Overview
Assignment #1
Data analytics is an important part of the auditing process. For this project, you will use data analytics to evaluate audit evidence.
Complete questions 6–35 (a–c) on page 184 in your course textbook (Auditing & Assurance Services).
Please refer to the following to complete your work on this assignment:
Present your findings (answers to questions a–c) in a 7–10-slide PowerPoint presentation (not inlcluding the title and reference slides), with 200–250 words of speaker notes per slide.6-35 (Objective 6-9) Data Analytics As part of the engagement team for the audit of JA Tire Manufacturing for the year ended December 31, 2023, you are responsible for auditing the sales and collection cycle. Visit pearsonhighered.com/arens to download the data file “JATireSales.xls” provided to your audit firm by the company. The manager has instructed you to read the JA Tire Manufacturing system description provided on the first tab of the Excel file before attempting this assignment to familiarize yourself with the sales process and the relevant worksheets and terminology. This file contains sales transaction information for the year ended December 31, 2023. You will use this data file to perform the following audit procedures.
Required
Open the data file and review the contents for each of the worksheets (Sales Order, Bills of Lading, Invoice, Cash Receipts, Customer List, and Product List). You will work with the Invoice, Sales Order, Bill of Lading, and Customer List worksheets for this problem. What columns are included in both the Invoice and Sales Order worksheets? What columns are different between these two worksheets?
One of the audit objectives you are testing is the occurrence audit objective for sales. Use functions in Excel to determine whether any of the following are present, and if present, identify which observations:
Duplicate invoice numbers in the Invoice worksheet
Duplicate customer purchase order numbers in the Sales Order worksheet
Bills of lading and invoices with repeated sales order numbers in the Bill of Lading and Invoice worksheet, respectively
Sales orders in the Sales Order worksheet without a customer purchase order
Summarize your findings. What is your conclusion about the occurrence audit objective based on these audit procedures?
Assignment #2
Answer questions 11–31 (a–e) on page 377 of your course textbook (Auditing & Assurance Services).
Write a 5–7-page paper discussing your answers to the questions.11-31 (Objectives 11-3, 11-4)
Research: The SEC issues Accounting and Auditing Enforcement Releases (AAERs) summarizing SEC actions concerning civil lawsuits brought by the SEC in federal court and related settlements from administrative proceedings. Visit the SEC’s website (www.sec.gov) and locate the link to Accounting and Auditing Enforcement Releases (AAERs) under the “Enforcement” tab. Locate AAER-3932 involving Maxwell Technologies, Inc. issued on March 27, 2018.
Required
Briefly describe how the Maxwell Technologies, Inc. 2011 and 2012 financial statements were misstated.
Describe examples of deficiencies in Maxwell Technologies’ control environment.
One of the inherent limitations of internal control is management override of internal control procedures. Give an example of management override from the Maxwell Technologies AAER.
Maintaining adequate documents and records is an important element of an entity’s control activities. How did the company’s vice president of sales and marketing violate this important element of internal control?
The risk assessment component of internal control involves a process for identifying and analyzing risks that may prevent the organization from achieving its objectives. How did the senior financial personnel exhibit deficiencies in risk assessment procedures related to red flags regarding sales and collections from the German distributor?