Running Head: AUDITING bb bb bb bb b bb bb bb bb bb b bb bb b bb bb bb bb b bb bb bb b bb bb b bb bb bb b bb bb bb bb bb bb bb b bb bb bb b bb bb bb bb
bb bb bb bb bb b bb bb bb b bb bb bb bb bb bb bb bb b bb bb bb b bb bb bb 1
5-2 Final Project Milestone Two: Audit Program
ACC 411
SNHU
AUDITING bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb
bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb 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). bb
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
AUDITING bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb
bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb 3
tackle the risk, the firm has decided to monitor the economic landscape. However, apart
from the risk that arises in the 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 –
AUDITING bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb
bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb 4
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 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.
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.
AUDITING bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb bb
bb bb bb bb bb bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb bb b bb bb bb bb bb bb bb bb bb bb bb bb bb 5
