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Kota Qingdao berada di provinsi Shandong dengan populasi 8.715.000(Sensus 2010,wikipedia). kota ini terletak di sebelah utara negara China. kota ini memiliki arsitektur yang ke ereopaan pada beberapa bangunan di pusat kotanya karena dulu kala ada banyak orang barat yang tinggal di kota ini. di kota ini juga terdapat jembatan terpanjang di dunia yang baru saja di resmikan pada tahun 2011 ini jembatan tersebut diberi nama “Jiaozhou Bay Bridge” panjang dari jembatan ini adalah 42,5 km dan diresmikan sebagai jembatan terpanjang di dunia oleh Guiness world record pada bulan Juli 2011 lalu. jembatan ini menghubungkan antara pulau Qingdao dan Huangdao.

Di kota Qingdao ini juga terdapat pusat perbelanjaan yang bernama “Taidong” disana terdapat banyak sekalijenis barang mulai dari pakaian,sepatu sampai ke elektronik dan varian harganya pun sangat beragam. di kota ini juga terdapat daerah pegunungan yang sangat  indah namanya “Laoshan” dan ada jug pantai yang indah ditempat tersebut, jadi sebelum naik ke daerah pegunungan nya mata kita sudah dimanjakan dengan keindahan dari pantai dan laut lepas yang sangat luas. di kota ini juga terdapat banyak taman yang bisa menjadi tempat rekreasi atau sekedar beristirahat dari kepenetan rutinitas dan kebersihan taman nya pun sangat terjaga.

Mayoritas penduduk kota ini bekerja sebagai pedagang,rasanya dimana-mana pedagang juga kebanyakan orang Cina ya?hehe. tapi UKM di kota ini sangat maju dapat dilihat dari banyaknya toko2 di sepanjang jalan raya dan banyaknya produk-produk lokal yang berkualitas lumayan bagus beredar di tempat perbelanjaan. wajar saja kalo 42% dari total barang yang di ekspor oleh China merupakan produk dari UKM. penduduknya juga sangat pekerja keras tidak peduli sudah tua atau masih muda, hampir semua orang saya lihat di kota ini mempunyai perkerjaan entah itu kantoran sampai tukang sapu jalanan semuanya masih prodiktif bekerja.perekonomian masyarakat di kota ini juga mayoritas berpenghasilan tinggi terlihat dari banyaknya mobil bagus yang lalu lalang di jalan kota.masyarakat kota ini juga sangat pencinta fashion terutama kaum perempuan nya terlihat dari banyak nya ragam fashion yang sedang beken di kota ini, selain fashion elektronik seperti Handphone juga sangat diminati kebanyakan suka yang touch screen lalu disusul dengan HP model slide.

Kota Qingdao merupakan kota yang sedang berkembang  dengan pesat saat ini baik dari segi perekonomian,infrastruktur dan pariwisata. kota ini bisa menjadi tujuan utama wisata para turis asing di masa depan kelak. pemerintah China memang sangat serius dalam mebangun negaranya dengan cara memperbaiki tiap-tiap provinsi, kota dan desa. beruntung sekali saya bisa melihat secara langsung perkembangan yang sedang terjadi di negara China tepatnya di kota Qingdao ini.

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KKP 1 ( KUIS 12 )

How does IT governance fit into an organization’s overall governance?

  • Define the requirements and objectives for, and drive the establishment of, IT governance in an enterprise, considering values, philosophy, management style, IT awareness, organization, standards and policies.
  • Ensure that an IT governance framework exists and is based on a comprehensive and repeatable IT process and control model that are aligned with the enterprise governance framework.
  • Establish appropriate management governance structures, such as an enterprise investment committee, IT strategy committee, IT steering committee, technology council, IT architecture review board, business needs committee and IT audit committee.
  • Ensure that the enterprise and IT governance frameworks enable the enterprise to achieve optimal value for the enterprise.
  • Confirm that the IT governance framework ensures compliance with applicable external requirements and ethical statements that are aligned with, and confirm delivery of, the enterprise’s goals, strategies and objectives.
  • Obtain independent assurance that IT conforms with relevant external requirements; contractual terms; organizational policies, plans and procedures; generally accepted practices; and the effective and efficient practice of IT.
  • Apply IT best practices to enable the business to achieve optimal value from implementation of IT services and IT-enabled business solutions.
  • Ensure the establishment of a framework for IT governance monitoring (considering cost/benefits analyses of controls, return on investment for continuous monitoring, etc.), an approach to track all IT governance issues and remedial actions to closure, and a lessons-learned process.
  • Ensure that appropriate roles, responsibilities and accountabilities are established and enforced for information requirements, data and system ownership, IT processes, and benefits and value realization.
  • Report IT governance status and issues, and effect transparency in reporting.
  • Establish a communications plan to continuously market, communicate and reinforce the need and value of IT governance across the enterprise.

The Executive Summary makes five recommendations for management with respect to IT. What are these recommendations?

  • Strategic Alignment, focusing on aligning IT with the business and collaborative solutions.
  • Value Delivery, concentrating on optimizing  expenses and proving the value of IT.
  • IT Asset Management, focusing on knowledge and IT infrastructure.
  • Risk Management, addressing the safeguarding of IT assets and disaster recovery.
  • Performance Measurement, concentrating on the success of both business and IT leadership in carrying out the approved strategy.

How would an auditor likely view a company’s IT environment if the organization had implemented the above recommendations?

The auditor would be very helpful a company that they audit has implemented those recommendations because the risk of audit is decreasing and they can do the audit process in shorter term.

KKP1 ( KUIS 11 )

  1. What are three common pitfalls that should be avoided during brainstorming sessions? How can these problems be avoided?

“social loafing,” “groupthink” and “groupshift.”

To solve those problems there are several  ways such as:

Assign homework. The discussion leader should inform participants well in advance of a scheduled meeting that they will discuss fraud risks so each team member can focus on coming up with ideas about how and where the entity is susceptible. Distributing the meeting’s agenda (see the example) will also provide greater context for participants to think about possible fraud risks and will further inform them about what to expect during the brainstorming session. Circulating meeting agendas in advance can be particularly helpful in larger audit engagements with several team members. In contrast, a small firm with only four audit personnel might not need to circulate an agenda before a brainstorming session because it has agreed upon a common agenda to be used across all engagements.

The leader should encourage team members to use the experiences and knowledge obtained during previous audits and recent interactions with the client. Also, he or she should stress that the assignment should not be overly time-consuming; members can be formulating ideas as they perform their day-to-day tasks. Leaders should ask individuals to come to the meeting with a list of their ideas. If leaders believe it would help members who are shy about speaking at meetings, the lists prepared in advance can be discussed or distributed without identifying the preparer.

Establish ground rules. The leader should establish a strong foundation for brainstorming sessions by communicating fundamental ground rules before a session begins: Do not criticize others’ ideas, let each person speak, and try to build on others’ ideas. Audit team members should know what to expect of themselves and others. It is particularly important that all participants feel their input is valued and their voice will be heard. The leader also should make certain that participants understand how the session will proceed and how ideas generated during the meeting will impact the audit.

Some firms schedule stand-alone meetings to conduct the brainstorming sessions. This is most common for large or complex engagements. Other firms allow the brainstorming discussions to be part of a larger initial planning meeting, particularly when the audit engagement is relatively straightforward. When the sessions are part of a larger meeting, the engagement leader should ensure that sufficient time is allocated to this component of the meeting agenda.

Set the tone. At the beginning of a meeting, the leader should genuinely encourage all audit team members, including less experienced staff, to express any idea no matter how unusual it may seem. Because not everyone enters the brainstorming activity with a similar level of knowledge or experience with the client or willingness to share ideas about fraud risk in an open-ended fashion, it is important to establish a comfortable environment. There is no substitute for having the engagement leader stress to the audit team the importance of the brainstorming session, emphasizing that every idea is valued and everyone has something to contribute to the discussion. Demonstrated genuine involvement by the engagement leader will go a long way towards setting the stage for all team members to engage in the activity.

Take a “zero tolerance” stance on criticism. The leader must make it clear that no criticism about any issue presented will be allowed while the group is generating ideas about fraud risks. Imagine the reaction of a new staff person whose manager laughs or rolls her eyes at that individual’s suggestion. Any perception of criticism can quickly shut down a team member’s willingness to participate. Criticism also may negatively affect the efficiency of the brainstorming activity by diverting attention from the risk assessment process to other subjects. With a “zero tolerance for criticism” expectation, the team is less likely to fall prey to the pitfalls noted. Open-mindedness, not conformity, should be the meeting’s goal.

Encourage more not less. Participants should make every effort to generate as many ideas as possible about how and where the entity may be susceptible to fraud and how management might conceal its actions. The greater the number of ideas about potential fraud risks, the more likely the group will accurately identify and assess relevant fraud risks and develop appropriate audit responses to them. If idea generation about fraud risks within a particular business process (for example, inventory management) or account (investments) begins to wane, the leader should shift the discussion to another business process (purchasing) or account (receivables) or rephrase the current question to get the group thinking differently. So, if the group is discussing how receiving personnel might steal inventory and the brainstorming process begins to slow, the session leader might ask participants to think about how purchasing personnel could misappropriate inventory (for example, redirecting inventory orders to unauthorized locations). Reframing issues from different perspectives can be a valuable technique for increasing the number of ideas generated about a particular fraud risk.

Credit the group, not individuals. It is important for the leader to assign credit for ideas generated to the group as a whole rather than to a contributing member. Recognizing group ownership of ideas is more likely to increase the team’s interest and its commitment to its goals than when individuals are rewarded personally.

Manage group size and composition. When determining which members to include in individual brainstorming sessions, team leaders must not only include the ones who will be key to the discussion at hand, but also understand how group size might affect the outcomes. Thus, the number of people participating in sessions may vary across an engagement.

The size of the group affects the structure of the session: Smaller groups (seven or fewer individuals) tend to complete tasks more quickly and reduce the potential for group domination or social loafing; larger groups (twelve or more individuals), on the other hand, are better problem solvers and idea generators because there are more individuals thinking about fraud risks. However, large groups tend to deter certain individuals from participating. Therefore, for some very large engagements, the leader may find it advisable to divide the engagement team into subgroups, perhaps along the client’s business segments, for detailed brainstorming about fraud risks in those segments. Later, representatives from each subgroup can convene to discuss the risks identified at the segment level and to brainstorm about consolidated risks.

For example, when engagement personnel are located in multiple offices, one national firm conducts an initial brainstorming conference call with engagement leaders in various locations working on the client engagement. Subsequent to that conference call, each local engagement leader then conducts brainstorming sessions with his or her engagement personnel. Fraud risk issues identified in local office sessions are discussed in a follow-up conference call involving key engagement leaders from all offices serving the client.

  1. What are three important techniques to improve the effectiveness of a brainstorming session?

Open brainstorming, Round-robin brainstorming, Electronic brainstorming

KKP 1 ( KUIS 10 )

  1. Use EDGAR to search for Tri-Valley Corporation (TVC) and Monarch Staffing Inc. Find TVC’s 10-K and Monarch’s 10-KSB for the year ended 12-31-06.

TVC :

http://sec.gov/Archives/edgar/data/22551/000002255107000009/tvc123106-10k.htm

monarch:

http://www.secinfo.com/d12PKm.u1p.htm

  1. Did either company report material weaknesses in ICFR? If so, what were the weaknesses?

Yes they did, TVC: Yes, Both companies reported material weaknesses in ICFR for the year ended 12-31-06. TVC reported deficiencies “related to controls over the accounting for complex transactions to Ensure such transactions are recorded as necessary to permit preparation of financial statements and Disclosures in accordance with generally accepted accounting principles. Such transactions included: TVC reported deficiencies “related to the control of the complex accounting for the transaction to ensure that transactions are recorded as necessary to permit preparation of financial statements and disclosure in accordance with accounting principles generally accepted. The transaction includes:

  • Proved and unproved properties
  • Loans guaranteed with restricted common stock, loans secured by restricted common stock,
  • Deferred income taxes, deferred income taxes,
  • Discontinued operations from the sale of our interest in Tri-Western Resources, and Stop operation from the sale of our interest in Tri-West, and
  • Share-based payment arrangements, “Share-based payment arrangements”

    Monarch Staffing deficiencies reported as follows: Monarch Staffing shortages

reported as follows:

“We did not maintain a sufficient complement of personnel with an appropriate level of accounting knowledge, experience, and training in the application of U.S. generally accepted accounting principles commensurate with our existing financial reporting requirements and the requirements we face as a public company. “We do not maintain a sufficient complement of personnel with the appropriate level of accounting knowledge, experience and training in the application of U.S. accounting principles generally accepted requirements commensurate with the existing financial reporting and the requirements we face as a public company. Accordingly, management has concluded that this control deficiency constitutes a material weakness, and that it contributed to the following material weakness. Therefore, management has concluded that this control deficiency is a material weakness, and that contributed to the following material weaknesses.
We did not maintain effective controls with respect to reviewing and authorizing related party transactions. We did not maintain effective controls in relation to the review and authorization of related-party transactions. Specifically, our control procedures did not prevent the Company from making payments on behalf of other related parties. Accordingly, management has concluded that this control deficiency constitutes a material weakness. “Particularly, our monitoring procedures did not prevent the Company made payments on behalf of related parties other. Therefore, management has concluded that this control deficiency is a material weakness. ”


			

KKP1 ( KUIS 9 )

  1. Imagine that you are employed as an auditor in a CPA firm that performs the audit of Microsoft. Your firm’s materiality guidelines indicate that overall engagement materiality should be set at an amount between five and ten percent of income before taxes.

a.  Apply your firm’s guidelines to Microsoft’s 2003 financial statements. What percentage of income before taxes do you believe is appropriate? Why? What do you believe overall engagement materiality should have been for 2003?

b.  Given Microsoft’s 2003 balance sheet, what asset line items would be allocated the highest amount of tolerable misstatement? Why?

a. the amount of  income before taxes in 2003 is 14.726 .

first we have to determine the Planning Materiality (PM) . PM is usually determined by the auditors before the audit process in the field be done. Well, PM can be determined from  the Total Revenue or Total Assets. Usually suggested range for revenue is 0.5% to 1%. As for assets ranging from 1% to 5 %. Between Revenue and Total Assets, simply use one of them, so do not need both. Revenue usually is more often used as a reference in the PM. On condition that the comparative revenue between the current year with previous years did not experience a decrease or increase significantly. If the revenue is volatile, it is usually used total assets after determined the PM we need to determine the PAJE scope, PAJE scope is the minimum amount that auditor can tolerance if there was a misstatement in financial report during the audit field, PAJE scope is usually between 2% from the PM.. In this case the amount of EBT is increasing significantly from 2002 to 2003, we need to be  skeptic with this situation perhaps there’s a manipulation but we don’t have any prove yet. So we need to investigate it, at first we need to determine the materiality that can be accepted/ misstatement that can be tolerance by the auditor, the materiality for EBT in 2003 is 1%-5% because there is a significant increasing in 2003. Another reason why the material is between 1%-5% because we can do audit field by using software so that auditor can have more prove in doing audit.

b. cash and equivalent  6,438, account receivable 5,196, equity and other investment 13,692,common stock  35,344. Because their amount are material and have a big impact to the fairness of the whole financial statement.

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