You Are Conducting the Audit of a Medium-Sized Company That

question 72

Essay

You are conducting the audit of a medium-sized company that has a chief accountant and three employees.Segregation of duties is excellent,with jobs allocated to provide maximum levels of controls.Segregation is supported by accounting software with user identification and passwords that limit functions to the appropriate jobs.
Required:
A)What type of audit approach would you recommend? Why?
B)How would your answer change if the accounting department was organized on a job-sharing basis so that all employees did some of every task to keep the work more interesting? Why?

• A)What type of audit approach would you recommend? Why?
• B)How would your answer change if the accounting department was organized on a job-sharing basis so that all employees did some of every task to keep the work more interesting? Why?

Distinguish between output and input standards.

Explain the concept of market, clan, and self-control within organizations.

Understand project management fundamentals and tools such as CPM/PERT and Gantt charts.

Recognize management by exception and its application.

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Definitions:

TC

Total Costs, the sum of all costs incurred in the production of goods or services.

TR

Total Revenue; the total receipts from sales of goods or services provided by a company before any deductions are made.

TVC

Total Variable Cost; the total of all costs that vary with the level of output produced by a company.

Economic Loss

A monetary reduction in income, net worth, or value of assets beyond normal expectations, often as a result of business activities or economic policies.