Scribd
Upload
46 views7 pages

Coursework 7

Cherry Blossom Ltd operates a payroll system with internal controls and procedures for hourly and salaried employees. The presentation will identify objectives of internal controls in payroll, discuss strengths and weaknesses of Cherry's controls, and describe recommendations. It will also evaluate evidence collection procedures used in the audit.

Uploaded by

Bình NGuyễn Công
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
46 views7 pages

Coursework 7

Cherry Blossom Ltd operates a payroll system with internal controls and procedures for hourly and salaried employees. The presentation will identify objectives of internal controls in payroll, discuss strengths and weaknesses of Cherry's controls, and describe recommendations. It will also evaluate evidence collection procedures used in the audit.

Uploaded by

Bình NGuyễn Công
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 7

Module No: BAA6003

________________________________________________________

ASSESSMENT DATE: Week Beginning 11 March 2024

Scenario 7

TIME ALLOWED: 25 minutes

________________________________________________________

Learning Outcomes:

Students should be able to:


 Understand the advanced theory and practice of auditing practice and
procedures.
 Analyse and apply different audit approaches to structured and
unstructured problems.

BAA6003 Coursework 2024 Page 1


INSTRUCTIONS:

In your team prepare a presentation on Fox Industries Ltd,


answering the parts (i) to (iii). You will have a maximum time
allocation of 15 minutes per group (excluding questions).

Following your presentation, your team will be asked additional


questions, so ensure that you make yourself aware of all relevant areas,
not just the area you are presenting on.

How you allocate the work to be presented is up to you, but bear in mind
that there are marks allocated for team work.

If a team member is asked a question to which you are able to add


supplementary, relevant information, then additional marks will be
allocated to you.

Marks will be allocated as shown in the table below:

Presentation Additional questions


40% content (slides and 30% if additional
verbal) question answered well
15% presentation style 15% extra marks if
supplement answer to
team mates question

The marking scheme that will be used to assess your presentation forms
part of this document. This coursework represents 50% of your final
module mark.

All groups will be recorded, for IV purposes.

The lecturer will need an electronic copy of your Powerpoint


presentation before your presentation. This should reach the lecturer no
later than Friday 15 March 2024 by 11am, via Turnitin on Moodle.
You will not be able to alter the presentation after this date and it will be
the copy the lecturer holds that you will use for your presentation.

BAA6003 Coursework 2024 Page 2


Cherry Blossom Ltd (Cherry) manufactures chemicals and has a factory
and four storage warehouses, based in Cardiff. There is a head office
based in Newport at which all the administration, sales, marketing and
accounting staff are based. Cherry employs 260 people; 60 salaried staff
are based in the head office and the remaining 200 are hourly paid and
either work in the factory or one of the warehouses.

Cherry operates one night shift and one day shift. Each shift lasts twelve
hours and the employees swap from night to day shifts on alternate
weeks. Each shift has a shift supervisor. Hours worked by each
employee are recorded using a keypad to log hours worked. The
employee keys their individual pin number into the keypad at the start
and end of the shift. If a new or temporary employee starts work with
Cherry, the shift supervisor allocates a keypad pin number to them. An
email is sent to the payroll department notifying them of the pin number
allocated and the employee’s name.

Due to the number of employees, Cherry has a payroll department


consisting of two people; Ali and Grace. Both have access to the
password used for the payroll system. The information from the keypad
is automatically forwarded to the payroll system, which calculates any
overtime and adds it to the standard pay. Any overtime in excess of 20%
of the standard hours is sent on a computer generated report by email to
the Financial Accountant. If necessary, the accountant overrides
overtime payments if the hours worked are incorrect for example if the
accountant has been made aware that the employee forgot to enter their
pin number to indicate the end of the shift.

Statutory deductions and net pay are also computer calculated.


Employees are paid weekly for their standard hours and for any overtime
worked in the previous week. A list of net cash payments for each
employee is produced. Cash is delivered to the payroll office every
Thursday morning by secure courier. Ali or Grace place the cash into
wages packets for each employee with a computer generated payslip
outlining the gross pay, deductions and net pay. Every Friday, the shift
supervisors drive to head office to collect the wage packets. A list
detailing each employee and the amount in their pay packet is given to
the supervisors. The supervisors distribute the cash wages to the
individual employees on their shifts, obtaining a signature from each
BAA6003 Coursework 2024 Page 3
employee on the list they are given by payroll. If any employees are
absent on Friday then the factory supervisor keeps these wages and
returns them to the payroll department on Monday, along with the signed
list of collected wages. The employee turns up to head office to request
their pay packet on their return to work.

Details of starters, leavers and amendments to employee details are


recorded on standard forms by the supervisors and passed to Ali and
Grace for input into the system. After updating the standing data, they
discard the forms. Every year end (31 December), Ali or Grace
automatically apply an increase to the hourly rate equivalent to inflation.

On a monthly basis, either Ali or Grace posts the weekly payroll


summaries to the nominal ledger accounts. They also extract the tax
details from the weekly payroll summaries and on a monthly basis
record the figures on the taxation authorities’ payslip before authorising
a bank transfer to pay the liability.

Head office staff are paid on a monthly basis by bank transfer. On the 3rd
Thursday of the month, Ali or Grace initiate a month end salary
procedure in the payroll system and the process is fully automated.
Recently the Sales Director, keen to drive up sales has introduced a
bonus for the sales team. The Sales Director forwards a list of names to
Ali or Grace and they override the payroll system to pay an additional
bonus to the sales team, between 0-10% depending upon performance.

Cherry’ external auditors are Lane & Co. You are employed by Lane &
Co. Your team has just finished its audit of Cherry and the engagement
partner has requested you present the results of your work to date on
the following areas:

Required:

i Identify the objectives of exercising internal controls in a payroll


system and discuss the extent to which the procedures exercised
by Cherry achieve these objectives; outlining both the strengths
and weaknesses.

ii Describe the procedures which would strengthen Cherry’s payroll


system.

BAA6003 Coursework 2024 Page 4


Iii Evaluate the procedures you used to obtain evidence during your
audit of Cherry, as prescribed by the relevant accounting
standards; including analytical review, reconciliation, inquiry,
inspection, observation and recalculation.

Marking Scheme

As a group member

1. Did the presentation have a logical structure – an introduction, main body and conclusion?

Not evident Weak Satisfactory Good Very Good


0 1 2 3 4

2. Was the presentation (excl. questions) to the point and timeliness adhered to?

More than 15 minutes or less 5-6 min or 7-10 min Between 11-15
than 5 minutes 16-17 min min
0 2 3 4

3. Was the font large enough to be read and the slides not overcrowded?

Not evident Weak Satisfactory Good Very Good


0 1 2 3 4

4. Did the audit work performed clearly identify internal controls?

Not evident Weak Satisfactory Good Very Good


0 1 2 3 4

5. Were the weaknesses clearly outlined?

Not evident Weak Satisfactory Good Very Good


0 1 2 3 4

6. Were the recommendations appropriate to remedy the weaknesses?

Not evident Weak Satisfactory Good Very Good


0 1 2 3 4

BAA6003 Coursework 2024 Page 5


7. Was there evidence that six evidence collections methods were clearly understood?

Not evident Weak Satisfactory Good Very Good


0 2 6 9 12

8. Was there evidence that the presentation was performed in a cohesive manner, that
indicated the group had worked together?

Not evident Weak Satisfactory Good Very Good


0 1 2 3 4

As an individual

9. Was body language appropriate? e.g. eye contact, smile

Not evident Weak Satisfactory Good Very Good


-1 1 2 3 5

10. Was the dress code appropriate?

Weak Satisfactory Good Very Good


-1 3 4 5

11. Did the student speak clearly, confidently, concisely and at an appropriate speed?

Not evident Weak Satisfactory Good Very Good


0 1 2 3 5

12. Was the student’s additional question answered in a manner which displayed the
question was understood and relevant information brought in to support the answer?

Not answered Weak Satisfactory Good Very Good


0 5-14 15-19 20-24 25-30

13. Did the student supplement a team member’s question?

Not evident Weak Satisfactory Good Very Good


0-1 2-5 6-7 8-10 11-15

BAA6003 Coursework 2024 Page 6


Mark out of 100 =

BAA6003 Coursework 2024 Page 7

You might also like