Assessment Coversheet Student Name CIT Number Competency Title, Code and Banner Code CRN Implement and Maintain Internal Control Procedures (ACCT193 - FNSACC506) 61915 Assessment Type ☐ Written ☐ Case Study ☐ Project ☐ Presentation ☐ Other Assessment Name Assessment Task 2 – Case Study Assessment Date Assessment task 2a (DRAFT) is to be reviewed by your teacher in class in Week 13. Assessment task 2b (FINAL) is to be uploaded into eLearn by 11pm, Sunday 28 May 2017 (Week 14). Student Statement: This assessment is my own work. Any ideas and comments made by other people have been acknowledged. I understand that by emailing or submitting this assessment electronically, I agree to this statement. Student Signature Date PRIVACY DISCLAIMER: CIT is collecting your personal information for assessment purposes. The information will only be used in accordance with the CIT Privacy Policy. Assessor Feedback Feedback will be provided in eLearn.  Student provided with feedback Attempt 1 ☐ Satisfactory ☐ Not Yet Satisfactory Date / / Attempt 2 ☐ Satisfactory ☐ Not Yet Satisfactory Date / / Assessor Name Assessor Signature Note to Assessor: Please record any reasonable adjustment that has occurred for this assessment. Instructions to Assessor Work, Health and Safety: A work health and safety check of the assessment environment is to be conducted prior to the assessment and any hazards addressed appropriately. List the time, materials provided and assessment range and conditions on the next page These sections should be detailed enough for multiple assessors to consistently implement the assessment and include details of location, time restrictions, level of assistance permitted (if any), WHS, environment protocols, etc. The student should have access to techniques, procedures, information, resources and aids which would normally be available in the workplace. Include if open or closed book. Materials to be supplied may include: assessment paper, site plan, text, internet access, etc. Information for Students: You may have two (2) attempts for this assessment. • If your first attempt is not successful, your teacher will discuss your results with you and will arrange a second attempt. • If your second attempt is not successful, you will be required to re-enrol in this unit. Only one re-assessment attempt will be granted for each assessment item. Time Allowed: Assessment task 2a (DRAFT) is to be reviewed by your teacher in class in Week 13. Assessment task 2b (FINAL) is to be uploaded into eLearn by 11pm, Sunday 28th May 2017 (Week 14). Materials Provided: Assessment paper Assessment Range and Conditions: You are required to work in groups of 2-3 people and prepare a written response (using Microsoft Word) to the case study and questions provided for this assessment. Assessment Criteria: To achieve a Satisfactory result, your assessor will be looking for your ability to demonstrate the key skills/tasks/knowledge detailed in the Assessment Task to industry standard. • Report Format o Formal report using the template provided in the assessment o Report addressed to management and signed off by team o Report prepared using Microsoft Word using paragraphs • Appropriate introduction & objective and scope of audit detailed • Organisational chart shows correct structure of the organisation and prepared using appropriate software application • All staff responsibilities in the organisation correctly identified. • Minimum of five internal control weaknesses and associated risks correctly identified and explained including a weakness regarding the delegation schedule and a weakness regarding the maintenance of files & records • For each internal control weakness identified above, processes requiring change or improvement or new processes correctly identified and explained • Realistic timeline for the implementation of internal control recommendations provided • Main internal control issues and recommendations summarised in conclusion • Draft sighted by teacher in week 13 during class Assessment Task Instructions for Students This assessment will need to be done in a group of 2 – 3 students (you can choose your own group). Each student will need to upload their group’s case study into eLearn by the due date. You are required to work with your group and prepare a written response (using Microsoft Word) to the case study questions, using the template provided for this assessment. The Case Scenario Capital Consulting is an organisation which provides recruitment, training and career coaching services in Canberra, Australia. The responsibility for sales invoicing, accounts receivable and cash receipts within the organisation is separated between three finance officers as follows: • One finance officer is responsible for the Training Services department • One finance officer is responsible for Recruitment Services department • One finance officer is responsible for Career Coaching Services department The three finance officers report to the Office Manager, and the Office Manager reports to the Managing Director. The Office Manager prepares regular accounting information from the integrated computer accounting system. Capital Consulting invoice their customers after they have provided either training, recruitment or career coaching services. Customers have 30 days to pay their invoice, and customers can pay by cheque, cash or EFT. Credit checks are not undertaken prior to providing services to customers. The finance officers are responsible for raising invoices to customers and each finance officer enters invoice details into the computer accounting system themselves. As the Office Manager can sometimes take several days to approve an invoice as they are very busy, each finance officer approves their own invoices so that invoices can be sent to the customers as soon as services have been provided. Each invoice raised is usually below $30,000 (GST inclusive). When the mail arrives each morning, the Office Manager opens and sorts the mail. The Officer Manager gives each finance officer the customer receipts that relate to their responsibilities. Each finance officer prepares a batch total and enters the details themselves into the computer accounting system. At 3pm each day, a deposit list is printed from the integrated accounting system and one of the finance officers takes the deposit list and all the receipts to the bank. The finance officers review and follow up their customers outstanding accounts when they have spare time. The Office Manager approves all bad debt write-offs. The delegations schedule for Capital Consulting is below: Capital Consulting - Financial Delegations Schedule Position Accounts Payable & Purchasing approval limits Accounts Receivable approval limits Debt Write-off limits Managing Director Unlimited Unlimited Unlimited Office Manager $50,000 $50,000 No authority Finance Officers No authority No authority No authority Each Finance Officer keeps a hard copy file on each customer. The file contains information such as invoices, services provided, contact details, ABN details and bank details. These files are stored on each finance officers desk as the Managing Director will not approve the purchase of a filing cabinet. The finance officer’s desks are located in an open space which is accessible by clients and the public. The Managing Director considers all the employees to be trustworthy, but a number of factors have caused her to want to conduct an internal audit, these are: • She has heard that internal controls are very important • Sales have been low compared to previous periods • The cash at bank balance is lower than expected • She needs to employ a temporary staff member to fill in for one of the finance officers while on maternity leave The Managing Director has recruited you as an employee of the business to the position of graduate internal auditor. They have asked you to review the internal controls of the sales, accounts receivable and cash receipt functions of the organisation, and for you to provide suggestions for improvement. You report directly to the Managing Director. Required: Using the template on the following page, you are required to prepare a formal report, using Microsoft Word, to the Managing Director on the following: 1. Introduction - Provide brief background information of the client and management concerns (ie reason for the audit). 2. Objectives and Scope of the internal audit - Provide more detail on what subsystems of the business were audited and the aim of the audit. 3. Organisational chart - Prepare an organisational chart on the structure of Capital Consulting of the staff that are mentioned in the case study (prepare the chart using Word or prepare the chart in another application and import into your Word document). 4. Staff responsibilities - List the responsibilities of each staff member in the organisation. 5. Specific Findings - Find and describe at least five different internal control weaknesses that are apparent in the current processes and describe the risks associated with each of the identified weaknesses. Ensure you find one weakness concerning the application of the delegation schedule and another weakness concerning the management of files & records. Each internal control weakness should have its own paragraph (ie minimum of five paragraphs). 6. Specific Recommendations - For each of the internal control weaknesses identified above, explain what processes can be changed or improved and recommend new processes and procedures for the organisation to follow in order to improve internal controls. Each control issue recommendation should have its own paragraph (ie minimum of five paragraphs). 7. Timeline - Develop a timeline for the implementation of each internal control recommendation above. 8. Conclusion - Summarise the main internal control issues and recommendations. The report should be addressed to the Managing Director and is signed off by you and your team. Your report should be written in full sentences and paragraphs. Limited use of dot points is acceptable. See page 213 – 217 of your textbook for guidance on preparing your report. See next page for report template TO: FROM: Internal Audit of Capital Consulting 1. Introduction Provide brief background information of the client and management concerns (ie reason for the audit). 2. Objectives and Scope of the internal audit Provide more detail on what subsystems of the business were audited and the aim of the audit. 3. Organisational Chart Prepare an organisational chart on the structure of Capital Consulting of the staff that are mentioned in the case study (prepare the chart using Word or prepare the chart in another application and import into your Word document). 4. Staff Responsibilities List the responsibilities of each staff member in the organisation. 5. Specific Findings Find and describe at least five different internal control weaknesses that are apparent in the current processes and describe the risks associated with each of the identified weaknesses. Ensure you find one weakness concerning the application of the delegation schedule and another weakness concerning the management of files & records. Each internal control weakness should have its own paragraph (ie minimum of five paragraphs). 6. Specific Recommendations For each of the internal control weaknesses identified above, explain what processes can be changed or improved and recommend new processes and procedures for the organisation to follow in order to improve internal controls. Each control issue recommendation should have its own paragraph (ie minimum of five paragraphs). 7. Timeline to implement each recommendation above Use the table below to record the implementation timeline of the above internal control recommendations. Also detail which staff member is responsible for implementing each recommendation. Proposed activity Who is responsible Deadline 8. Conclusion. Summarise the main internal control issues and recommendations.