Please review attached documents. I have included the only information provided on company RNS (as the RNS Project Scenario) and I have provded the milestone 1  business environment analysis for RNS. 

Running head: AUDIT PLAN 0

Business environment RNS

SNHU

Audit Plan

The purpose of this audit is to examine the internal controls that are employed by Robbins Networking Solutions so as to determine the extent to which they are effective. In this case, an auditor is required to determine the level at which other tests must be performed so as to arrive at an opinion in regard to the entity’s financial statements. This audit plan is aimed at providing guidance on the procedures to be followed in evaluating the internal control system at RNS to communicate any weaknesses to those charged with governance.

RNS internal control system on the company’s financial reporting is not effective since it does not provide a reasonable assurance about the preparation of financial statements and the reliability of financial reporting for external purposes.

A. Major Financial Business Transaction

The major financial Business transaction to the company includes sales.RNS sells and installs computers and networking hardware and software, and provides information technology consulting to businesses. It is currently developing its own computer networking software to sell to customers.

B. The Highest Business Risks Associated with the Company.

At RNS, the highest business risk that is associated with this company is the financial risk. Owing to the fact that the company has allowed sales to customers with a higher credit risk profile, it is possible that there will be many defaulters (Walton, 2009). As a result, the company may suffer from decreased income from loan repayments, loss of the principal amount as well as the associated rising costs of collection. In this case, the credit losses are likely to exceed the benefits of increased sales. Besides, the competitors to the company may opt to engage in predatory pricing so as to gain market share which will drastically affect the company’s revenue. Even though the company may strive to be competitive by increasing its advertising expenses, chances are that this may not yield the desired results.

C.The Appropriate Types of Internal Controls for this Industry 

Application controls.

This includes the input, processing and output controls. While such controls are designed for each software application, they are intended to help the to ascertain and satisfy the transaction related assertions within the industry. Besides, they can help to detect or prevent a variety of misstatements.

Hardware controls;

Such controls are built to help in the detection or failure of equipment failures.

Physical controls

The physical controls within the industry would help to restrict the risk of unauthorized changes to programs and their improper use

Online Access Controls.

Such controls help to ensure that there are proper user IDs and passwords in place to control data files and related software. This would help to reduce unauthorized changes that would be made on the applications and data files.

D. Ethical Issues and How they can be Addressed

RNS faces issues such as access rights, personal privacy and harmful actions that arises from the industry. Given that it exchanges information on a large scale from anybody or any location, there are increased chances of violating the privacy of such people due to its widespread dissemination (Ugbogbo, 2016).RNS should take precautions in ensuring that there is accuracy of data within the finance department. Besides, the company should protect itself from unauthorized access of data or accidental disclosure to inappropriate individuals by incorporating proper internal controls.

E. Analysis of RNS’s current events for their impact on its risk and internal control in the future.

Currently the U.S economy is suffering a significant downturn. Besides, the credit losses are likely to exceed the revenue collected from sales. Moreover, its competitors are engaging in predatory prices to gain the market share. In future, the company plans to frequently monitor the industrial and economic conditions, besides the competitors’ actions. Moreover, it plans to review the aging of accounts receivable on a daily basis. The documentations required for these events includes the accounting database as well as the financial statements.

References

Ugbogbo, S. &. (2016). Ethical issues in information technology- A conceptual approach. Igbinedion University Journal of Accounting, 2, 174-243.

Walton, P. (2009). Financial Statement Analysis: An International Perspective. London: Cengage Learning.