Question

POLOS. AVF Inc. manufactures several lines of packaging equipment. The company considers product reliability and outstanding customer service to be critical to its success. The customer service department is responsible for: Providing prospective customers with product infor- mation. Monitoring spare parts availability. Providing equipment operating and maintenance information to customers. Developing and delivering customer training courses. Responding to customer complaints and making service calls Handling customer warranty claims. Maintaining good customer relations. had ced The company recently made a sizeable investment to upgrade its customer service department computer system. The upgrade is expected to improve opera- tional efficiency and customer satisfaction. The out- puts of the new system include management reports used to monitor performance in the areas listed above. The audit committee has asked the internal audit function to audit the operational effectiveness and efficiency of the customer service department. This engagement covers the following areas: Security of assets, including information. Compliance with applicable laws and company policies. Reliability of financial records. Effectiveness of performing assigned responsibilities. Valuation of the spare parts inventory. a. Discuss why each of the five areas specified by the audit committee may or may not be appro- an- ays- old tory on in- rge priate for this assurance engagement. CONDUCTING THE ASSURANCE ENGAGEMENT 13-53

Answer 1

a. The areas specified by the audit committee may not be appropriate since the engagement does not cover the main area of audit of the computer information system which it has recently upgraded to. The audit must cover the efficiency before the upgradation and post it to understand if the system is serving its intended purpose. The areas to be covered must include the customer feedback , the problems faced by the customers and the means to resolve the same and efficiency of the customer service department.