See Guidelines and Rubric for Instructions, Project Scenario also attached
ACC 411 Milestone One Guidelines and Rubric ACC 411 Milestone One Guidelines and Rubric Overview: Internal control is a process designed to provide reasonable assurance of the achievement of objectives relating to operations, reporting, and compliance during an audit of internal controls. Auditors are chiefly concerned with those controls that impact financial statements and cause a risk of material misstatement. Prompt: For this first milestone, you will begin creating your audit plan for Robbins Network Services (RNS), the company in your final project scenario. You will analyze RNS’s business environment, including the standard business transactions performed by the company, business risks, impact of current events, and potential ethical issues, and determine the types of internal control that may be needed. Specifically, the following critical elements must be addressed: I. In a concise memo, evaluate the internal controls of RNS. A. Describe the major financial business transactions of the company. Include appropriate research to support your answer. B. Evaluate the highest business risks associated with this company. What makes you believe these specifically are the highest risks? Provide appropriate research or data to support your reasoning. C. What would you suggest are the appropriate types of internal controls for this industry? Why? D. Describe ethical issues involved with this company and industry that would have a direct effect on the outcome of a financial audit. How could these issues be addressed? E. Analyze current events for their impact on this company’s risk and internal control in the future. Include documentation of these current events. Rubric Guidelines for Submission: The memo should follow these formatting guidelines: approximately 2–3 pages, double spaced, with 12-point Times New Roman font, one-inch margins, and citations in APA style. Be sure to make revisions to your final project based on the feedback you receive from your instructor on this milestone. Critical Elements Exemplary (100%) Proficient (85%) Needs Improvement (55%) Not Evident (0%) Value Internal Controls: Transactions Meets “Proficient” criteria and demonstrates a nuanced understanding of the major financial business transactions of the company Describes the major financial business transactions of the company and effectively supports them with research Describes the major financial business transactions of the company, but does not effectively support the description with research or the description is inaccurate, illogical, or unclear Does not describe the major business financial transactions of the company and support the description with research 18 Critical Elements Exemplary (100%) Proficient (85%) Needs Improvement (55%) Not Evident (0%) Value Internal Controls: Risks Meets “Proficient” criteria and demonstrates keen ability to use research in support of a choice of risk Evaluates the highest business risk for the company, provides an appropriate rationale for the choice, and supports the choice with data or research Evaluates the highest business risk for the company, but response lacks a rationale explaining the choice, or supporting research or data or the rationale provided is illogical, unclear, or incomplete Does not evaluate the highest business risk 18 Internal Controls: Controls Meets “Proficient” criteria, and suggestion demonstrates a nuanced understanding of internal control and the company environment Provides an appropriate suggestion for the types internal controls for the company and explains the reasons for the suggestion Provides a suggestion for the types internal controls for the company but does not explain the reason for the suggestion, or the suggestions or the explanations are inappropriate, illogical, unclear, or incomplete Does not provide a suggestion of types of internal controls for the company 18 Internal Controls: Ethical Issues Meets “Proficient” criteria and demonstrates a keen understanding of the impact of ethical issues on the outcome of audit Analyzes the ethical issues that would have a direct impact on the outcome of a financial audit and provides appropriate suggestions for addressing them Describes ethical issues that would have direct effect on the outcome of a financial audit but does not provide suggestions for addressing them, or the issues or suggestions are inappropriate, illogical, unclear, or incomplete Does not analyze the ethical issues that have a direct effect on the outcome of a financial audit 18 Internal Controls: Events Meets “Proficient” criteria, and analysis demonstrates a keen understanding of the impact of current events of the company’s future risks and internal control Analyzes current events for their impact on the company’s risks and internal control in the future and provides documentation of current events Analyzes current events but does not discuss their impact on the company’s risk or internal control in the future or does not provide documentation of current events, or the analysis is illogical, unclear, or incomplete Does not analyze current events for their future impact the company’s risk or internal controls in the future 18 Articulation of Response Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy to read format Submission has no major errors related to citations, grammar, spelling, syntax, or organization Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 10 Total 100% ACC 411 Milestone One Guidelines and Rubric Rubric ACC 411 Final Project Scenario Assume you are an auditor at an accounting firm. Your team is getting ready to start a financial audit of Robbins Network Solutions (RNS). You will start with the initial review and audit preparation. You know the following information about RNS. Objectives of the Engagement Audit of the financial statements for the year ended December 31, 2017. Business and Industry Conditions RNS sells and installs computers and networking hardware and software, and provides information technology consulting to businesses. It is currently developing its own computer networking software to sell to customers. RNS’s success depends on attracting and retaining personnel with a high level of technical expertise who are able to provide a broad range of services. The market for staff is highly competitive. The market for computers and networking products is extremely competitive. RNS’s main competitors are companies like Dell, Hewlett Packard, and Apple. RNS also competes with local and regional resellers that provide similar products and consulting services directly to customers. To be competitive, RNS has relied on its ability to provide its customers with state-of-the-art products in a timely manner. Because the company does not have the buying power of some of its competitors, it generally must charge a higher price for its products, but it is also able to provide a higher level of service and expertise to its customers to compensate for the higher price. The market for computer products and technology services is sensitive to economic conditions. Economic indicators predict the U.S. economy will be relatively stagnant for the next few years, with the annual growth in spending for information technology products and services expected to be 1 percent per year for the next three years. In the past year, RNS has decided to increase sales by relaxing credit rules to provide credit to customers with slightly higher credit risk. Ownership and Management RNS is a closely held company owned by six stockholders. Two stockholders are active members of the company’s board of directors. None of the other owners take an active part in the management of the business. Objectives, Strategies, and Business Risks RNS’s primary business objectives are to increase sales, services, and consulting revenues by five percent and increase net income by seven percent each year for the next three years. Strategies to achieve those objectives include: New software development Aggressive marketing of products and services through increased advertising Sales to customers with a higher credit risk profile The primary business risks associated with the company’s strategies include the following: The U.S. economy may suffer a significant downturn. Competitors may engage in predatory pricing to gain market share. Increased advertising expenditures may not produce desired results. Credit losses may exceed the benefits of increased sales. Software development activities may not generate viable products. The company has developed the following responses to these risks: Frequent monitoring of economy and industry conditions Monitoring of competitor actions Hiring of a marketing consulting firm to evaluate the performance of advertising methods Daily review of aging of accounts receivable Adherence to a controlled software development budget Measurement and Review of Financial Performance Management uses the following measures to monitor the company’s performance: