Accounting Homework



Accounting Homework

Problems 14-5: Compliance testing and Auditor Ingenuity

1. Strategy to test compliance with the eligibility provision

Thornburg School District receives substantial financial support from State Education Agency. An audit firm is responsible to keep check and balance of the aid received i.e. verifying that recipients complied with the provisions of all financial awards.

Thornburg School District received $3 million to provide free hot lunches to elementary school children of low-income families. In order to determine eligibility, audit strategy will recommend which is based on the limited information.

The best strategy that fits here is sampling method i.e. the method in which reasonable people will be selected within the population of the school. This is usually used when there is limited information of the amount that has been awarded.

There sample can be interviewed and observed while they are giving answer in order to see whether they are getting free hot lunches at elementary school children of low-income families. It is important to get a better understanding of the needs and requests from the client and how best to meet those needs. Senior staff can be involved in the project (including partner and senior manager or manager) must ensure the most effective implementation of this task by conducting interviews with employees of the client (in person with them or by using automated tools to assess the needs of the client).

They also need to involve the implementation of the first phase of the audit of the staff (from the departments of taxation, auditing and management consulting), according to their previous experience of working with clients and skills to provide customer service based on their needs and requirements. To get a clearer view of the customer and its activities, each team member after the project should provide the relevant information (www.giz.de).

2. Weakness in Internal Controls

Considering that the audit being conducted under the federal Single Audit Act and adhering the reporting requirements. It was discovered that 25 students out of 350 in the program failed to meet the eligibility requirements which was due to indicative of a weakness in internal controls. This would have affected on report on the program in the following ways:

Financial Reporting Reliability

Operations Efficiency & Effectiveness

Problem in compliance with respect to appropriate regulations & laws.

The reality and validity of business transactions;

Complete reflection in the accounting documents of business transactions that occurred at the time of checking account;

Correct valuation of fixed and current assets and their classification;

Compliance with the periodicity of the business operations;

The accounting results on summary documents and transferring them to the user registers (www.giz.de).

Problems 14-7: Performance and Audit

In order to determine the department performance, auditors needs the following things:

Analysis of the information of the entity. Need to summarize the data obtained from the study of the documentation of each of the units and uses this information to determine in more detail verifiable requirements and the composition of the staff of each of the units, which must be held IFS audit ...