Running Head: AUDITING aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa a aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa
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5-2 Final Project Milestone Two: Audit Program
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SNHU
AUDITING aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa
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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). aa aa
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
AUDITING aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa
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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 aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa
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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.
AUDITING aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa
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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.
