ACT450 Auditing Week 6

This professor is very tough in grading, and I need this by this Saturday. Either option works, but option 2 also requires excel document. Other Requirements from the first 5 weeks of feedback:

APA 7th Edition – All authors need to be listed the first time, then et al can be used.

Error free grammar/mechanical paper

AS # (Auditing Standard # from PCAOB site must be correctly sited and title noted when applicable)

It says 2 minimum sources, but she wants more than 2 peer reviewed articles within last 5 years & available on web.

Try not to rely too much on one source in one paragraph. I you have four sentences in a paragraph and three of them are directly cited from that source, that’s too much reliance on one source, so consider adding your analysis or your verbiage to it. This will also help you reduce Turnitin similarity score, and not run into risk of plagiarizing.

All tables should be added following APA format – number for your table, title, and standard APA formatting. I have taken couple points off for just copying & pasting from excel without following APA format.

Good concluding paragraph is a must.

Please include if OPTION 2 chosen.

Option #1: Internal Controls over Cash

The following are deficiencies in internal controls over cash.

1. When the cashier isn’t available, Sally prepares both the deposit and opens the mail.
2. The mail clerk may not prepare a remittance advice for the A/R department if a customer does not submit a one with a payment.
3. Sometimes, the treasurer’s department does not stop the supporting documents for cash disbursements.
4. Ben handles both the customer correspondence concerning monthly statements and making the bank deposits.
5. Sam handles incoming mail and also prepares bank reconciliations; however, the bank reconciliations are not done in a timely manner.

For each deficiency:

• Determine what applicable audit procedure(s) should be conducted to identify whether any material misstatements exist
• Explain why you think this procedure is best for this situation.

Consider each deficiency independently of the others. While each deficiency presents potential issues, identify two that stand out as the worse with your professional knowledge. Explain your rationale. Also, how would you implement a change to improve those deficiencies?

Your written response paper should be 3-4 pages in length. Please type your response in a Word document and follow APA format, according to CSU-Global Guide to Writing and APA (Links to an external site.). Include a title page and reference page. Use two (2) outside academic sources other than the textbook, course materials, or other information provided as part of the course materials.

Option #2: Fraud in the Bank Reconciliation

Poor internal control over its cash transactions are becoming a problem for the Hogan Company. The following are facts about its cash position on October 31:

• The company’s books showed a balance of $19,004.62, which included undeposited receipts.
• A credit of $200 on the bank statement is not included in the company’s books.

The bank statement’s balance was $15,650.

• Outstanding checks were:

The only deposit was for $3,797.41 on November 7. The cashier personally handles all incoming cash and bank deposits. He is responsible for reconciling the monthly bank statement as well. The November 30 reconciliation:

Balance per books, October 31: $19,004.62

Add: Outstanding Checks

Requirements:

You’re suspicious that the cashier may have pocketed some money and suspect that some of the un-deposited receipts of $3,797.41 may have been taken. Create a schedule presenting your estimate of the loss.

1. How did the cashier endeavor to conceal the robbery?
2. Based on the scenario alone, name two specific components of internal control that were seemingly missing.
3. If the cashier’s September 30 reconciliation is known to be accurate and you start your audit on November 10, what specific substantive audit procedures would help you detect the missing money?

Your written response paper should be 3-4 pages in length. Please type your response in a Word document and follow APA format, according to CSU-Global Guide to Writing and APA (Links to an external site.). Include a title page and reference page. Use two (2) outside academic sources other than the textbook, course materials, or other information provided as part of the course materials.