Audit Memo for U of Phoenix - Acc491

To: Audit File

CC: Professor Santos Alarcon, Jr.

From: D Team

Date: 6/2/2014

RE: Apollo Accounting and Control Systems: Revenue and Collection Cycle

Objectives:

The control procedures for Apollo (“the Firm”) were tested by auditors to obtain control evidence about the validity, accuracy, authorization, and proper recording of the recorded sales per the Firm. In addition to already mentioned, the accuracy of sales via their classification to particular customer accounts receivables was tested by members of the audit team.

Furthermore, the accounting and IT systems were tested for authorization, segregation of duties and control, information processing controls (for example; general, application, and controls over the financial reporting process, physical controls, performance reviews, and controls over management discretion in financial reporting).

The objective of the audit for the Firm’s accounting and control systems was to perform auditing to a level that provides assurance to users of the financial statements about errors and fraud in the relevant accounts. The audit team used a sample of transactions (which was done in accordance with audit standards)

Results:

In accordance with audit standards recognized by relevant accounting agencies and oversight, the YE 2007 revenue cycle test of internal controls found 51 deviations in a total sample size of 120. Fifteen of the deviations, as a consequence, resulted in credit memos related to inaccurate pricing or quantities that were billed to customers. An additional note is that most of the credit memos were created and handled during Q3 and that none occurred during the first half of the fiscal year.

Thirty-one of the deviations were found to not have any credit approval. Out of the thirty-one, ten were found to be outstanding at the time of audit. All invoices that remained outstanding without any credit approval totaled over US$27,000,000.

The audit also found several bills of lading that were...