impact on this company’s risk and internal control in the future. The market for computer products and technology services is sensitive to economic conditions. When the economy takes a downturn, there is more pressure on sales given there are less of them. Usually internal controls are bypassed in favor of getting the sale. For example: relaxing credit rules to provide credit to customers with slightly higher credit risk.Auditors need to be on the lookout for that. ArticulationPaper was clear with research sources cited. Diverse sources help bring new perspectives to the paper.
Overview: Careful planning is a critical part of the success of every audit. However, planning is not simply done at the beginning of the audit but is a continuous and iterative process in which the r
ROBBINS NETWORK SERVICES INTERNAL CONTROL 0 To: Manager From: Davis Johnson, VP Risk Management. Subject: Internal Controls Cc: Board of Directors Date: November 10, 2021 The significant financial business transactions of the company: Business transactions are vital to understanding various aspects of an organization, particularly those related to its internal control systems. Robbins Network Services (RNS) core finance business activities and transactions entail providing and installing software, networking hardware, and computers for clients. The organization also offers consultation services to other firms regarding information technology. Furthermore, to boost success, RNS utilizes services from experts with technical knowledge to provide much-needed operations. Since the organization seeks to remain competitive in the industry, it presents different products and services. For this reason, Robbins Network Services requires ensuring they give customers the most desirable services and products in a timely way. Evaluation of business risks associated with this company: Business organizations usually experience a wide range of perils that might limit the successful execution of business opportunities. Similarly, RNS experiences specific risks that delay its effective operation in the industry. First, potential downturns linked to the US economy are a significant peril RNS may undergo in its business. According to Zeman, economic downturns create a substantial threat to business transactions and activities (2019). Secondly, RNS encounters increased predatory pricing initiated by competitors eyeing a larger market share, which impacts the company’s potential to reach new customers. Furthermore, RNS also experiences high marketing expenditures that do not present expected outcomes regarding reaching more potential clients. Spending increased amounts of financial resources on inefficient processes is a risk that can affect the business (Akisik and Gal,2017). This explains how poor internal control systems that present unproductive advertising can hurt a business organization. Additionally, RNS also experiences other risks, including credit losses and software development operations’ generation of unsustainable products. In this sense, such business risks are a core threat to company activities, and RNS must work on sorting them out. The appropriate types of internal controls: Successful organizations attribute their long-term prosperity to various firm aspects, including internal controls. adequate and practical internal controls are crucial in operational success (Iwejor,2017). For this reason, RNS requires robust internal controls to boost its activities. First, RNS should focus on implementing duty separation as an internal control. A distinction of duties provides an opportunity for each active personnel to execute specific assigned tasks, such as auditing, reporting, deposits, and bookkeeping. Secondly, RNS requires access controls for its accounting system. The access controls are significant because they allow each accounting system to utilize certain logs to enable only authorized individuals. Thirdly, assets’ physical auditing is a critical internal control that can contribute to successful changes at Robbins Network Services. Physical audits are vital since they provide accurate information concerning inventory and cash, which puts the company in a transparent position. Another notable internal control for RNS involves utilizing 7-day trial balances, which entail double-entry records ascertaining that the firm’s debit records are equal to entries on the credit side. These internal control systems can help boost RNS operations.  Ethical issues involved with company and industry  Ethical issues are a normal part of the business world and understanding them is essential to ensure a business avoids them. RNS faces ethical concerns that it must sort out to operate smoothly in the industry. To begin with, manipulation of figures in the accounting and finance departments is a moral concern that can lead to the fall of a business organization. For instance, derivative manipulation played a central part in the fall of Enron, which is a crucial ethical issue. (MacCarthy,2017). For this reason, RNS must avoid such issues and ensure that its accounting department records essential and relevant details. Another notable moral concern, in this case, entails confidentiality issues. Undesirable maintenance of confidential data and information can lead to leaks, which affect the firm negatively. Thus, the company must avoid these ethical issues for better business outcomes. Current events for their impact on this company’s risk and internal control in the future: One significant event that might impact RNS’ internal controls and firm risk includes advanced technologies. According to the Wall Street Journal businesses require new internal controls due to technological advancement. As an illustration, artificial intelligence and automation change how companies operate, prompting business organizations to implement new internal controls, particularly those working on software aspects. Additionally, the current COVID-19 pandemic has a significant influence on internal controls and company risk. According to Zhu and Song, the outcomes of the pandemic on internal controls can create problems for firms. Thus, the changes and consequences must be assessed to ensure RNS stays ahead of the changing business circumstances (2021). References Akisik, O., & Gal, G. (2017). The impact of corporate social responsibility and internal controls on stakeholders’ view of the firm and financial performance. Sustainability Accounting, Management and Policy Journal. Iwejor, I. C. (2017). Internal controls: Identifying control elements and implementation dynamics facing retail companies (Doctoral dissertation, Walden University). MacCarthy, J. (2017). Using Altman Z-score and Beneish M-score models to detect financial fraud and corporate failure: A case study of Enron Corporation. International Journal of Finance and Accounting, 6(6), 159-166. The Wall Street Journal. (2020). Advanced Technologies Call for New Internal Controls. Retrieved from https://deloitte.wsj.com/articles/advanced-technologies-call-for-new-internal-controls-01581624126 Zéman, Z. (2019). New dimensions of internal controls in banking after the GFC. Economic Annals-XXI, 38. Zhu, P., & Song, J. (2021). The Role of Internal Control in Firms’ Coping with the Impact of the COVID-19 Pandemic: Evidence from China. Sustainability, 13(11), 6294.


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