Problem - AVF Inc. manufactures several lines of packaging equipment. The company considers product reliability and outstanding customer service to be critical to its success. The customer service department is responsible for:
- Providing prospective customers with product information
- Monitoring spare parts availability
- Providing equipment operating and maintenance information to customers
- Developing and delivering customer training courses
- Responding to customer complaints and making service calls
- Handling customer warranty claims
- Maintaining good customer relations
The company recently made a sizable investment to upgrade its customer service department computer system. The upgrade is expected to improve operational efficiency and customer satisfaction. The outputs of the new system include management reports used to monitor performance in the areas listed above. The audit committee has asked the internal audit function to perform an audit of the operational effectiveness and efficiency of the customer service department that covers the following areas:
- Adequacy of management reports
- Compliance with company policies, laws and regulations
- Customer wait time to get a spare part
- Security of the spare parts inventory
- Valuation of the spare parts inventory
- Number of customer inquiries which turn into orders
Briefly discuss why each of the six areas specified by the audit committee may or may not be appropriate for this assurance engagement. In addition identify three other areas which would warrant inclusion in this audit.