Question

In: Accounting

John recently graduated from the three-year accounting program at George Brown College. During his co-op term...

John recently graduated from the three-year accounting program at George Brown College. During his co-op term he worked for a small audit firm and decided to make that his career. After graduation, he was hired by Rowlands Marcellin and Khan, LLP, a national audit firm.

On starting, John spent the first day meeting the staff and partners in his office. His staff manager took John to lunch for a casual conversation. During the lunch they talked about a lot of subjects, none of which were related to auditing. After lunch, John began his training and trained the entire first week.

The second week, John went with two other staff to audit a radio station in Kingston, east of Toronto. The team stayed in a hotel for three nights and ate in restaurants. During the meals, John was eager to ask questions about the audit, but the other team members said that they did not want to talk about work. After the meal, though, both team members told John to ask anything he would like to help him understand the client better.

John completed the sections testing controls over purchases, payables, and cash disbursements. He also did work on sales and revenue. As he completed each section, his work was carefully reviewed by the Senior Associate, who had one year of experience. John was unhappy that he made so many careless mistakes, but the senior said that it was normal for a person’s first audit. His work was also reviewed by the Manager who found no additional corrections. The Manager was interested in finding out what John had learned about auditing and how it was different from his classes. John replied that the work was not as hard as he thought, but that it was much more precise. The manager told John that that had been her experience as well.

The next day, the team returned to Toronto. John’s next assignment would for a company that imported chemicals from China. John spent the rest of the week reading trade journals about chemical importing.

Required
Briefly discuss two elements of quality control in this case.

Solutions

Expert Solution

Quality of a product plays a key role in trust on outputs of the company, firms/ company has to maintain it's own quality controls which plays avital role. Where as in accounting firm, its mandatory to maintain quality of financial data presented by the firm. Following are the two elements of quality control in this case:

Assignment of Responsibilities: Responsibility for the design and maintenance of the various quality control policies and procedures has to be assigned to an appropriate individual in the firm. Making that assignment, consideration should be given to the proficiency of the individuals, and provide information about the performance of new candidate to the supervision. However, all of the firm's personnel act according to the firm's quality control policies and procedures.

Monitoring: Monitoring involves an ongoing consideration and evaluation:

a )Maintaining of proper firm's guidance materials and any practice aids.

b) Agreeing and following with the firm's policies and procedures. When monitoring, the effects of the firm's management notions and the environment in which the firm practices and its clients operations have to be considered.

John who is a new hired candidate has to be trained properly, Senior manager should assign a person who is capable to give efficient training. And his work has to be monitored for few days before sending outputs to the clients. Firstly, the person who trains new hired have to analyse the skill and assign work.

Senior management has to have proper knowledge and communication of how well he is trained and conduct an assessment before going live. mangers has to see they John should be familiar with quality control guidelines


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