Assignment Brief

BA (Hons.) International Business & Finance

Academic Year 2020-21

Module Information:
Qualification: BA (Hons.) International Business & Finance

Module Code & Title: BA IBF 09014 Audit & Assurance

Assignment Title: Individual Report

Component Weighting: 40%

Due date:
Date of Issue:06/05/2021
Online Upload: 17/06/2021, 5 PM

To be filled by the student:

Banner ID:

Date of Submission:

First Submission or Resubmission

*All work must be submitted on or before the due date. If an extension of time to submit work is required, a Mitigating
Circumstance Form must be submitted.

Has an extension been approved? Yes No

If yes, please provide the new submission date ….…/.…. /……. and affix appropriate evidence.
 First Marker: Second Marker:

Agreed Mark: Refer: Yes / No

General Guidelines
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page as your cover sheet and be sure to fill the details correctly.
This entire brief should be attached in first before you start answering.
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The submission of your work assessment should be organized and clearly structured.

Word Processing Rules

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point and should be in the style of Times New Roman.
2. Use 1.5-line word-processing. Left justify all paragraphs.
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4. Use footer function on the word processor to insert Your Student ID, Name, Subject, Module
code, and Page Number on each page. This is useful if individual sheets become detached
for any reason.
 5. Use word processing application spell check and grammar check function to help edit your
assignment.

Important Points:
1. Check carefully the hand in date and the instructions given with the assignment. Late
submissions will not be accepted.
2. Ensure that you give yourself enough time to complete the assignment by the due date.
3. You must take responsibility for managing your own time effectively.
4. If you are unable to hand in your assignment on time and have valid reasons such as illness,
you may apply (in writing) for an extension.
5. Non-submission of work without valid reasons will lead to an automatic REFERRAL. You will
then be asked to complete an alternative assignment.
6. Take great care that if you use other people’s work or ideas in your assignment, you properly
reference them in your text and any bibliography, otherwise you may be guilty of plagiarism.

Statement of Originality and Student Declaration

I hereby, declare that I know what plagiarism entails, namely, to use another’s work and to present it
as my own without attributing the sources in the correct way. I further understand what it means to
copy another’s work.

1. I know that plagiarism is a punishable offence because it constitutes theft.

2. I understand the plagiarism and copying policy of the University of the West of Scotland.
3. I know what the consequences will be if I plagiaries or copy another’s work in any of the
assignments for this program.
4. I declare therefore that all work presented by me for every aspect of my program, will be my
own, and where I have made use of another’s work, I will attribute the source in the correct
way.
5. I acknowledge that the attachment of this document signed or not, constitutes my agreement
on it.
 6. I understand that my assignment will not be considered as submitted if this document is not
attached to the attached.

Student’s Signature: Date:

TASK

1. Discuss on any TWO standards of Auditing. You should include your analysis on how the chosen
standard can help in auditing of the company you have chosen in TASK 1
2. Describe any 5 controls the above company has in place to prevent Fraud and errors from
happening.

Word limit – 1500 to 1700 words

Marking Scheme

Content Marks
1 Introduction to the assignment 5
2 Introduction to the chosen company 5
3 Understanding of the entity 15
4 Understanding of the entity's environment 15
5 Discussion on the standard ( 6 marks each ) 12
6 Application of the standard to the chosen company ( 2 each ) 4
7 Description of 5 controls in place ( 6 marks per control) 30
8 Conclusion 3
9 Presentation and Language flow 6
10 Bibliography 5
Total 100
SAS Institute (or SAS, also known as "sass") is an American international developer of
mathematical software based in Cary, North Carolina. SAS develops and sells analytics
software (also called SAS), which helps access, manage, analyze and report information to
assist in decision-making. The company is the largest privately owned software business and
its software is used by most of the Fortune 500.

The SAS Institute began as a project at North Carolina State University to develop a
mathematical analysis system (hence the correct name, Statistical Analysis System) which
was mainly used by agricultural departments at universities in the late 1960s. This became an
independent, independent business led by current CEO James Goodnight and three other
project leaders from the university in 1976. SAS has grown from $ 10 million in revenue in
1980 to $ 1.1 billion in 2000. A large proportion of these funds are spent on research and
development than many other software companies; simultaneously more than double the
industrial average.

In the 1980s, SAS was one of the fastest growing companies in Inc. Magazine in the United
States since 1979 and 1985. It has grown by more than 10 percent annually from $ 10 billion
in revenue in 1980 to $ 1.1 billion in 2000. In 2007, SAS revenue was $ 2.15 billion, and in
2013 revenue was $ 3.02 billion. In the late 1990's, SAS was the largest privately owned
software company. The Associated Press reported that analysts attributed the increase to
R&D spending. It had the highest rate of R&D spending in the industry for eight years,
setting a record 34 percent of its revenue in 1993, as was running on a new interface-based
interface. The company began its relationship with Microsoft and the development of
Windows operating systems in 1989. Shortly afterwards it established partnerships with data
storage companies such as Oracle, Sybase and Informix.

Understanding the Entity and Its Environment understanding of the information

system

Nature of the entity

Financial management

Make a quick integration. Develop more accurate budgets. Understand income, expenses, and
profits. SAS Financial Management introduces business planning, budgeting, integration and
reporting into a single integrated solution. An asset-related calculation engine and logic logic
lets you combine planning information and history into demand - ensuring that decision-
makers and regulatory agencies keep up-to-date information.

Features

Accounting Vision-Supports multiple counting levels and partial ID integration.

Budgeting and planning-Supports rolling forecasts, top-down and bottom-up budgets and
seed-cycle seeding.

Process management-Simplify reporting management and data entry forms with web-based
workflow control.

Data management-The built-in data model creates a consistent view and allows true
integration with other SAS solutions.

Information delivery- Provides active report distribution to a large community with a variety
of users.
Investment

SAS is investing in new R&D in all key AI areas, with a special focus on making it easier for
users with different levels of skills to benefit - from business professionals to data engineers
to data scientists. SAS incorporates AI capabilities into the SAS Platform as well as data
management solutions, customer intelligence, fraud and security intelligence and disaster
management, as well as industry applications including financial services, government, health
care, production and sales.

SAS continues to work with new companies and leading technology providers such as
Accenture, Cisco, Deloitte, Intel and NVIDIA. This work brings the latest developments and
practices in AI and machine learning to customers, and ensures SAS AI technology works
well in hardware and customer environments.

SAS, which drives the future of analytics, is investing $ 1 billion in AI over the next three
years through software technology, education, professional services and more. The
commitment builds on an already solid SAS foundation in AI that includes advanced
analytics, machine learning, in-depth learning, natural language processing (NLP) and
computer vision. Educational programs and professional services will equip business leaders
and data scientists with the future of AI, with the technology, skills and support they need to
transform their organizations.

Objectives and strategies and relating business risks

Expansion

SAS Institute doubles the size of their existing child care center. Site issues require new
construction rather than expanding existing building. Renewable materials combined with the
construction of new and old bridge-building bricks, and blends well with the natural
playground. Inside, the center offers K-5-year study spaces as well as a shared arts and
science lab, a restaurant, a movie room, and a state-of-the-art multi-vehicle space that
enhances institutional flexibility during difficult weather days. The loft area has management
spaces with bird-eye view with the common spaces below. Studio MLA Architects, in
partnership with Bright Horizons, has provided plans, ideas, and construction services. The
local architect provided us with drawings of the works and a combination of construction.

Industry Development

Transform data into important data for acquiring, developing, producing and selling new
products and technologies with new agtech solutions.

BUSINESS-Protect your future using advanced analytics with embedded AI to drive your
digital transformation and meet strategic business needs.

HEALTH CARE - Improve patient outcomes and experience with advanced healthcare
analytics that drives value-based health care.

SMALL BUSINESS AND MIDSIZE - Advance digital transformation, improve

productivity, work efficiency and instantly innovate with cloud-based analytics solutions,
including AI.

TELECOM, MEDIA & TECHNOLOGY-Solve current and future challenges using an open
and cloud-enabled analysis environment with embedded AI.

PERFORMANCE-Tune production operations at low cost and risk while using data as an
asset that helps deliver new services and quality products that are only possible in a
connected economy.

Employee performance measures

Performance management

1. Manage costs without sacrificing growth.

Given the nature of the current incentives (meeting monthly or annual targets), the challenge
is to meet short-term goals while maintaining strategic growth plans.

2. Understand the cost of driving and the cost.

Without this understanding, managers have the potential to allocate resources appropriately
and know where they can improve. Best of all, it may produce results below; worse, it can
damage the value unknowingly and irreparably.

3. Improve speed.

Organizations that can identify opportunities and threats more easily than their competitors,
understand the consequences, update strategies faster and apply that strategy consistently to
the organization will be more successful.

4. Identify and respond to risks and opportunities.

Focusing on the "triple queue" of people, profits and planets to increase product value
through innovation, improves internal efficiency and accountability, and builds the credibility
of consumers, employees and other stakeholders.

Employee management

SAS has developed the skills of employee management. It has been listed as one of the best
working places in Fortune magazine every year since the list was first published. Employees
seem to really enjoy the performance of SAS and are uncommonly attached to the company,
resulting in a price tag of less than 4% in the industry where 20% is common. In fact, when
Google built their popular campus in California, they visited the SAS campus for ideas.

One thing SAS does well is to provide its employees with opportunities to work on exciting
and challenging projects. Software developers have the opportunity to develop state-of-the-
art software that will be used worldwide. The company is making an effort to focus its
business on analytics, which adds value and helps organizations better analyze the diversity
of decision-making data, opening up opportunities for SAS employees to be challenged.
Also, the company removes barriers to employees. Resources, policies, rules and meetings
that may interfere with production are eliminated.

Competitor
The top 10 competitors in the SAS competition set are Microsoft, SAP, IBM, Oracle,
MicroStr Strategy, Tableau, TIBCO, Teradata Corp, Informatica, Logi Analytics.

2 Audit Standards

620 using the work of an auditor’s expert

ISA 620, Using the Auditor-General's work defines the auditor's expert as: 'A person or entity
holding expertise in a field other than accounting or auditing, whose function in the field used
by the auditor is to assist the auditor in obtaining adequate audit evidence.

Expert Auditor - A person or organization with special knowledge in a non-accounting or

auditing field, whose work in that field is used by the auditor to assist the auditor in obtaining
sufficient audit evidence. An auditor may be an internal auditor (partner3 or employees,
including temporary employees, an auditor firm or network company), or an external auditor.

(b) Expertise - Skills, knowledge and experience in a particular field (c) An expert in a
person or organization with expertise in a field other than accounting or auditing, whose work
in that field is used by the entity to assist the entity in preparing financial statements.

Environment, Scope and Objectives of the External Auditor's Work

• The nature and scope of the procedures to be performed by an external auditor.

• The objectives of the external auditor's work in the context of material and risk factors
related to the matter of the external auditor's external professional work and, where
appropriate, the effective financial reporting framework.

• Any applicable performance standards or other professional or sectoral requirements of an

external auditor will be followed.

• Guessing methods, including models where appropriate, an external auditor will use, and
their authority.

500 Audit evidence

The ISA 500 explains what constitutes audit evidence for the audit of the financial
statements, and discloses the auditor-general's performance in obtaining sufficient audit
evidence to obtain sufficient audit evidence to justify the auditor's conclusions.

The information used by the auditor to draw conclusions where the auditor's opinion is
audible includes all the information contained in the financial records under the financial
statements and other information.

ISA 500 Purpose

The Auditor-General's intention is to create audit procedures in such a way that the auditor
can obtain sufficient audit evidence to draw conclusions based on the auditor's opinion.

ISA requirements 500

The ISA 500 requires the auditor to design and implement appropriate audit procedures in
cases;

When designing audit evidence it considers the value and reliability of the information

The ISA 500 requires an auditor using information provided by the business;

Obtaining audit evidence for the accuracy and completeness of information; and to assess
whether the information is accurate and informative for the purposes of the auditor.

5 Controls to prevent fraud and errors

1.Use a check and balance system to ensure that no one is in control of all aspects of
financial transactions of SAS Institute

o Requires purchase, payment and fees to authorize the nominee.

o Different management functions (receipt and deposit) from record keeping functions
(recording transactions and syncing accounts).

o Ensure that the same person is not authorized to write and sign the check.

o When you open a post, you allow or stamp “Deposit Only” cheques and write the log list
before placing them in the receipt person. Occasionally sync the incoming entry record
against deposits.

o Require management to approve working hours sheets before salary adjustments are
adjusted.

o Requires paycheques to be distributed by a person other than the one who authorizes or
records transactions of employees or prepares cheques payable.

o If the agency is so small that you cannot distinguish duties, seek an independent check for
the work being done, for example, by a board member.

o Require Accounting staff to take vacations.

2. The bookkeeper should never sync a bank account.

The bookkeeper should never sync a bank account. That is how they covered their tracks.
Determining fraud is difficult when your accountant is a stumbling block, because they have
the knowledge and ability to use your financial records and books.

Business bank accounts are not protected as consumer accounts under provincial law, which
means you cannot trust the bank to cover fraud and errors in your account. The specified
business account can be very damaging
o Seek conciliation to be completed by an independent person who is not responsible for
bookkeeping or who is overseeing the signing process or who needs a conciliation
management review.

o Check cancelled cheques to make sure vendors are recognized, costs are related to the
business of the agency, signatories are authorized signatories, and approvals are appropriate.

o Check bank statements and cancelled cheques to make sure cheques are not issued in
sequence.

o First and foremost bank statements or reconciliation reports to prove that a review and
reconciliation is being done and include bank statements and reconciliation.

3. Don’t let the person who does billing make the deposits

The person who does the billing should not also be the person who deposits checks. Someone
who does both can endorse a check to themselves and delete the original invoice.

SAS Institute can avoid this form of fraud by separating duties so the person who does the
billing is not the same person who is making deposits. By outsourcing the bookkeeping and
controller aspects of the business, you are more likely to deter fraudulent activity since
there’s more than one pair of eyes watching your books.

 Divide your accounting activities: Accounts Payable, Accounts Receivable, and

Authorization See Writing
 Use purchase orders, or make a separate approval of invoices before handing them off
 Distinguish bank reconciliation with cash payments
 Authorization, record keeping, and related assets should be given to different
employees
 Insufficient physical controls over IT hardware results in changes, destruction, or
misappropriation for personal gain

 Critical computer hardware located in secured data centers

 Access to data centers restricted based on job responsibilities
 Various Security schemes used ( eg, key card access, closed circuit camera
surveillance, security guards).
 Policies and procedures documented
 Security cables used for laptop computers to prevent from hacking
 Inventory of workstation performed quarterly
 Formal provisioning procedures

5.Banking application fraud

That New Jersey ringleader and his associates had honed the art of a bust-out scheme: open a
line of credit for a fake identity, cultivate a good history for that account, then grab the big
payoff. In insider terms, it’s “make up,” “pump up” and “run up and cash out.”

Analytics and machine learning are empowering banks and other creditors to fight back more
effectively – and earlier in the game. The trick is that the best analytical methods will vary
depending on available data, the type of fraud and the phase of the endeavor. Multiple
methods used together can very effectively find fraud while managing false positives.

At the make-up stage, the fraudster manufactures identities and uses them to gain access to
credit. Financial institutions can spot the seeds of future fraud by:

 Monitoring application data to see if the same information or device is being reused across
multiple identities that otherwise appear unrelated.

 Assessing past experience for existing or closed accounts that shared the same data element,
such as device ID, address or SSN.

 Searching for “proof of life,” well-rounded details for the identity, such as driver’s license,
voter registration or property ownership.

 Analyzing the social network to spot unusual or suspicious connections (or lack thereof)
among applicants, devices, accounts, credit files and application data.
At the pump-up stage, the fraudster uses credit lines in a normal fashion, making small
purchases and paying off the account each month, thereby creating the appearance of good
credit, which is used to request further credit.

Perform a Self-evaluation of Your Internal Controls

Performing a self-evaluation can help you to highlight any areas that come up short before
problems arise and give you the opportunity to use more effective controls. The easiest
process to perform a self-evaluation is by conducting a trace of a particular transaction
throughout company records and procedures. The trace will give you a deeper understanding
of your internal controls in action, particularly those controls which are in place to detect or
prevent fraud. You will also be able to see if your internal controls have been designed
effectively and are operating as intended.

Effective internal controls for your accounting and finance should be an integral part of your
business plan. Internal controls significantly reduce the risk of loss of assets and increase the
reliability and accuracy of all your accounting and finance operations. Additionally, controls
ensure that your company’s accounting system is in accordance with applicable laws and
regulations.