Implement and maintain internal control procedures Assignment
Assessment Task 1: Written Questions
Provide answers to all of the questions below:
1. Describe how the Privacy Act 1988 applies to the handling of files and records.
2. Explain how the Privacy Act 1988 may affect the management of a company's files.
3. Discuss at least two ethical responsibilities of an accountant when preparing financial statements
4. Discuss the ethical implications of finding that a work colleague has been accessing some of your files that they should not have had access to.
5. Explain the role of the Australian Securities & Investments Commission (ASIC) and the legislation that determines its authority and scope?
6. Identify the three pieces of legislation that ASIC is responsible for administering. Explain the purpose of each Act.
7. According to the Corporations Act 2001, what are company directors' four main duties? Briefly explain each.
8. Identify and explain three key features of A New Tax System (GST) Act 1999
9. Explain the effect that the Common Reporting Standard for the Automatic Exchange of Financial Account Information have on foreign tax residents in Australia, and on Australians earning money in other countries.
10. Describe the Global Reporting Initiative (GRI).
11. Explain how an effective internal control structure assists management.
12. Discuss the relationship between corporate governance and internal audit
13. Listfive work practices or routines that are also internal control procedures
14. Describe the accountability mechanisms between the following, and where each mechanism is usually documented within the organisation:
- CEO (or managing director)
- Company directors
- Executive management team
- Shareholders
- Employees.
15. According to the ASX Corporate Governance Principles, after how many years may the CEO take on the role of Chair?
16. Describe the key requirements of an Operational Policies and Procedures Governance Manual (or Charter).
17. Identify and explain the five components of internal control.
18. List and explain the stages of an auditor's evaluation of internal controls.
19. Explain the difference between internal and external audits.
20. Identify and explainthe Seven Internal Control Procedures in Accounting.
Assessment Task 2: Internal control procedures review
Complete the following activities:
1. Write a report on Australian company and its internal control and governance systems.
You can select any Australian Securities Exchange (ASX) listed Australian company. Access the information for review through the organisation's annual reports, website and any other published materials.
Your report should address the following:
- A summary of the company you have selected, including the type of business, industry and background
- A summary of ASX Corporate Governance Council's Corporate Governance Principles and Recommendations and how the company has applied these.
- An explanation of the key features of the company's governance and control system
- Identification of relevant legislative and/or regulatory requirements relevant to internal controls, governance and reporting
- Explanation of why internal control and governance procedures are important for the company's specific business or industry sector
It is important that all external sources used are correctly cited. This means referring to the company being reviewed, as well as providing the appropriate website details or book references.
The report must be written in your own words and style, ensuring that you use appropriate formats. Include any relevant charts, graphs, diagrams etc.
2. Send an email to your assessor.
The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.
It should summarise the contents of the attachments. Attach your report to the email.
Assessment Task 3: Internal control procedures project
Carefully read the following:
You are working as an accountant for a small training organisation called The Train Station. The CEO has approached you with the following issues:
- Several invoices have been received recently that have no prior approval from management for purchase
- One of the staff members was paid at the incorrect pay rate as the payroll officer processed pays based on information the staff member provided rather than the employment contract
- Cash flow and profit and loss reports are not being reviewed regularly
- Staff are unsure who they can seek approval or guidance from, as there is not a clearly delegated role
The CEO has decided to appoint a Chief Financial Officer (CFO), who will have high level approval responsibilities and assist to control business operations. The CFO will now become the delegated person responsible for all financial purchases, queries and monitoring.
The CEO has requested that you help to resolve the above issues by developing new Control Procedures that address the issues. You are also asked to write several reports that will be used in the development and implementation of the new procedures.
Complete the following activities:
1. Develop a list of tasks that a newly appointed CFO would be responsible for, including relevant reports they will access and review and the schedule for when this would occur.
2. Develop two internal control procedures to resolve the issues regarding unapproved purchases and payroll processing.
Undertake research to find any similar processes used by other companies. Review these to ensure that your process is in line with other recognised practices.
3. Write a report for your CEO.
You will now write a plan for the procedures' implementation.
The report should include the following:
- Who the relevant stakeholders are
- How you will arrange consultation with the stakeholders
- Proposed timeframes for the proposed implementation
- Three performance indicators that will be used to evaluate future compliance to each procedure
- A timetable for to review the ongoing success of the procedures.
4. Write an internal Management Report.
When the procedures have been finalised after discussion with your CEO, the company's management will be informed by way of a written report.
The report should include all relevant information, including:
- What the issues were and what the causes of those are.
- Your review of any similar processes used by other companies
- Supporting research from relevant sources in order to support the application of this process
- Where procedural information can be accessed
- Implementation and review timetables
- The people responsible for certain areas of implementation
- Why the changes are being implemented
- Three performance indicators that will be used to evaluate future compliance to each procedure
- How the ongoing success of the procedures will be assessed.
It is important that you reference the sources of your information. For instance, if you have found an internal control procedure that seems to be appropriate to the case study, and has worked for another company, cite the company and the effect that the procedure has had on its bottom line, as well as how it is relevant to the case study.
5. Email your CEO (your assessor) to arrange a meeting.
The text of the email should be in correct English, and use an appropriate tone (polite and deferential) while requesting a time and date that you can meet.
The email text should also give a summary of the contents of the email's attachment.
Create a Word document that contains the questions and your answers to activities 1, 2, 3, and 4, namely:
- List of CFO tasks
- Two internal control procedures
- Stakeholder consultation report
- Internal management report
6. Meet with your CEO.
You must now meet with your CEO (played by your assessor) and discuss the steps you have taken to date, and seek approval to proceed with implementation.
During the meeting you must demonstrate an understanding of:
- why the control procedures are required
- how the procedures will reduce company risk and better control the finances
- how the timetables for implementation will be managed to maximise benefits for all parties
During the meeting, you are required to demonstrate effective interpersonal and communication skills including:
- Speaking clearly and concisely
- Using effective non-verbal communication skills to encourage audience interest
- Responding to questions
- Asking questions to seek feedback
- Use of active listening techniques to confirm and clarify understanding.
- Use of appropriate language and concepts in order to liaise with others appropriately.
7. Send an email to the CEO (your assessor).
Make the amendments to the Control Procedures and the timetables that were suggested by your CEO at the meeting that will facilitate compliance with the Control Procedures.
The text of the email should summarise the meeting and the conclusions reached. It should also summarise the content of the email attachment.
The email text should also ask for the CEO's approval of the project, giving you permission to proceed.
Attach your amended Control Procedures and Management Report to the email.
Assessment Task 4: Internal control procedures evaluation project
Carefully read the following:
Garden Worx Pty Ltd is a company specialising in providing a wide range of garden products. It has six stores across Australia.
The company includes the CEO with a senior management team consisting of a Marketing Manager, Finance Manager and Operations Manager. The Marketing Manager is responsible for the four customer service staff located at head office. The Finance Manager is responsible for the Purchasing Officer and Administration Officer. The Operations Manager is responsible for the six store managers and retail staff.
The Finance Manager has overall responsibility for all financial decisions. The purchasing officer is responsible for all purchasing orders, although purchase orders are to be signed off by the CEO. The purchasing officer is new to the company having been employed since March. The company does not have a strong training or induction ethic.
Assume the following performance indicators are in place for purchasing:
- All purchases over $500 approved by the Finance Manager or CEO.
- All purchases over $500 supported by a Purchase Order signed by the purchasing officer based on approval from Finance Manager.
- All invoices from suppliers include purchase order number.
Review the following information from a recent audit of purchasing orders by the purchasing officer to assess whether the above performance indicators have been met.
- 40 purchase orders were reviewed from the period March to June 2017. A total of 80 purchase orders were issued during that time.
- 10 purchase orders were not signed by the purchasing officer.
- Purchase Order #670 was for $640. Approved by purchasing officer. Note says CEO was unavailable.
- Purchase Order #450 was for $920. Approved by purchasing officer. Note says CEO was unavailable.
- 40 invoices from suppliers were reviewed from the period March to June 2017. A total of 80 invoices were received during that time.
- Invoice 96 issued by Spades Pty Ltd on April 2 2017 did not include Purchase Order Number. Invoiced paid by purchasing officer on April 5 2017.
- Invoice 106 issued by Soils Pty Ltd on May 5 2017 did not include Purchase Order Number. Invoiced paid by purchasing officer on May 9 2017.
1. Internal controls evaluation report
This assessment tasks requires you to write a short report (approximately 1 page) addressing the following:
- Introduction - the purpose of the purchasing audit and the criteria against which the purchasing audit was evaluated.
- Findings - assessment of whether performance indicators met.
- Recommendations - recommendations for action.
2. Implement recommendations
Assume that your recommendations have been accepted. In order to implement procedures, send an email to the all staff advising of the new procedures/checks.
The text of the email should summarise the conclusions reached and changes to be made.
Attachment:- Assignment File.rar