This website uses cookies to ensure you have the best experience. Learn more

Evaluation Of Internal Control Environment Essay

8902 words - 36 pages

Audit Firm



Materiality and Audit Risk
Corporate Governance

CLO2 | LD2/P3

Instruction: Please answer ALL questions.

| Part 1


Learning Objectives
After completing and discussing this case, you should be able to:
1. Understand the types of information relevant to evaluating a prospective audit client
2. List some of the steps an auditor should take in deciding whether to accept a prospective client
3. Identify and evaluate factors important in the decision to accept or reject a prospective ...view middle of the document...

The company’s annual financial statements have been
audited each of the past 10 years in order to comply with debt agreements and
to receive favourable profit rates on the company's existing line of credit.
Since the company's 31 December financial year-end has already passed, time




is of the essence for the company to contract with a new auditor to get the
audit under way.
The firm partner is interested with the idea of having a client in the
textile industry, especially one with the favourable market position and
growth potential of Unggul Holdings Berhad. Although there are several
textile company in the industry, your accounting firm has never had a client
in the textile industry. Most of current audit clients are in the hospitality
services industry. Thus, the partner feels the engagement presents an
excellent opportunity for the accounting firm to enter a new market. On the
other hand, knowing the risks involved, the partner, wants to make sure the
client acceptance decision is carefully considered.
Unggul Holdings Berhad is as medium –sized textile company. Although the
shares are not publicly traded, the company is planning an IPO in the next 5
years in hopes that they will be able to trade the shares on Main Market
Bursa Malaysia. Your team has been assigned to gather information in order to
make a recommendation on whether your firm should accept Unggul Holdings
Berhad as a client.
The company wants to hire your firm to issue an opinion on their December 31,
2015, financial statements. At the same time, the CEO has expressed interest
in obtaining help in getting their recently installed information technology
(IT) system in better shape. They also want your firm's advice and guidance
on getting everything in order for the upcoming IPO. During the initial
meeting with company's management, the following information was obtained
about the industry and the company.
The Malaysian Textile Industry Trend and Development
The domestic retail textile market continues to excite. That there is still
considerable optimism surrounding the industry has been evidenced by
continued investments in shopping malls and retail outlets. Regularly, there
arises a consistent stream of events or media announcements that tout of
developments in the sector. New malls to be built or are opening, existing
malls upgraded or will have extensions added to them, prime retail lots
getting scarcer while their rental rates soar, more labels and brands making
their entry; all these developments, committed to way before the launch of
the recently launched Economic Transformation Programme (ETP), can only mean
that the retail sector is still a very vibrant sector.
However this vibrancy and promise are not without attendant challenges.
Competition for resources needed to fuel the sector has pushed costs up, and

Other Papers Like Evaluation Of Internal Control Environment

Bs 2013 Unit Description Essay

862 words - 4 pages environment and the need to plan organizational strategies to ensure effective business performance. Summary of learning outcomes To achieve this unit a you must: 1 Analyze how the business environment is considered in strategy formulation 2 Understand the process of strategic planning 3 Examine approaches to strategy evaluation and selection 4 Analyze how strategy implementation is realized. Content 1 Strategy formulation Strategic

Team Written Hr Plan: Gdf Suez

4735 words - 19 pages creates a positive working environment which would help the company better focus on eliminating external threats and capitalizing on opportunities. Another problem that our company encounters with respect to the evaluation process is the one in which the evaluator is a relative of the one evaluated. In many of those cases the evaluation is very subjective and it affects the working environment. That is why we think that before starting the

Prison Environment

330 words - 2 pages walls which then escalate violence. When working with criminals on an ongoing basis it may cause corruption to occur with inmates within the institution, allowing drugs and weapons into the facility can degrade performance. The internal environment of a prisons primary influence towards management and custody include the following: the inmate social culture, the prisons physical environment, and prison staff culture. The external environment

A Report Of Environmental Cost On High-Speed Railway

1694 words - 7 pages damage made in high-speed rail construction and operation process. This cost can be called internal environmental costs. Internal environmental costs have a feature that it has been measured and should be paid by the enterprise. (2)External environment cost: during the process of building high-speed rail, there some loss caused by the construction of high-speed rail, but not yet clearly measured. That part of the loss caused by enterprises, but not

Characteristics Of Research

979 words - 4 pages researcher manipulates the environment. Non-obtrusive research - where researcher avoids influencing subjects in any way and tries to be as inconspicuous as possible. 2 Four Main Types of Research Historical research - describes what was-mostly nonobtrusive Descriptive research - describes what is-mostly nonobtrusive Correlation research - makes comparisons, looking for trends or tendencies Experimental research - describes what will be

Impact Of Internal Audit On Risk Management

2567 words - 11 pages , which is why that function has been established in some public as well as private companies. These companies setup audit functions to deal with the assessment of control, good governance and risk management. Managing risk is actually managing the organization in planning, organizing, directing, and controlling the organization‟s systems and resources to achieve objectives. 2.0 BACKGROUND The evolution of the internal audit function, the role of

Internal Controls

503 words - 3 pages Internal control is the process designed to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. Safeguarding assets against theft and unauthorized use, acquisition, or disposal is also part of internal control. Control environment. The management style and the expectations of upper-level managers, particularly their control policies, determine the control environment

Student Org Audit Guide Outline

2489 words - 10 pages , financial policies, and controls for the purpose of arriving at an objective conclusion regarding their accuracy, completeness, and reliability. This is called the external audit. Both the internal control and the external audit comprise the audit environment. There are five key players in an organization’s audit environment: the President, the Treasurer, the Finance Officer, the Internal Auditor, and the External Auditor. Each of them has

Internal Audit Role

2896 words - 12 pages should promote independence, objectivity, consistency and business understanding. The key role of internal audit is to assist the board and/or its audit committee in discharging its governance responsibilities by delivering: s An objective evaluation of the existing risk and internal control framework. s Systematic analysis of business processes and associated controls. s Reviews of the existence and value of assets. s A source of information on

Reflective Review

6167 words - 25 pages control of the situation: I was worried that by passing on the critical feedback I might open up a ‘can of worms’ leading to internal conflict with negative consequences for the organization. Worse still, if relationships in the organization deteriorated it would be my fault! My colleague also helped me to see that my own discomfort in facing this potential conflict was a reflection of the discomfort that was held by many in the organization. I

Assignment Of Od

961 words - 4 pages                          | | Question 28:- Which of the following is/are true about strategic interventions? | | | | a)   link internal functioning with the larger environment                         | | b)   among the newest additions to organization development                         | | c)   focus on strategic choices to gain competitive advantage                         | | d)   all of the above

Related Essays

The Constancy Of The Internal Environment

1535 words - 7 pages of the biological science and the physico-chemical science. The control of the milieu Int´erieur means that the individual molecules do not do anything different from that of the non living systems, but rather they behave in a controlled way which helps in maintaining the constancy of the internal environment (Bernard, 1865). Biological functionality is multilevel Claude Bernard’s idea of the constancy of the internal environment suggests that

Swot Analysis

1503 words - 7 pages provides a logical framework for assessing and understanding the firm’s internal environment. It also provides a comprehensive evaluation of the internal environment’s potential strengths and weaknesses and matches them against the threats and opportunities posed by the external environment in which the firm operates. The best decision of a strategy is one that maximizes the firm’s internal strengths and opportunities and minimizes its weaknesses and

Acc 544 (Internal Control Systems )Complete Class Week 1 5 Includes All Dqs, Individual And Team Assignments

465 words - 2 pages the portfolio approach is an effective tool in managing risk. How does insurance manage risk? Explain your answer. ACC 544 Week 3 Individual Assignment Checklist for Evaluating Internal Controls * Prepare a comprehensive checklist for evaluating internal controls. * Apply the checklist to outline phases of the control evaluation. Discussion Questions What are some major components of an internal control system? Are these

Director Essay

301 words - 2 pages unions? 10. Is the evaluation and control process appropriate for a corporation that emphasizes on creativity? Are control and creativity compatible? Elaborate Part Two: How can the corporate culture be changed? Present your answer in the format of a plan emphasizing on the following points: 1. Actions 2. Responsibilities 3. Time frame 4. Budget Upon the execution of the plan, what are the expected success criteria that you will use in measuring and evaluating your plan? Explain each criterion in detail Good Luck PDF to Word[->0] [->0] -