ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2

OVERVIEW:
This assignment provides an opportunity for you to consider the meaning and operation of internal control by reflecting on the design,
implementation and effectiveness of internal control plans in a business process.
The specific skills addressed include:

Reading and analysing system documentation

Completing an internal control analysis for a business process

Evaluating the likely attainment of information reliability goals

Evaluating the appropriateness and potential use of control plans within the process.

GROUP SIZE:
The assignment is a group assignment. Assignments are to be completed in groups of four or five. You may work with any student enrolled in
the subject.
GENERIC SKILLS ADDRESSED:
This assignment addresses the following generic skills: collaborative learning; problem solving; team work; interpretation and analysis; critical
thinking; evaluation of data and other information; use of computer software; written communication; application of theory to practice.
PLAGIARISM: You are cautioned against copying and relying on the work of others. Copying the work of others is plagiarism and as such
carries severe penalties.
WEIGHTING: 15% of the overall subject result

ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2

DUE DATE: 11pm on Monday 6 October 2014

SUBMISSION:
Assignments must be submitted electronically via the LMS link to the assignment tool. Please complete the cover sheet which follows and
include it as your first page of the assignment. Your answer must be typed, double-spaced, 12 point font and be a maximum of 1500 words
(excluding the reference list). Only one file per assignment per group is to be submitted. You must submit your assignment as a pdf file.
Please check that your .pdf file is legible and correct before submitting.

ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2

Task:
A flowchart for a business process follows this page. You are required to (1) analyse the process and complete the attached control
framework, and (2) answer the question that follows the control framework. All answers should be based around the process that is
depicted in the flowchart provided.
(1) CONTROL ANALYSIS FRAMEWORK
You are required to complete the four stages of the Control Analysis Framework.

Follow the instructions contained within each stage when completing the control framework.

(2) WRITTEN QUESTIONS

One short answer question is provided. Your group is to prepare an answer for this question. The answer for this question should NOT
exceed 500 words.

MARK ALLOCATION:
Question 1 (PARTS A-D): 25 marks
Question 2:
TOTAL:

5 marks
30 marks (converted to a score out of 15 for assessment)

ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2

Word Limit: 1400-1500 WORDS (excluding in-text references and reference list). Note: a 10% leeway is built into the word limit range above.
Your assignment cannot exceed 1500 words.
Where appropriate, references should be used to substantiate your discussion. Use either the Harvard or APA referencing systems. More
information is available from the Centre for Teaching and Learning: http://fbe.unimelb.edu.au/celt/tools/helpsheets

ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2

GROUP LEADER
Student Number
Student First Name
Student Last Name

Tutors Name
Tutorial Day
Tutorial Time
OTHER GROUP MEMBERS:
Student Number
Student First Name
Student Last Name

Tutors Name
Tutorial Day
Tutorial Time

Student Number

ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2

Student First Name

Student Last Name

Tutors Name
Tutorial Day
Tutorial Time

Student Number

575948

Student First Name

Anna

Student Last Name

Nguyen

Tutors Name

Alec Baenziger

Tutorial Day

Monday

Tutorial Time

4.15pm

Word count (excluding

reference list, must not exceed
1500 words)

By submitting this assignment you are agreeing to the following statement

ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2
We confirm that the work is solely our own and we have not copied or used the work of any other source unless referenced. The
word count above is accurate.

ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2

M1

M2

M3

ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2

0. (a) Complete the following table:

4 MARKS

ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2

(b) For the process documented in the flowchart:

b. Identify ONE (1) risk for which there is a MISSING control plan for each of the information reliability goals;
b. Specify the financial statement accounts impacted from this risk;
b. Specify whether the account would be over or understated as a result of the risk.

3 MARKS

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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2
(c)
(i) For each risk you identified in part b, recommend the best control plan that is currently missing that could be implemented to
mitigate the risk, and complete the tables that follow. You must provide a detailed explanation of how the plan works and how it will
address the information goals.
YOU CANNOT USE BATCH TOTALS AS A CONTROL PLAN FOR THIS SECTION OF THE ANALYSIS
(ii) Annotate the flowchart provided to indicate where each suggested control plan should be included in the process in order to
mitigate the risk.

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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2

9 MARKS
(b) For the process documented in the flowchart:
a. Identify ONE (1) risk for which there is a MISSING control plan for each of the information reliability goals;
b. Specify the financial statement accounts impacted from this risk;
c. Specify whether the account would be over or understated as a result of the risk.
Risk to Information Reliability

Information Reliability Goal/s

Potentially Threatened

Financial statement account/s

impacted

Impact on financial statement account

(over or understated)

1. Theft

VALIDITY

Unearned Revenue

Overstated

2. Data entry error

ACCURACY/COMPLETENESS
DETAILED LEVEL

Unearned Revenue

Over or understated depending on

the direction of error

Unearned Revenue

Understated

3. Failure to update the card balance COMPLETENESS EVENT LEVEL

3 MARKS

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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2
(c)

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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2
(i) For each risk you identified in part b, recommend the best control plan that is currently missing that could be implemented to

14

ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2

M1

M2

M3

mitigate the risk, and complete the tables that follow. You must provide a detailed explanation of how the plan works and how it will
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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2
address the information goals.
YOU CANNOT USE BATCH TOTALS AS A CONTROL PLAN FOR THIS SECTION OF THE ANALYSIS
(ii) Annotate the flowchart provided to indicate where each suggested control plan should be included in the process in order to
mitigate the risk.

Information Reliability Goals

Completeness

Control Activity
Validity

Accuracy

Event
Level

Detail
Level

Risk 1: Theft
Control Plan: Deposit slip authorised by two supervisors

M1

M1

M1

Explanation of how plan works and achieves the information reliability goals:
After the supervisor prepares the deposit slip, another person of authority checks that amount to be deposited into the bank accurately
matches the amount recorded in the daily cash report. Once the second person of authority confirms that amount is corresponds, he/she will
sign the deposit slip as well. This preventative control reduces the possibility of cash being stolen and ensures that the the amount of cash
recorded deposited into the bank equals the displayed by the valid daily cash report. The primary goal of this plan is to ensure that all
transactions that are recorded are also receipted by the bank so that validity is achieved. The control plan also ensures that the deposit slip
has been correctly filled in and hence allowing accuracy and completeness at the detail level to be achieved.

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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2

Information Reliability Goals

Completeness

Control Activity
Validity

Accuracy

Event
Level

Detail
Level

Risk 2: Error in recording amount received from customer/data entry

M2

Control Plan 2: Redundant data check

Explanation of how plan works and achieves the information reliability goals:

The customer service representative enters the cash amount received twice and then the computer checks that two sets of inputs are identical and only
when the two sets of inputs are identically that the customer service representative can proceed to next step of the transaction. This amount is then
reiterated to the customer to confirm that the amount keyed in is accurately reflects the cash given by the customer. This control plan ensures that incorrect
data entry is detected in time and correction measures can be put in place to so that the correct amount is registered in the system. This is done before cash
is stored into cash register so that if customer claims that amount is incorrect, this can be confirmed by recounting the amount of cash given.

Information Reliability Goals

Completeness

Control Activity
Validity

Accuracy

Event
Level

Detail
Level

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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2
Risk 3: Failure to update the card balance
Control Plan: Interactive feedback check

M3

M3

Explanation of how plan works and achieves the information reliability goals:
After the card balance has successfully been updated, the computer displays the new account balance and the customer service
representative confirms this with the customer. This ensures completeness in the event level is achieved level as it notifies when the event
has successfully been captured into the system. It also allows the confirmation that the correct amount of cash has been keyed into the
system and hence ensuring the accuracy is achieved. If the new card balance is identified to be incorrect, corrective measures can be put in
place in a timely manner such as reprocessing the entire transaction so that the correct amount of the transaction is captured in the
systems records. The primary goal of this control plan is to ensure that all valid transactions are recorded into the system so that
completeness at the event level is achieved.

9 MARKS
d)
(i) Conclude the extent to which the process as it currently operates achieves each of the information reliability goals. Justify your
conclusion using present and missing control plans. Your answer should refer to more control plans than the three in your answer to
part c, above.
(ii) Annotate the flowchart to indicate where the present control plans that you mention in your evaluation are in the process (P-X);
and annotate where the missing control plans that you mention in your evaluation should be (M-X).

8 MARKS

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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2
Annotations on flowchart 1 MARK

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ACCT 10003 ACCOUNTING PROCESSES AND ANALYSIS

SEMESTER 2, 2014
ASSIGNMENT 2
(0) There has been a suggestion made to management that batch totals could be used in the process. Advise management on how batch
totals could be employed. Specifically:
()

Where in the process batch totals should be used (refer to flow numbers on the flowchart).

()

The type of batch total that should be used and why.

()

Identify and describe the risk and information goal(s) that batch totals would address.

()

Explain how the batch total you suggested addresses the risk and goal in (iii).

(5 MARKS)

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