ACCOUNTING-ACC 640 Final Project Guidelines and Rubric Overview

ACC 640 Final Project Guidelines and RubricOverviewThe final project for this course is the creation of an audit report with memos.Auditing is a valuable skill in accounting and business, as the odds are very high that you or your organization will be subject to a compliance, federal, IRS,internal, government, or revenue audit at one point in your career. Accountants are required to make professional judgments on both the financial accountingissues and internal accounting forecasts within their organization. The auditor must provide fair, unbiased, materially correct information for investors,employers, employees, and independent stakeholders. This course will help you navigate the relevant processes to provide that unbiased, accurate information.The purpose of the assessment is to familiarize you with the process of auditing and what to do with the auditing information once you have it. You will explorehow to plan audit work, analyze financial statements, perform tests on that information, and properly and professionally communicate the results of an audit.The project is divided into three milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality finalsubmissions. These milestones will be submitted in Modules Three, Five, and Seven. The final submission will be due in Module Nine.In this assignment, you will demonstrate your mastery of the following course outcomes:Determine risk factors for organizations based on analysis of audit risk, audit evidence, and financial statement assertionsDevelop strategies to mitigate potential risk factors using organizational internal controlsCreate an audit program to achieve audit objectives related to revenueAnalyze audit reports for appropriately communicating the result of the audit processDevise a sampling program for the audit universe to formulate field activitiesPromptFor this assessment, you should assume you are on the internal audit staff of a publicly traded company. Choose one of the following companies: Walmart,Target, Sears, Kroger, or Amazon. You will be required to obtain the last two years’ worth of financial statements and a recent audit report. The internal auditgroup at the company is tasked with preparing for an upcoming revenue audit and analyzing the business risk internally to mitigate audit findings. You willconduct an internal audit of the company using the information gathered and create a report. Then, you will prepare appropriate memos analyzing the auditreport you have prepared, while offering feedback and recommendations.Specifically, the following critical elements must be addressed:I.Procedures and Field Work: For this part of the assessment, you will begin your audit report using the information you have gathered to address thefollowing elements pertaining to procedures and field work.A. Describe how you would conduct the audit process, incorporating the analytical procedures you would use to investigate selected businesstransactions.1. What steps will you take to review the company’s business transactions?2. What would your plan be to utilize these procedures?B. Explain the appropriate field work needed to review high-risk business transactions for cash and revenue.1. What would you need to do in the field to investigate these?2. Could you convey this information through charts or other supporting documentation?C. Create a test to assess appropriate assertions for designated high-risk business transactions.II.Risk Factors: For this part of the assessment, you will continue your audit report using the information you have gathered to address the followingelements pertaining to risk factors in all the major business transactions.A. Analyze the income statement for any potential risk factors and compliance issues with Generally Accepted Accounting Principles (GAAP) orInternational Financial Recording Standards (IFRS).B. Analyze the risk factors and compliance issues with GAAP or IFRS on the balance sheet.C. Using the internal control, analyze the cash and revenue for potential risk factors.1. What risks need to be documented?2. How does this information compare to the company or industry averages, or the company’s past performance?D. Explain the audit universe and how you identified it.E. Based on your analysis of risk, devise a sampling program for the audit universe.F. Choose the most preferable audit testing procedures that could be used in the field, based on the audit universe items sampled in this situation.III.Memos: For this part of the assessment, you will use your audit report to prepare memos to upper management.A. Prepare a memo to be reviewed by the chief financial officer (CFO) that summarizes the audit process.1. Explain any sampling or other audit work that could be done, and if you would recommend the company pursue this additional work.Justify your response.2. Make recommendations to the CFO on how to mitigate potential risk factors for major business transactions identified in the audit report.B. Assume you are now the CFO. Prepare a memo to the Board of Directors as to what potential issues the external audit team might find and whatthe company’s response should be.1. Evaluate the findings from the audit report. Be sure to view these findings from the CFO’s point of view.2. Develop a strategy to mitigate risks identified in the audit report.3. Describe how the company might implement the strategy based on the findings from the audit report.MilestonesMilestone One: Draft of Procedures and Field Work (Section I)In Module Three, you will submit a draft of the procedures and field work required for conducting your audit process. Describe how you would conduct the auditprocess for the company you have chosen, including the analytical procedures you would use to investigate selected business transactions. Explain theappropriate field work needed to review high-risk business transactions for cash and revenue and create a test to assess appropriate assertions for designatedhigh-risk business transactions. This milestone is graded with the Milestone One Rubric.Milestone Two: Draft of Risk Factors (Section II)In Module Five, you will submit a draft of risk factors as identified for all of the major business transactions conducted by your chosen company. Analyze theincome statement, balance sheet, and cash and revenue for any potential risk factors and compliance issues with Generally Accepted Accounting Principles(GAAP) or International Financial Recording Standards (IFRS). Based on your analysis of risk, devise a statistical and judgmental sampling program for the audituniverse. Recommend the most preferable audit testing procedure based on the audit universe items sampled. This milestone is graded with the Milestone TwoRubric.Milestone Three: Draft of Memos (Section III)In Module Seven, you will submit a draft of your memos to upper management. First, you will prepare a memo to be reviewed by the chief financial officer (CFO)of your chosen company that summarizes the audit process conducted. Then, you will assume the role of CFO of the company and prepare a memo to the Boardof Directors as to what potential issues the external audit team might find and what the company’s response should be. This milestone is graded with theMilestone Three Rubric.Final Submission: Audit Report with MemosIn Module Nine, you will submit your audit report with memos offering feedback and recommendations. It should be a complete, polished artifact containing allof the critical elements of the final project. It should reflect the incorporation of feedback gained throughout the course. This submission is graded with the FinalProject Rubric.DeliverablesMilestoneOneTwoThreeDeliverableDraft of Procedures and Field Work (SectionI)Draft of Risk Factors (Section II)Module DueThreeGradingGraded separately; Milestone One RubricFiveGraded separately; Milestone Two RubricDraft of Memos (Section III)SevenGraded separately; Milestone Three RubricFinal Submission: Audit Report with MemosNineGraded separately; Final project RubricFinal Project RubricGuidelines for Submission: Your audit report with memos must be 8–10 pages in length including report and supporting documents (plus a cover page andreferences). Use double spacing, 12-point Times New Roman font, and one-inch margins.Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information,review these instructions.Critical ElementsProcedures: DescribeExemplaryMeets “Proficient” criteria anddescription demonstrates keeninsight into how to conduct theaudit process while alsoincorporating analyticalprocedures(100%)ProficientDescribes how the audit processwould be conducted,incorporating analyticalprocedures for selectedbusiness transactions(90%)Procedures: ExplainMeets “Proficient” criteria andprovides a flowchart orsupporting documentationdescribing the high-riskbusiness transactions(100%)Explains the appropriate fieldwork needed to review high-riskbusiness transactions for cashand revenue(90%)Procedures: CreateFactors: StatementFactors: SheetCreates a test to assessappropriate assertions fordesignated high-risk businesstransactions(100%)Meets “Proficient” criteria andmakes cogent connections tothe relationship betweenrevenue and accountsreceivable(100%)Meets “Proficient” criteria andprovides keen insight into therisk factors present in thebalance sheet(100%)Analyzes the income statementfor any potential risk factors orcompliance issues with GAAP orIFRS(90%)Analyzes risk factors andcompliance issues with GAAP orIFRS on the balance sheet(90%)Needs ImprovementDescribes how the audit processwould be conductedincorporating analyticalprocedures for selectedbusiness transactions, butdescription is inaccurate or lacksdetail(70%)Explains the appropriate fieldwork needed to review high-riskbusiness transactions for cashand revenue, but explanation iscursory or lacks detail(70%)Creates a test to assessassertions for designated highrisk business transactions, buttest is inaccurate orinappropriate(70%)Analyzes the income statementfor any potential risk factors orcompliance issues with GAAP orIFRS, but analysis lacks depth ordetail(70%)Analyzes risk factors andcompliance issues with GAAP orIFRS the balance sheet, butanalysis lacks depth or detail(70%)Not EvidentDoes not describe the how theaudit process would beconducted incorporatinganalytical procedures forselected business transactions(0%)Value7Does not explain theappropriate field work neededto review high-risk businesstransactions for cash andrevenue(0%)Does not create a test to assessappropriate assertions fordesignated high-risk businesstransactions(0%)7Does not analyze the incomestatement for any potential riskfactors or compliance issueswith GAAP or IFRS(0%)7Does not analyze risk factorsand compliance issues withGAAP or IFRS on the balancesheet(0%)77Factors: ControlMeets “Proficient” criteria andanalysis demonstrates anuanced understanding of howthe internal control is utilized inanalyzing cash and revenue(100%)Analyzes the cash and revenueof the company for potentialrisk factors using the internalcontrol(90%)Factors: ExplainMeets “Proficient” criteria andexplanation shows a nuancedunderstanding of the audituniverse(100%)Explains the audit universe andhow it was identified(90%)Factors: DeviseDevises a sampling program forthe audit universe based on therisk analysis(100%)Factors: ProceduresMeets “Proficient” criteria anddemonstrates keen insight intothe process used to test theitems sampled(100%)Chooses an audit testingprocedure that could be usedand justifies why it would bepreferable for this situation(90%)Memos: ExplainMeets “Proficient” criteria anduses industry-specific languageto establish expertise(100%)Explains any sampling or otheraudit work that could be doneand if the company shouldpursue the additional work(90%)Memos: MakeMeets “Proficient” criteria anduses industry-specific languageto establish expertise(100%)Makes recommendations to theCFO on how to mitigatepotential risk factors for majorbusiness transactions identifiedin the audit report(90%)Analyzes the cash and revenueof the company for potentialrisk factors using the internalcontrol, but analysis lacks depthor does not reference theinternal control(70%)Explains the audit universe andhow it was identified, butexplanation lacks depth ordetail(70%)Devises a sampling program forthe audit universe based on therisk analysis, but thedocumentation of risk lacksdepth or detail(70%)Chooses an audit testingprocedure that could be usedand justifies why it would bepreferable, but justification isinaccurate or inappropriate(70%)Explains any sampling or otheraudit work that could be doneand if the company shouldpursue the additional work butexplanation is inaccurate orinappropriate(70%)Makes recommendations to theCFO on how to mitigatepotential risk factors for majorbusiness transactions identifiedin the audit report, butrecommendations made areinappropriate or lack depth(70%)Does not analyze the cash andrevenue of the company forpotential risk factors using theinternal control(0%)7Does not explain the audituniverse and how it wasidentified(0%)7Does not devise a samplingprogram for the audit universebased on the risk analysis(0%)7Does not choose an audittesting procedure that could beused nor justify why it would bepreferable(0%)7Does not explain any samplingor other audit work that couldbe done and if the companyshould pursue the additionalwork(0%)7Does not makerecommendations to the CFOon how to mitigate potentialrisk factors for major businesstransactions identified in theaudit report(0%)7Memos: EvaluateMeets “Proficient” criteria anduses industry-specific languageto establish expertise(100%)Evaluates the findings from theaudit report from the CFO’spoint of view(90%)Memos: DevelopMeets “Proficient” criteria anduses industry-specific languageto establish expertise(100%)Develops a strategy to mitigaterisks identified in the auditreport(90%)Memos: DescribeMeets “Proficient” criteria anduses industry-specific languageto establish expertise(100%)Describes how the companymight implement the strategybased on the findings from theaudit report(90%)Articulation ofResponseSubmission is free of errorsrelated to citations, grammar,spelling, syntax, andorganization and is presented ina professional and easy-to-readformat(100%)Submission has no major errorsrelated to citations, grammar,spelling, syntax, or organization(90%)Evaluates the findings from theaudit report from the CFO’spoint of view, but evaluationlacks depth or detail(70%)Develops a strategy to mitigaterisks identified in the auditreport, but strategy isinappropriate or lacks depth(70%)Describes how the companymight implement the strategybased on the findings from theaudit report, but descriptionlacks depth or detail(70%)Submission has major errorsrelated to citations, grammar,spelling, syntax, or organizationthat negatively impactreadability and articulation ofmain ideas(70%)Does not evaluate the findingsfrom the audit report from theCFO’s point of view(0%)7Does not develop a strategy tomitigate risks identified in theaudit report(0%)7Does not describe how thecompany might implement thestrategy based on the findingsfrom the audit report(0%)7Submission has critical errorsrelated to citations, grammar,spelling, syntax, or organizationthat prevent understanding ofideas(0%)2Earned Total100%

 

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