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[answered] ACC 700 Milestone Two Guidelines and Rubric The second mile


Hi, could you please do a detailed audit plan based on what you did last time for me? Thank you so much.


ACC 700 Milestone Two Guidelines and Rubric

 

The second milestone is a rough draft of the second artifact for your professional portfolio, a sample audit. The sample audit will consist of three main parts: the

 

business risk analysis, the sample audit program, and the report of recommendations. This will be graded using the rubric at the end of this document and is an

 

opportunity for you to organize your thoughts and receive feedback from your instructor for the final submission. Note that the submission guidelines for this

 

milestone are less demanding than those for the final submission. Once you have submitted this milestone and received feedback from your instructor, it is up to

 

you to incorporate this feedback and complete the artifact by meeting the submission requirements found in the Final Project Guidelines and Rubric document. Newham Company Information

 

Newham Company is a publicly traded company operating in the ?personal product? industry. Newham manufactures cosmetic and body-care products. These

 

products are sold to large department chain stores, such as Target and Walmart, to be sold and distributed to the final consumer. Competitors include Revlon,

 

Inc. (REV ? NYSE) and Avon Products, Inc. (AVP - NYSE).

 

Newham Company has experienced steady growth over the past several years. Recently, there has been a change in executive management, including the CEO

 

and CFO. The change was sparked by questionable bonus payments that were paid to the executive management team based on the company?s performance. In

 

addition, a recent lawsuit has been filed based on claims that a new product was not properly advertised, leading many customers to experience allergic

 

reactions. Sales and Accounts Receivable

 

A sample of weekly sales invoices shall be analyzed from the sales report by product category. All sales are on account. Sales are classified into four product

 

categories: cosmetics, skin care, fragrance, and personal care. Charges to customer accounts should be dated with the date of shipment.

 

Sales invoices are prepared in batches on a daily basis using numbered sales invoices. Sales invoice numbers are automatically generated by the company?s

 

computer system. The accounts receivable clerk does not have appropriate computer rights to override the computer-generated invoice number. Upon

 

preparing sales invoices, the accounts receivable clerk verifies that the first invoice number of the batch is consistent with the last invoice number of the

 

previous batch. Inconsistencies or skipped sales invoice numbers are investigated and resolved before new sales invoices are prepared. The items shipped are

 

compared to the items billed for proper quantity, price, and other sales order terms.

 

The accounting department supervisor compares and reconciles a copy of the daily sales invoice batch report to the daily accounts posting report indicating the

 

individual accounts. The daily account posting report is prepared and sent by the accounts receivable department. Discrepancies are investigated and resolved

 

to help assure that the customer subsidiary accounts are posted for the same total amount posted to the control account. At the end of each month, the total of the trial balance of customer account balances (prepared by the accounts receivable department) are reconciled to the

 

general ledger control account by the accounting department supervisor.

 

Sales invoice batches are dated with the date of shipment, and totals of each batches are accumulated each month and recorded in the accounts receivable

 

control and sales revenue accounts. The accounting department supervisor approves all monthly summary entries before posting to the general ledger.

 

The controller approves all cash refunds and allowance credit memos for sales returns, after initiation by customer service.

 

Cash Management

 

The monthly bank statements are mailed to the controller?s office. Duplicate deposit slips are retained and used when bank deposits are made, the cash receipts

 

journal listing, and the cash disbursements listing to reconcile the general bank accounts. The payroll bank account is also reconciled, utilizing the payroll register

 

retained by the controller?s office.

 

The assistant controller oversees all cash management and activity, including the performance of the bank account reconciliation for each bank account held by

 

the company. The assistant controller compares the cash receipts journal and daily deposit records with the bank deposits and duplicate deposit slips during the

 

bank account reconciliation.

 

Internal auditors will randomly review the bank account reconciliations.

 

Cash Receipts and Accounts Receivable Processing

 

All cash receipts from customers related to sales are credited to accounts receivable individual and control accounts. Cash receipts are received by mail and

 

opened by the office secretary. The office secretary prepares the cash receipt listing and daily deposit. A copy of the cash receipt listing and duplicate deposit

 

slip is sent to the controller?s office. Another copy of the cash receipt listing and the remittance advice are sent to the accounts receivable clerk for posting.

 

The accounts receivable department posts credits to individual customer accounts, dating the entries with the date of the remittance advice and cash receipt

 

listing received.

 

Statements of accounts receivable balances are mailed to customers each month by the accounts receivable accounting department. Customers? reports of

 

disputes or differences shall be handled by customer service. Cash Disbursements

 

All disbursements are made by check, signed by the controller. Artifact Two: Sample Audit Program

 

Your second portfolio artifact will be the professional audit program based on PCAOB audit standards that you create for Newham, an influential client at

 

S.N.H.U, LLC. Make sure to incorporate the feedback you receive from your instructor while developing this audit program. The following sections should be

 

included: Business Risk Analysis: Identifying risk in an organization and the environment in which it operates is the first step in approaching a potential audit and

 

designing an effective audit program. To analyze business risk, you must:

 

o

 

o

 

o

 

o Gain an understanding of Newham

 

Investigate the industry in which Newham operates

 

Analyze and assess the risk, including fraud, involved in the company and industry

 

Identify the relevant PCAOB audit standards and address their relevance to the Newham audit risk assessment Sample Audit Program: An audit program involves compiling a list (program) of procedures for the auditors to perform in order to obtain evidence and

 

reasonable assurance that internal controls are operating properly and thus producing accurate financial statements. To compile a sample audit

 

program, you have been provided with tests of control in revenue and inventory.

 

You must identify the relevant PCAOB audit standards and address their relevance to the Newham audit program. Include other elements as applicable to

 

Newham. Report of Recommendations: Based on an auditor?s experiences and knowledge of accounting, finance, and common errors or pitfalls, it is common for

 

an auditor to provide recommendations. The sample audit program addressed here is merely a small sample, not a comprehensive program. Thus,

 

recommendations for further risk analysis, sample methods, and other concerns should be offered. In your report of recommendations to the head of

 

the new audit team, include the following sections:

 

o

 

o

 

o

 

o Explanation of findings in the risk analysis

 

Sarbanes?Oxley concerns or requirements

 

Recommendations on appropriate sampling methods

 

Recommendations for preparation and success in the external audit Guidelines for Submission: Your paper must be submitted as a two- to three-page Microsoft Word document with double spacing, 12-point Times New Roman

 

font, one-inch margins, and at least three sources cited in APA format. Round all answers up to the nearest dollar value in any calculations.

 

Note that this milestone is a rough draft and the submission guidelines are different for the final project. The final paper will be four to five pages in length with

 

at least seven sources. Refer to the submission guidelines in the Final Project Guidelines and Rubric document.

 

Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information,

 

review these instructions.

 

Critical Elements

 

Business Risk

 

Analysis Sample Audit

 

Program

 

Report of

 

Recommendations

 

Articulation of

 

Response Proficient (100%)

 

Identifies risk in the organization and the environment in which it

 

operates; clearly shows an understanding of Newham and the

 

industry; assesses risk and identifies any relevant PCAOB audit

 

standards

 

Identifies the relevant PCAOB audit standards and addresses their

 

relevance to the Newham audit program

 

Provides recommendations as to explanation of findings,

 

Sarbanes?Oxley concerns, appropriate sampling methods, and the

 

external audit

 

Submission has no major errors related to citations, grammar,

 

spelling, syntax, or organization Not Proficient (0%)

 

Does not identify risk in the organization or the environment in

 

which it operates; does not show an understanding of Newham or

 

the industry; does not assess risk or identify any relevant PCAOB

 

audit standards

 

Does not identify the relevant PCAOB audit standards or address

 

their relevance to the Newham audit program

 

Does not provide recommendations as to explanation of findings,

 

Sarbanes?Oxley concerns, appropriate sampling methods, and the

 

external audit

 

Submission has critical errors related to citations, grammar,

 

spelling, syntax, or organization that prevent understanding of

 

ideas

 

Earned Total Value

 

30 30

 

30 10 100%

 


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