Running Head: AUDITING a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a 1
5-2 Final Project Milestone Two: Audit Program
ACC 411
SNHU
July 31,2022
AUDITING a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a
a a a a a a a a a a a a a 2
Auditing is a vital process that enhances the credibility of the financial statements and
financial reporting of an organization. The proper planning and implementation of an effective
auditing process can help to assess the quality of the internal controls (Younas & Kassim, 2019).
In the case of the Robbins Network Solutions (RNS) entity, the existence of a robust audit
program (plan) is essential for evaluating its internal controls for cash. Some of the key elements
that have been covered in the audit program include the control environment, risk assessment,
control activities, information and communication and monitoring.
Control environment –
Currently, there are six stockholders that own the RNS organization. While two of them
are a part of the board and actively participate in the organizational activities, the remaining
members have no involvement. The business allows its high credit risk customers to make
purchases and make the due payments over time. For addressing the control environment
component relating to the internal control of cash, it is necessary to assess how RNS collects and
keeps track of customer payments. It is essential to ensure that no payment is wrongly represented
in the books as it could distort h e information in its financial statements. A robust control
environment is crucial to have internal control over organizational variables like cash (Omar &
Yussuf, 2021). a a
Risk assessment –
Risk assessment is a vital component of internal control of cash. RNS faces a major risk
while operating in the market, which involves the fluctuation of the dollar currency. This risk can
potentially affect its cash position and overall financial performance. To tackle the risk, the firm
has decided to monitor the economic landscape. However, apart from the risk that arises in the
AUDITING a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a
a a a a a a a a a a a a a 3
external environment, there is a major internal risk. It is related to the accosting of dummy or fake
cash receipts. To tackle the internal risk, RNS must segregate cash-related duties and record-
keeping responsibilities among the employees. It would ensure that no employees other than the
management have comprehensive insight into RNS’ entire cash-related transactions.
Control activities –
A suitable audit program that can help to effectively and comprehensively address the
control activities component relating to the internal control of cash involves the deployment of
stringent policies and protocols. These practices must be followed by the members of the
workforce of Robbins Network Solutions. Furthermore, the performance of the employees must
be evaluated annually to ensure that their practices and processes are aligned with the guidelines,
policies and procedures that have been introduced by the employer. Performance management
and appraisal processes are vital since they can encourage improvement and increase the ongoing
dialogue between the staff and the supervisors (Alesani et al., 2012, p. 3). In the context of the
RNS organization, the managers or supervisors must establish specific goals for their
subordinates so that the employees can contribute to organizational goals. Some of the specific
goals that could be set for the employees include ensuring safe handling of customer information
and following corporate guidelines while transacting with customers.
Information and communication –
For addressing the information and communication component of internal control of cash,
it is withal to communicate and engage frequently. Real-time information flow must be supported
so that managers and supervisors will have complete insight into the status of the business
operations. Some of the key sources that must be regularly checked include the ageing of accounts
AUDITING a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a
a a a a a a a a a a a a a 4
receivable and profit margin. The information must be shared throughout the organization so that
all employees will be aware of RNS’ financial health.
Monitoring –
The regular monitoring of diverse factors by RNS is required, such as the economic
landscape, strategies of competitors, internal performance, ageing of accounts receivable, etc.
Such a comprehensive monitoring approach can help to strengthen the internal control of cash.
AUDITING a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a
a a a a a a a a a a a a a 5
References
Alesani, D., Jensen, G., & Steccolini, I. (2012). IPSAS adoption by the World Food Programme:
an application of the contingency model to intergovernmental organisations. International
Journal of Public Sector Performance Management, 2(1), 61-80.
Omar, F. S., & Yussuf, S. (2021). Effect of Control Environment on the Financial Performance of
Higher Learning Public Institutions in Zanzibar. International Journal of Scientific and
Technical Research in Engineering (IJSTRE), 6(3).
Younas, A., & Kassim, A. A. (2019). Essentiality of internal control in Audit process.
International Journal of Business and Applied Social Science, 5(11), 1-6.
