Reference no: EM133452

Question :

Conducting the Assurance Engagement

AVF Inc. manufactures various 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:

• Give prospective customers with product information
• Monitoring spare parts accessibility
• Providing equipment operating and maintenance information to customers
• Delivering and developing customer training courses
• Responding to customer complaints and making service calls
• Handling customer warranty claims
• Maintaining good customer relations

The company currently made a sizable investment to upgrade its customer service department computer system. The upgrade is expected to enhance customer satisfaction and operational efficiency. The outputs of the new system add management reports used to monitor performance in the areas listed above. The audit committee has asked the internal audit function to perform an audit of the operational effectiveness and efficiency of the customer service department that covers the subsequent areas:

• Security of assets adding information
• Compliance with applicable laws and company policies
• Reliability of financial records
• Usefulness of performing assigned responsibilities
• Valuation of spare parts inventory

Required: Show why each of the five areas specified by the audit committee may or may not be suitable for this assurance engagement.