Audit Assignment Harvard Case Solution & Analysis

Audit Assignment Case Study Solution

Two Key Questions:

The two key questions which we will asked to the internal audit department of Pellegrllino Shores are:

1. The whole working process of new patient revenue system and the interference of them during its development process.
2. The damages they have faced and the list of untrained and unskilled labors to operate this new system.

Audit Strategy:

The key strategy must be the sets of direction, timing and scope of the audit. This must be due to the implementation of new patient revenue system.

Associated Assertions to Acuity Vison’s Sales Team

The implications for the control environment within DHL including the specific issue that the management needs to consider is the identification of the actual sales placed in order to see that either the sales are happened or the bogus sales are recording in the financial statements just to boost up the revenues for the purpose of increasing the profits for the business ultimately the shareholders wealth which will directly over valued the market price of company’s shares.

While the effectiveness of its customer testing will be checked through the occurrence and the existence of the sales along with its cutoff period that either the sales are happened and at which time period just to check that the company are actually recording the sales of current financial period or to manipulate the customers they will adding up the prior or next period sales in current financial period for the purpose of increasing the profits for the business ultimately the shareholders wealth which will directly over valued the market price of company’s shares.

Accounts Payable Tests

Key Assertions for Overtime Payment

1. To confirm that the all wages employees have been paid to the workers for the work that they have performed.
2. To confirm that the all wages employees have been paid for the authorized person.
3. To confirm that the all wages employees have been authorized for their payment.
4. To confirm that the all wages employees have been paid at their current wage rate.
5. To confirm that the all wages paid to the employees have been correctly calculated.
6. To confirm that the all wages paid to the employees have been correctly mentioned in the financial statements and in the books of account.
7. To confirm that the all wages deductions of the employees have been paid over to the appropriate third parties such as income tax authorities.

The preventive internal control to address the risk associated with the presence of ghost employees, submission of fraudulent expense and the extra hours in which the work has not been performed is the third party verification, in which the employees will be verified and checked physically with the payroll records. The detective internal control to address the risk associated with the presence of ghost employees, submission of fraudulent expense and the extra hours in which work has not been performed, are the check of existence of the employees, the cutoff period of their payroll and overtime payment as well as the completeness of the transaction...........

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