Matakuliah
Tahun
: Manajemen Kinerja Sistem Komputer
: Feb - 2010
05. Analytical Monitoring
Business Operations Analysis
and Account Modeling Procedures
Pertemuan 09-10
05. Analytical Monitoring Business Operations Analysis
and Account Modeling Procedures
01. Analytical Monitoring Concepts
Figure 5.1
Figure 5.1 diagrams analytical monitoring
procedures and shows the relation of each of
the expectations and consistency bases to the
account balance being considered.
The auditor/ Analyst applying analytical monitoring faces four
possible outcomes depending on whether he or she decides to
investigate and the true state of an account balance or business
process.
The Auditor who decides not to investigate an account may have
– (1) correctly decided not to investigate an account that is within acceptable limits
or
– (2) made an incorrect acceptance error (by not investigating an account that is
materially misstated or an out-of-control process.
The Auditor who decides to investigate may have :
– (1) correctly decided to investigate an account that is materially misstated or
out-of-control.
– (2) made an incorrect investigation (by investigating an account that is within
acceptable limits).
Figure 5.2 shows the cross-classification of outcomes and shows the auditor subject to only one error type
for each possible decision.
Relation of analytical Monitoring to Internal
Information Risk.
• Analytical monitoring helps the internal auditor assess
the risk that material misstatement of recorded values
has occurred.
• The investigation may identify an operating problem or
changes in the environment leading to a business
process revision or revision of operating plan.
02. Business Operation Analysis
Expectations Formation
These expectation are typically base on budgeted
revenues for the period that considered planned
or projected business activities including
external events adjusted for unexpected events
that occurred during the period.
Data Consistency Analysis
•
In addition to comparing current period recorded values with expectation for
the period, the internal auditor also makes data comparisons that are
analogous to consistence checks of various health characteristics of an
individual human.
•
Related Account Comparisons
– In the absence of accounting misstatement, there are certain relations expected
between the recorded values of related accounts of a healthy business.
– For example, many companies follow a pricing policy that marks up cost of
inventory to determine a selling price, implying a relation between sales and cost of
sales.
– Similarly, firms have a target rate of inventory turnover implicit in their policies of
meeting customer demands at a reasonable investment in inventory.
Figure 5.3
Figure 5.3 shows the approach by diagramming
the primary operating accounts for a typical
commercial firm or operating segment.
Non-financial Comparisons
By refining original expectation based on
strategy and planning assumptions, an analyst
can isolate sources of difference in expectation
to improve expectation amounts for the current
period, and possibly identify the need to change
planning or strategic assumptions.
03. A Business Operations Analysis Example: LJ
Appliances
Figure 5.4
• Figure 5.4 shows excerpts of income statement and balance sheet
recorded values for LJ Appliances for the first quarter.
Figure 5.4 also shows comparable dollar values from the first
quarter of the prior year and the adjusted expectation for the quarter
based on the adjusted sales expectation, planned cost of sales for
the revised output level. and expected ending balance for accounts
payable and total inventory amount based on LJ's operating policies
and experience.
Business Operations Analysis
Thus, a tentative BOA conclusion is that inventory procurement performance
may be better than expected (resulting in a lower cost per unit than
planned), but inventory management needs improvement (resulting in
higher levels of inventory on-hand than planned).
Data Consistency Analysis
•
In comparing ratios of aggregate accounting numbers for LJ Appliances,
difference appear to be small.
Figure 5.5
• If account were adjusted for the ommited credit
purchase by adding $162.000 to accounts
payable and cost of sales, then the ratio would
be similar to expectations and internally
consistent, as shown in figure 5.5
Risk Assessment By Account
• The results of Business Operation Analysis and
data consistency analysis must be integrated
into an assessment of risk of accounting
misstatement for each account.
04. Account Modelling Procedures
Judgmental Method : Fifth Carolina
Bancshares, Inc
• Fifth Carolina Bancshares, inc, is publicly traded
bank holding company whose principal
subsidiary operates about 50 banks in North
Carolina and South Carolina.
Figure 5.6
Regression Analysis : Chickasaw Sales
Corp.
• Amy is the internal auditor for Chickasaw Sales
Corp. four years ago, Chickasaw installed an
improved accounting system but has continued
to use an old audit monitoring process based on
rather extensive test of details.
05. Final Review Monitoring