ACC 552 WORKSHOP 3.7 CASE STUDY
Download Discussion Question 2 From the information provided to this point (including Exhibits 4-3 and 4-4), what answers can be given to Cline’s questions? Mention the strengths as well as any weaknesses that have been found that will have a bearing on the auditor’s assessment of control risk.
a. Has Lakeside established the proper environment for strong internal control? Is management aware of the importance of internal control? Does management work to ensure that internal control is constantly functioning in an appropriate fashion? b. Has the company established control activities, policies, and procedures such as the use of adequate documents? Do transactions have to be authorized? Are duties properly segregated to prevent irregularities? c. Are the company’s information and communication systems appropriately designed in order to allow for the proper identification, capture, and exchange of information in a form and time frame that enable people to carry out their responsibilities? Discussion Question 3 After a preliminary assessment has been made of Lakeside’s control risk, what possible actions can be taken by the auditors? Case 4 - Exercise 4-2 (a)