Denmark Corporation: Entities, Activities, and Auditing

Table of Entities and Activities

Task:

Denmark Corporation sells computer equipment to businesses in the western region of the United States. Each month, the IT division at Demark Corporation prints monthly statements and sends them to the accounts receivable (AR) department, where a clerk mails them to the customers. This corporation’s customers mail their payments back to Denmark, where a clerk in AR batches the checks and sends them to the cashier. The AR clerk then uses the payment stub to enter the payments into the computer, where the AR master data are updated to record the payment. Please use this to complete the diagrams and charts below.

Problem 1. Please create a table of entities and activities
Problem 2. Draw a context diagram to support the entities in problem 1.
Problem 3. Draw a physical DFD. Please use MS products i.e. word or excel to create this diagram

Problem 4
“PCAOB Audit Standard No. 5 (AS5) paragraph 37 and Statement on Auditing Standard Section 319 (AU 319) paragraph 75 suggest that management, business process owners, and auditors prepare and analyze systems documentation to understand the flow of transactions through a process and to identify and assess the effectiveness of the design of internal controls. However, organizations, internal audit departments, and public accounting firms have developed their own methods for documenting systems. Therefore, I am not going to learn to prepare systems documentation until I know exactly what technique I will need to use in my job.” Do you agree?

Objective: Discuss fully. Please include in your discussion how mapping business processes helps in analyzing the auditing process of understanding your client’s business.  Please include references and opinion should cover at least two paragraphs.

Problem 5
At Resource Grocery, shoppers unload their groceries for a sales clerk to process to receive payment. The sales clerk enters the sale in a cash register and puts the money in the register drawer. At the end of the day, the sales clerk gives the cash and the register tape to the cashier. The cashier reconciles to make sure all funds are accounted for. Please create a table for the process and provide a diagram of the table.