9-1 Final Project Submission: Case Study Analysis AssignmentSubmit your case study analysis. It should be a complete, polished artifact containing all of the main elements of the final product. It should reflect the incorporation of feedback gained throughout the course.
9-1 Final Project Submission: Case Study Analysis Assignment Submit your case study analysis. It should be a complete, polished artifact containing all of the main elements of the final product. It sh
ACC 675 Final Project Guidelines and Rubric Overview The final project for this course is the creation of a case study analysis . You will use the article The SOX Compliance Journey at Trinity Industries as a resource for this project. Companies today must ensure that operational processes are perform ing efficiently and effectively in compliance with current regulations. Accountants must adhere to domestic standards set by organizations —such as the Public Company Accounting Oversight Board and the Financial Accounting and Standards Board —as well as glo bal standards, such as the International Financial Reporting Standards, requiring appropriate implementation and assessment o f internal controls. Whether developing appropriate processes internally or preparing substantive testing , external auditor s must b e able to quickly and completely assess the financial processes, determine weaknesses, and provide recommendations for improvement. The ability to transcribe formalized or narrative processes into functional workflows allows an auditor to identify potenti al gaps in accounting systems. These gaps can result in material audit findings necessitating changes in the company ’s control structure. However, it is not only the process and flow of transactions that requires scrutiny. Companies evolve into sophistic ated, computerized systems that require an in – depth understanding of administrative rights, electronic process flows , and end user reporting. In this case study, you will apply all of these skills in developing recommendations for Trinity Industries. Though the Sarbanes –Oxley Act of 2002 (SOX) promulgated many internal control structure changes, the company is unsure as to whether they are applying too few or too man y internal controls. Unnecessary controls place added burden on staff and cost the comp any thousands of dollars in monitoring and maintenance. Your role will be to provide an overview of the company and its market industry. From this you will formulate your processes into a comprehensive flow chart that will be used to identify gaps in proc esses and other threats to potential audit weaknesses. The project is divided in to four milestones , which will be submitted at various points throughout the course to scaffold learning and ensure quality final submissions. These milestones will be submitt ed in Modules Two, Four, Six , and Seven. The final product will be submitted in Module Nine. In this assignment , you will demonstrate your mastery of the following course outcomes: Transcribe formalized or verbal financial processes into both narrative and process flowcharts for identifying gaps resulting in potential material weaknesses Summarize advantages and disadvantages of various accounting electronic data p rocessing systems with respect to a specific industry’s needs Perform substantive testing of accounting systems to ensure processes described by management are accurately reflected within system transactions Formulate recommendations for improvements to financial processes based on outcomes of testing Assess the effectiveness of companies’ inte rnal control structures for producing accurate and reliable financial reports Interpret standards as outlined in ISACA and the Public Company Accounting Oversight Board as they relate to compliance within specific industries Prompt Your role will be to pr ovide an overview of the company and its market industry. From this, you will formulate your processes into a comprehensive flow chart that will be used to identify gaps in processes and other threats to potential audit weaknesses. By understanding the ind ustry, you will gain valuable insight into the appropriate software systems that will provide industry -specific needs and financial reporting by com paring and contrasting current electronic data p rocessing (EDP) systems with those in the marketplace. By p erforming substantive testing, you will audit the transaction flow and determine whether financial information is accurately reflected in the system transactions. This will allow for an assessment and recommendation as to the effectiveness of the company’s internal control processes, including changes in transaction processing if necessary. Finally, through interpretation of current audit and internal control standards, you will determine whether Trinity is in com pliance within the industry standards and a ligned functionally with both efficiency and effectiveness of controls. Specifically , the following critical e lements must be addressed: I. Overview To adequately prepare for the following questions, you will need to prepare an overview/assessment of Trinity Industries , including background, key market demographics, financial position, and governance policies. You are required to address the following seven subjects: a) Overview of the organization b) Size of the organization c) Sector/ industry (along with thre e other companies that would be comparable) d) Structure/ line of businesses e) Organizational structure (organization c hart) f) Yearly performance in terms of revenue (as compared with the three other companies identified) g) Management and culture ( i.e., how long has key staff been employed, stability of the company over the history, growth in industry) II. First Year of SOX Compliance a) The vice president ( VP ) and chief audit e xecutive described the company as a likely candidate for a material weakness in the first year of SOX compliance. What were the elements critical to the company’s decisive success in its first year of compliance? b) What internal controls are important for p reparing accurate and reliable financial reports? Support your response using both examples provided in the case study, as well as research into accounting standards (i.e., Public Company Accounting Oversight Board [PCAOB]). c) Define, using support from acc ounting standards or other empirical evidence, what a material weakness is in terms of SOX compliance. d) Assess, through reflection on the case study as well as the comparable industries identified in the overview, what material w eaknesses are specific to T rinity. e) Articulate standards addressed in PCAOB regarding the concept of material weaknesses in development of internal control compliance. Ensure that you demonstrate the requirements of SOX from inception in 2002. f) Describe the factors that made Trinity successful by illustrating the flow processes of the organization both in a narrative and process flowchart. III. Bottom -Up Approach a) What were the strengths and weaknesses of Trinity’s practice -based bottom -up approach? How effective was it? b) What would you recommend it should have done differently in Year 1? Defend your response. c) Compare and contrast the strengths and weaknesses of a bottom -up versus a top -down risk approach to compliance. d) Which approach is more appropriate in completing a compliance proje ct successfully for Trinity’s first year ? e) How does each approach affect a company’s internal control structure ? f) Identify the chief insights from the pilot project. How does the pilot project for the EDP syst em compare to SOX requirements? g) Identify the tes ting processes Trinity performed and whether Trinity took the appropr iate approach in designing their controls. h) Based on the substantive tests, which testing process proved to be most useful in assessi ng Trinity’s accounting system? i) Compose a short memoran dum that communicate s the results of the first year of testing along with recommendations as to what Trinity should do di fferently in subsequent years. IV. SOX -Related Expenses a) Formulate recommendations for how Trinity could further reduce SOX -related expenses in 2008. Be sure to consider the barriers the company may encounter with each of your recommendations. b) What are the major sources of cost in Trinity’s complia nce maintenance and testing? c) Rank each of the major sou rces of cost in terms of value. d) Compare the choice of Oracle as the selected software system against two other systems of comparable size and scope. Evaluate each software system’ s advantages and disadvantages. e) If you determine that another software system would have been a be tter choice through your analysis, defend the decision. If Oracle is the choice after analysis, defend that decision. V. IFRS a) What are the implications of a change in accounting standards? For example, what kinds of changes to data calculation and informatio n reporting are likely to occur with a transition to a new standard? b) What changes will be required for Trinity to improve internal control compliance? c) What standards will affe ct Trinity as a result of IFRS? d) Discuss each infrastructure’s role is in supporti ng a compliance project like IFRS: 1. What constitutes Trinity’s g overnance infrastructure ? 2. What constitutes Trinity’s IT infrastructure ? 3. What constitutes Trinity’s p rocess infrastructure ? Milestones Milestone One : Company Overview Report (Section I) In Module Two , you will submit an overview of Trinity Industries. Provide an overview of the company and its market industry. Include background, key market demographics, financial position, and governance policies in your company overview. By understanding t he industry, you will gain valuable insight into the appropriate software systems that will provide industry -specific needs and financial reporting necessary . This milestone will be graded with the Milestone One Rubric. Milestone Two : First Year of SOX Compliance (Section II) In Module Four , you will submit an analysis of Trinity Industries’ first year of SOX compliance . The VP and chief audit e xecutive described the company as a likely candidate for a material weakness in the first year of SOX complianc e. What were the elements critical to the company’s decisive success in its first year of compliance? Define a material weakness and explain the material weaknesses that are specific to Trinity. Describe the factors that made Trinity a success by illustrat ing the flow processes of the organization both in a narrative and process flowchart. This flowchart will be used to identify gaps and other threats to potential audit weaknesses. This milestone will be graded with the Milestone Two Rubric. Milestone Thr ee : Comparative Systems Report (Sections III and IV) In Module Six , you will submit a draft of your comparative systems report . Compare and contrast current EDP systems used by Trinity Industries with those in the marketplace. Using substantive testing, audit the transaction flow and determine whether financial information is accurately reflected in the system transactions. This will allow for an assessment and recommendation as to the effectiveness of the company’s internal control processes, inc luding c hanges in transaction processing if necessary. Compose a short memorandum that communicate s the results of the first year of testing along with recommendations as to what Trinity should do differently in subsequent years , including recommendations for redu cing SOX -related expenses. This milestone will be graded with the Milestone Three Rubric. Milestone Four : IFRS Report (Section V) In Module Seven , you will submit a draft of your IFRS report. You will determine whether Trinity is in compliance within the industry standards and aligned functionally with both efficiency and effectiveness of controls through the use of current audit and internal control standar ds. State all assumptions and conclusions. This milestone will be graded with the Milestone Four Rubric. Final Submission : Case Study Analysis In Module Nine , you will submit your case study analysis . It should be a complete, polished artifact containing all of the main elements of the final product. It should reflect the incorporation of feedback gained throughout the course. This submission will be graded using the Final Proje ct Rubric. Deliverables Milestone Deliverable Module Due Grading One Company Overview Report (Section I) Two Graded separately; Milestone One Rubric Two First Year of SOX Compliance (Section II) Four Graded separately; Milestone Two R ubric Three Comparative Systems Report (Section s III and IV) Six Graded separately; Milestone Three Rubric Four IFRS Report (Section V) Seven Graded separately; Milestone Four Rubric Final Submission: Case Study Analysis Nine Graded separately; Final Proje ct Rubric Final Proje ct Rubric Guidelines for Submission: Your case study analysis (including flowcharts and memo) should be 10 –12 pages, double -spaced, with one -inch margins, 12 -point Times New Roman font, and APA format . Critical Elements Exemplary Proficient Needs Improvement Not Evident Value Overview Meets “Proficient” criteria and uses industry -specific language to establish expertise (100%) Prepares a comprehensive overview (90%) Prepares an overview but overview is cursory or lacks detail (70%) Does not prepare an overview (0%) 5 First Year of SOX Compliance : Success Meets “Proficient” criteria and determination is well -supported with concrete examples (100%) Accurately determines elements critical to the company’s success in its first year of compliance (90%) Determines elements critical to the company’s success in its first year of compliance but determination contains inaccuracies (70%) Does not determine elements critical to the company’s success in its first year of compliance (0%) 5 First Year of SOX Compliance : Internal Controls Meets “Proficient” criteria and uses industry -specific language to establish expertise (100%) Discusses which internal controls are important for preparing financial reports and supports response with examples from the case study and research into PCAOB (90%) Discusses which internal controls are important for preparing financial reports and supports response with examples from the case study and research into PCAOB but support is weak , illogical , or does not use further rese arch (70%) Does not discuss which internal controls are important for preparing financial reports (0%) 5 First Year of SOX Compliance : Material Weakness Meets “Proficient” criteria and definition is exceptionally clear and contextualized (100%) Defines what a material weakness is in terms of SOX compliance using support from accounting standards or other empirical evidence (90%) Defines what a material weakness is in terms of SOX compliance using support from accounting standards or other empirical evide nce but support is weak (70%) Does not define what a material weakness is in terms of SOX compliance using support (0%) 3 First Year of SOX Compliance : Specific Meets “Proficient” criteria and shows keen insight into the types of material weaknesses (100 %) Assesses which material weaknesses are specific to the company through a reflection on the case study and comparable industries identified in the overview (90%) Assesses which material weaknesses are specific to the company through a reflection on the case study and comparable industries identified in the overview but assessment is cursory or contains inaccuracies (70%) Does not assess which material weaknesses are specific to the company (0%) 5 First Year of SOX Compliance : PCAOB Meets “Proficient” c riteria and shows keen insight into SOX requirements (100%) Articulates standards addressed in PCAOB regarding the concept of material w eaknesses in development of internal control compliance and ensures demonstration of the requirements of SOX from inception in 2002 (90%) Articulates standards addressed in PCAOB regarding the concept of material weaknesses in development of internal control compliance but does not ensure demonstration of the requirements of SOX from inception in 2002 (70%) Does not articulate standards addressed in PCAOB regarding the concept of material weaknesses in development of interna l control compliance (0%) 3 First Year of SOX Compliance : Factors Meets “Proficient” criteria and both artifacts are exceptionally clear and contextualized (100%) Describes the factors that made Trinity successful by illustrating the flow processes of th e organization both in a narrative and process flowchart (90%) Describes the factors that made Trinity successful by illustrating the flow processes of the organization both in a narrative and process flowchart but one or both lack detail or contain inaccu racies (70%) Does not describe the factors that made Trinity successful (0%) 5 Bottom -Up Approach : Strengths and Weaknesses Meets “Proficient” criteria and determination is well -supported with concrete examples (100%) Determines the strengths and weaknesses of the bottom -up approach and its effectiveness (90%) Determines the strengths and weaknesses of the bottom -up approach and its effectiveness but determination is cursory or contains inaccuracies (70%) Does not determine the strengths and weakne sses of the bottom -up approach (0%) 5 Bottom -Up Approach : Recommend Meets “Proficient” criteria and recommendation uses industry – specific language to establish expertise (100%) Formulates a recommendation concerning what the company should have done differently in Year 1 and defends response (90%) Formulates a recommendation concerning what the company should have done differently in Year 1 but does not defend response or defense is weak or illogical (70%) Does not formulate a recommendation concerning what the company should have done differently in Year 1 (0%) 3 Bottom -Up Approach : Top -Down Meets “Proficient” criteria and demonstrates a nuanced understanding of the differences between the two approaches (100%) Compares and contrasts the strengths and weaknesses of a bottom -up versus a top -down risk approach to compliance (90%) Compares and contrasts the strengths and weaknesses of a bot tom -up versus a top -down risk approach to compliance but with gaps in accuracy or detail (70%) Does not compare and contrast the strengths and weaknesses of a bottom -up versus a top – down risk approach to compliance (0%) 3 Bottom -Up Approach : Compliance Pr oject Meets “Proficient” criteria and determination is well -supported with concrete examples (100%) Accurately determines which approach is more appropriate in completing a compliance project successfully for Trinity’s first year (90%) Determines which approach is more appropriate in completing a compliance project successfully for Trinity’s first year but is inaccurate in determination (70%) Does not determine which approach is more appropriate in completing a compliance project successfully for Trinity’s first year (0%) 3 Bottom -Up Approach : Internal Control Structure Meets “Proficient” criteria and demonstrates a nuanced understanding of i nternal control structures (100%) Accurately assesses how each approach affects a company’s internal control structure (90%) Assesses how each approach affects a company’s internal control structure but assessment is cursory or contains inaccuracies (70%) Does not assess how each approach affects a company’s internal control structure (0%) 5 Bottom -Up Approach : Chief Insights Meets “Proficient” criteria and demonstrates a nuanced understanding of SOX requirements (100%) Identifies the chief insights from the EDP system’s pilot project and how the project compares to SOX requirements (90%) Identifies the chief insights from the EDP system’s pilot project but does not identify how the project compares to SOX requirements or identification is incorrect (70%) Does not identify the chief insights from the pilot project (0%) 3 Bottom -Up Approach : Testing Processes Meets “Proficient” criteria and supports claims with examples (100%) Identifies the testing processes Trinity performed and whether Trinity took the appropriate approach in designing their controls (90%) Identifies the testing processes Trinity performed but does not identify whether Trinity took the appropriate approach in designing their controls or testing processes identified are inaccurate (70%) Does not identify the testing processes Trinity performed (0%) 5 Bottom -Up Approach : Most Useful Meets “Proficient” criteria and provides relevant examples (100%) Determines the most useful testing process based on the substantive tests (90%) Determines the most useful testing process but does not base determination on the substantive tests (70%) Does not determine the most useful testing process (0%) 5 Bottom -Up Approach : Results and Recommendations Meets “Proficient” criteria and uses industry -specific language to establish expertise (100%) Composes a memo that communicates the results for the first year and includes recommendations (90%) Composes a memo that communicates the results for the first year and includes recommendations but m emo is cursory or lacks detail (70%) Does not compose a memo (0%) 3 SOX -Related Expenses : Further Reduce Meets “Proficient” criteria and shows keen insight into potential barriers related to SOX (100%) Formulates recommendations for how Trinity could further reduce SOX -related expenses in 2008 and considers the barriers they may encounter (90%) Formulates recommendations for how Trinity could further reduce SOX -related expenses in 2008 but does not consi der the barriers they may encounter or recommendations are illogical (70%) Does not formulate recommendations for how Trinity could further reduce SOX -related expenses in 2008 (0%) 3 SOX -Related Expenses : Major Sources of Cost Determines the major sources of cost in Trinity’s compliance maintenance and testing (100%) Determines the major sources of cost in Trinity’s compliance maintenance and testing but determination contains inaccuracies (70%) Does not determine the major sources of cost in Trinit y’s compliance maintenance and testing (0%) 5 SOX -Related Expenses : Rank Accurately ranks each of the major sources of cost in terms of value (100%) Ranks each of the major sources of cost in terms of value but contains inaccuracies (70%) Does not rank each of the major sources of cost in terms of value (0%) 3 SOX -Related Expenses : Software System Meets “Proficient” criteria and shows a nuanced understanding of the various types of software systems available (100%) Compares Oracle as the selected software system against two other systems by evaluating each system’s advantages and disadvantages (90%) Compares Oracle as the selected software system against two other systems by evaluating each system’s advantages and disadvantages but evaluation is cu rsory or contains inaccuracies (70%) Does not compare Oracle as the selected software system against two other systems (0%) 3 SOX -Related Expenses : Defense Meets “Proficient” criteria and provides relevant examples to support decision (100%) Defends the decision of the software choice based on the analysis (90%) Defends the decision of the software choice but does not base defense on the analysis (70%) Does not defend the decision of the software choice (0%) 3 IFRS : Change Meets “Proficient” criteria and is well -supported with concrete examples (100%) Discusses the implications of a change in accounting standards (90%) Discusses the implications of a change in accounting standards but discussion is cursory or contains inaccuracies (70%) Does not discuss the implications of a change in accounting standards (0%) 3 IFRS : Improve Meets “Proficient” criteria and provides relevant examples to support determination (100%) Determines changes required to improve internal control compliance (90%) Determin es changes required to improve internal control compliance but determination is cursory or contains inaccuracies (70%) Does not determine changes required to improve internal control compliance (0%) 3 IFRS : Standards Meets “Proficient” criteria and provides relevant examples to support determination (100%) Determines which standards will affect Trinity as a result of IFRS (90%) Determines which standards will affect Trinity as a result of IFRS but determination is cursory or contains inaccuracies (70 %) Does not determine which standards will affect Trinity as a result of IFRS (0%) 3 IFRS : Role Meets “Proficient” criteria and uses industry -specific language to establish expertise (100%) Discusses the role of the three groups in supporting a compliance project like IFRS (90%) Discusses the role of the three groups in supporting a compliance project like IFRS but discussion is cursory , contains inaccuracies , or does not discuss all three groups (70%) Does not discuss the role of the three group s in supporting a compliance project like IFRS (0%) 3 Articulation of Response Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy -to-read format (100%) Submission has no major errors related to citations, grammar, spelling, syntax, or organization (90%) Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas (70%) Subm ission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas (0%) 5 Earned Total 100%
9-1 Final Project Submission: Case Study Analysis Assignment Submit your case study analysis. It should be a complete, polished artifact containing all of the main elements of the final product. It sh
Running Head: TRINITY INDUSTRIES INC 1 Trinity Industries Inc Yvonne Saunders=Batchue Southern New Hampshire University Overview of Trinity Industries Inc. Trinity Industries Inc. is an American international company that mainly trades in the New York Stock Exchange. Founded in Dallas, Texas, the company still has its headquarters there up to date. This organization was initiated in 1958 following a union between Dallas Tank and Trinity Steel. The company hired W Ray Wallace in 1946, as its first engineer Chief Executive Officer of which he served for forty (Schultze, 2011). In 1987, the organization was transformed to be a Delaware corporation with its headquarters situated in Dallas, Texas. The organization offers numerous products and service for different economic sectors in the united states and internationally, such as for transportation, energy, constructor as well as chemical. Additionally, Trinity industries provide other product and services ranging from highway products, aggregates, storage services, barges, containers distribution, windmill towers and railcar parts, utility structures, as well as management, and maintenance services. (Trinity Industries, Inc, n.d.) The size of Trinity industries Trinity Industries is recognized as a large company with close to 22,030 employees hired on a full-time basis all its business entities. As of August 21st, 2016, Trinity Industries has a market cap of 3.76 Billion, Enterprise Value of 5.08 Billion and currently trading at a share price of $24.67 (Yahoo Finance). The organization is divided into five business segments. Trinity’s Rail Group, Trinity’s Railcar Leasing and Management Services Group, Trinity’s Inland Barge Group, Trinity’s Energy Equipment Group and Trinity’s Construction Products Group Sector/Industry Trinity Industries is a diversified industry with its core business segments focusing on a variety of market-leading railroad, energy, transportation, and other construction sectors. The primary industry it specializes in is the Railroads. As per Trinity Industries 2015 annual report, the following are the variety of business sector the company specialize Railcars and railcar parts Parts and steel components; The leasing, management, and maintenance of railcars’ Highway products; Aggregates Inland barges; Structural wind towers; Steel utility structures; Storage and distribution containers; and Trench shields and shoring products Structure/Line of Business As mentioned above, Trinity Industries is divided into five business groups. Rail Group – Manufacturer of freight and tank railcars Railcar Leasing and Management Service Group – Offers operating leases for tank and freight railcars. Construction Products Group – Manufactures highway products, steel for infrastructure, mines, and aggregates. Energy Equipment Group – Manufactures structural wind tower, storage containers and utility steel structure for electricity transmission and distribution. Inland Barge Group – Manufactures inland barges and fiberglass barge covers. Trinity Industries Structure (Retrieved from The Official Board) Yearly performance in terms of revenue Income Statement (Data retrieved from Yahoo Finance) All figures are in thousands Revenue, 12/31/2015, 12/31/2014, 12/31/2013 Total Revenue, 6,392,700, 6,170,000, 4,365,300 Cost of Revenue, 4,656,200, 4,619,800, 3,322,300 Gross Profit, 1,736,500, 1,550,200, 1,043,00 Trinity Industries has had a steady increase in revenue over the years. As per Trinity Industries financial report, revenue increased by 3.6% in 2015 from the previous year, mostly because of higher shipment volume and pricing. Trinity experienced a massive increase in sales in 2014 from last year. The revenue increased by 41.3% percentage primarily because of the top shipment volume and expand on the overall demand for Rail Group, Construction, Inland Barge and Energy equipment products (Trinity Industries, Inc, n.d.). Trinity Industries Management and Culture Trinity Industries’ management and culture are mainly driven by solid values, operational flexibility, entrepreneurialism, loyalty, continuous improvement, motivated attitude, operational experience, collaboration, result-oriented, leveraging strengths as well as strong work ethic. (Industries, n.d.). In his letter public to the company’s career website, the Chief Executive Officer Mr. Timothy R. Wallace illustrates how the organization embraces change and high reward progressive initiatives. He further explained how the company offers many opportunities for career advancement as well as diversity. References Schultze, U. (2011, October 4). The Sox Compliance journey at Trinity Industries. Retrieved August 21, 2016, from Journal of Information Technology Cases, https://bb.snhu.edu/bbcswebdav/pid-1378078-dt-announcement-rid-38222876_1/courses/ACC-675-X5049_16TW5/The%20SOX%20Compliance%20journey%20at%20Trinity%20Industries.pdf In-line TRN profile | Trinity Industries, Inc. Common stock – Yahoo finance. Retrieved August 21, 2016, from Yahoo Finance, https://finance.yahoo.com/quote/TRN/profile?p=TRN Trinity Industries, Inc. 2015 annual report. Retrieved August 21, 2016, from Trinity Industries yearly report 2015, http://trinityindustries.com/AnnualReport.pdf In-line Org chart Trinity Industries. (2016, June 6). Retrieved August 22, 2016, from The Official Board, http://www.theofficialboard.com/org-chart/trinity-industries In-line Industries, T. TRINITY CAREERS. Retrieved August 22, 2016, from https://www.trinitycareers.com/ourculture/cultural-characteristics
9-1 Final Project Submission: Case Study Analysis Assignment Submit your case study analysis. It should be a complete, polished artifact containing all of the main elements of the final product. It sh
ANALYSIS 6 Milestone Two: The First of SOX Compliance Name: Yvonne Saunders- Batchue Southern New Hampshire University Date: September 5, 2019 The vice president (VP) and chief audit executive described the company as a likely candidate for a material weakness in the first year of SOX compliance. What were the elements critical to the company’s decisive success in its first year of compliance? Compliance with Sox may be a disgusting job for companies. The Sarbanes – Oxley 302, 401,404, 409 and 802 sections are one of the most relevant sections of the Compliance Act. The financial sector from the whole company division was merged into one centralized reporting centre during the first year of enforcement by Trinity. Oracle financials substituted Trinity’s four overall packages, and Trinity’s annual compliance cost of 0,5 million SOXs is predicted to be saved from the project (Schultze, 2011). The creation of the accounting service center was also a main factor in Trinity’s first year of implementation. The design of ASC provides routine, organizational and centralized facilities for large-scale transaction handling such as accounting, payroll and AP (Schultze, 2011). Define a material weakness and explain the material weaknesses that are specific to Trinity. In the case study and accounting norms studies (e.g. the Public Company Accounting Oversight Board (PCAOB)). As stated, Section 302 deals with’ Corporate Financial Reporting Responsibility’ and inner inspection accreditation. The evaluation of inner checks is listed in Section 404. Important inner checks are followed to prepare precise and credible financial reports. Policy and processes for the suitable division of responsibilities to minimize the probability of fraud occurring deliberately Employees trained to carry out their tasks Sound practice for staff to carry out their responsibilities and functions A scheme which guarantees that financial operations are authorized and recorded properly Describe the factors that made Trinity a success by illustrating the flow processes of the organization both in a narrative and process flowchart. Trinity has succeeded primarily in complying with SOX by initiating an early attempt to correct its economic reporting schemes. Every company unit worked separately and independently before the correction. Trinity management quickly noticed that there was a need for further formality and merged its 22 company units into one company system. From that stage on, the leadership of Trinity has been prepared to evaluate present controls and verify whether these controls comply with SOX. The factors which made the Trinity to successful in SOX References Sarbanes-Oxley compliance. (2003). Retrieved September 4, 2016, from Sarbanes-Oxley Compliance, SARBANES-OXLEY ACT 2002 Schultze, U. (2011, October 04). The Sox Compliance journey at Trinity Industries. Retrieved September 5, 2016, from Journal of Information Technology Cases, https://bb.snhu.edu/bbcswebdav/pid-1378078-dt-announcement-rid-38222876_1/courses/ACC-675-X5049_16TW5/The%20SOX%20Compliance%20journey%20at%20Trinity%20Industries.pdfIn-line The Importance of Internal Controls in Financial Reporting and Safeguarding Plan Assets. Retrieved September 5, 2016, from aicpa.org, http://www.aicpa.org/InterestAreas/EmployeeBenefitPlanAuditQuality/Resources/PlanAdvisories/DownloadableDocuments/Plan_AdvisoryInternalControls-lowres.pdfIn- SOX 404 guide: Beginning your evaluation: Step 3. Retrieved September 5, 2016, from SEC, https://www.sec.gov/info/smallbus/404guide/evaluation3. “SOX 404 guide Auditing standard no. 5. (2010, April ). Retrieved September 6, 2016, from PCAOB, https://pcaobus.org/Standards/Auditing/Pages/Auditing_Standard_5.aspxIn-
9-1 Final Project Submission: Case Study Analysis Assignment Submit your case study analysis. It should be a complete, polished artifact containing all of the main elements of the final product. It sh
TRINITY Trinity Companies Yvonne Saunders-Batchue Southern New Hampshire University September 19, 2019 Bottom-Up Approach What were the strengths and weaknesses of Trinity’s practice-based bottom-up approach? How effective was it? When it comes to a bottom-up approach when you progress from the smaller or the subordinate to the large or the more vital levels for controlling, most of the time in the organization. By the use of that form of management or the other processes which are implied, they require pre-emptive collection being involved in the whole process of development. For the bottom-up approach in most parts is strong in the flexibility, in agility, collaborating besides having higher motivation. For this approach it is the most effective when we have all members contributing to flow process. For each process in the planning then efficient goals have to be communicated. These goals are known as milestones and they measure effectiveness of the project. All members are empowered to be able to think creatively through this process and all the suggestions are acknowledging and some of them are being implemented within process flow. Through this process Trinity got advantage from collaboration of the team for every level indulging smorgasbord for the information and input. The bottom-up approach also permits readiness in the early stage for planning and implementing (Schultz, 2011). b) What would you recommend it should have done differently in Year 1? Defend your response. In the first year, I would recommend the use of the collaborative approach for determining the best practice in the implementation of the new SOX agreements. Training of the employees in the manner which will allow the interaction of the formal levels in the firm. In the case of building the Team it requires all the levels for employment to interacting in best practices, Trinity should use the approach to implementing of new processes as well as carrying out of the regulations and the effectiveness for SOX. All the employees should have equal participation in the SOX compliance together with equal opportunity in the creative participation (Schultz, 2011). c) Compare and contrast the strengths and weaknesses of a bottom-up versus a top-down risk approach to compliance. For every approach, it has got unique qualities which make it be effective in the management. For the Top-Down Managing, it is more traditional in the approach while for the Bottom-Up Management it is contemporary. Flexibility: Advantage: For the Bottom-up approach methodology it has got elasticity where all the members freely make choices and participate. In the case of the Top-down approach, it usually comes without the rejection decision on the process which has already been determined and that has been approved, this makes the time for processing to be shorter. Disadvantage: For the Top-down approach methodology it could be stagnant in the creativity, management usually communicates procedures for collaboration. On Bottom-up approach it could be limited in the approval; the upper level for buy-in could suffer in the approach Agility Disadvantage: For a Top-down approach, it is usually without suppleness and it usually lacks the responsiveness. This approach could be out of touch. Advantage: For Bottom-up approach the team member’s creativity and the alertness in the planning. d) Which approach is more appropriate in completing a compliance project successfully for Trinity’s first year? To be able to complete compliance project in the first year, organization has to adopt the bottom-up approach because this method is friendly to the organization and there are no future challenges fo the productivity of the employees in the organization. e) How does each approach affect the company’s internal control structure? In bottom-up approach, it usually gives organization for effective internal control structures as it is developing a management password for users of network and they are stored in a logical manner. The entire organization could have employees passwords and the data stored in a good way (Turner,2014).For the top-down approach it offers the passwords and the control for the limited number of users in first phase for implementation, this approach doesn’t consider security and the needs for entire organization but for a single group (Schultz,2011). f) Identify the chief insights from the pilot project. How does the pilot project for the EDP system compare to SOX requirements? Pilot project for the company is aimed at making the firm to have greater compliance with SOX recommendations; hence management and internal control systems are the top priority for ensuring that they are in perfect coherence with regulations. Internal audit system was established and the functions were divided in accordance to what the group can do. The company also ensured that they are in coherence with SOX regulations by making where each of the files is protected and have got effective auditing systems and there is a single accounting center for the whole firm (Schultz, 2011). g) Identify the testing processes Trinity performed and whether Trinity took the appropriate approach in designing their controls. For the company it carried out testing of their processes and conformity for employees to processes which the. Various modes used in testing of organization reveal weaknesses which have been experienced thus giving organization the chance for working ameliorating weaknesses and improvement on deficiencies. Controls for the firm were designed in last phase. Though for first phases of control they were not that efficient as we had multiple accesses and data might have tampered within an easy way. Through improvement in controls it gave the company sufficient platform for working on the privacy (Schultz, 2011). h) Based on the substantive tests, which testing process proved to be most useful in assessing Trinity’s accounting system? Analytical tests which are conducted by auditing were helpful to the company. The reason for this is that the scrutinized values for transactions and financial records for the company for seeing the outcome. Through the testing system, it was very efficient in making companies beware on how they can deal with the accounting system (Schultz, 2011). i) Compose a short memorandum that communicates the results of the first year of testing along with recommendations as to what Trinity should do differently in subsequent years. To: Employees CC: Management of Trinity Industries From: HR, Trinity Industries Subject: SOX Compliance Testing Since the SOX Compliance was introduced to the company, in the first year we have had a great improvement. This has been so because of the efforts for cooperation from all corners of the company, management, and staff members. In addition, I would like to recommend company for trying different approaches in the handling for the subsequent years. This is the only way for ensuring employees are not tired of doing their normal routine. In order to ensure this a team will be formed where each of the members of the team is given specific time limit for carrying out projects. This will particularly ensure that the organization continues to move in a positive direction. Am encouraging you to participate in the team-building exercises which will be of great benefit for the organization. Sincerely, HR, Trinity Industries. SOX-Related Expenses a) Formulate recommendations for how Trinity could further reduce SOX-related expenses in 2008. Be sure to consider the barriers the company may encounter with each of your recommendations In order to be able to reduce the costs in the coming year, the firm has to change from the use of manual controls to the digital ones. This usually makes the organization to have the opportunity for working on the flexible schedule and also presenting solutions for various accounting difficulties which they had in the past. Consequently, using the digital systems make organization be at par with rest and it also saves labor charges as digital machines they are usually time-efficient hence employees will not require more time to work on them (Schultz,2011). b) What are the major sources of cost in Trinity’s compliance maintenance and testing? Compliance maintenance and testing have been costly to the company. The major source of income for the company was from the sales which were made, profits and the revenues which were acquired during sales. More so,the costs which were used in financing organization throughout the changing process and also purchasing of equipment’s which were important to the organization (Schultz,2011). c) Rank each of the major sources of cost in terms of value. Resources which were used by the company had value acceptance on them. Income for the organization meant greater value; it was followed by the profits made and revenue which was gotten by the company from the sales which were made (Schultz, 2011). d) Compare the choice of Oracle as the selected software system against two other systems of comparable size and scope. Evaluate each software system’s advantages and disadvantages. The sales management software to be used was oracles which are effective in the offering various solutions to the company compared with the other software are which are in the market. It also offers solution for best sales solution. The sales force is one of the programs like oracle. The main advantage of this software is that it has the ability to work on sales of the company and it easily draws transactions inefficient way, though the software doesn’t have customer management platform as compared with oracle system.Moreso, Rimini is presenting advantages that are close to oracle advantage and it has got an effective mobile UI.This software doesn’t have effective predictive analytics like the ones for oracle which could help in creating good sales workforce. e) If you determine that another software system would have been a better choice through your analysis, defend the decision. If Oracle is the choice after analysis, defend that decision. Oracle is one of the best software’s to be adopted by the company. The main reason is that this program offers a range of benefits and it comes with sufficient space for storage in a cloud system that enables the company to store unlimited data. This software has to be maintained by the organization. References: Schultz, U.(2011).The SOX Compliance Journey at Trinity Industries. Journal for information technology teaching cases. Turner, J.(2014)Handbook for project-based management. McGraw-Hill. Wang, M.(2005).AHP-based approach of ERP system selection. International journal for production economics.
9-1 Final Project Submission: Case Study Analysis Assignment Submit your case study analysis. It should be a complete, polished artifact containing all of the main elements of the final product. It sh
Trinity’s Compliance Report Yvonne Saunders-Batchue Southern New Hampshire University September 27, 2019 Trinity’s Compliance Report A change in accounting standards will require disclosure in the financial statements. Financial Statement users are to be aware of the change and its impact on the accuracy of the financial reports. A change in accounting standard has to be applied consistently for all future transactions. The IFRS suggest that a change in accounting standards should be applied retrospectively (Christensen, Lee, Walker & Zeng, 2015). That implies that the application of the new standard should be reflected in the equity balance in the earliest period presented. The retrospective application will be included in all prior periods included in the current financial statements. The change will impact equity balances and will alter the differed tax obligations for the company. Trinity industries will improve its internal control compliance if it analyses the difference between GAAP requirements and IFRS requirements. The presence of an internal control management team is critical in enhancing compliance. The staff should be aware of the internal control implications when switching the accounting standards. It is also necessary to continually monitor and assess internal control risks. Trinity industry should also create an internal control environment that cherishes integrity and openness. The internal control team should always have open communication with the management to improve the processes. The internal and external auditors should also provide reports on the efficiency of Trinity’s internal controls (Kelly & Tan, 2017). Audit reports will point out weaknesses in the system that the company can improve. The auditors and the internal control team should also be allowed to work independently without management interference. The IFRS and IAS standards will affect Trinity Industries when it changes its rules. The IFRS move will predominantly depend on the recommendations stipulated in IFRS 1. IFRS 1 provides the First Time Adoption of the standards in the general adoption for consistency (Fiechter, Halberkann & Meyer, 2018). That will necessitate the retrospective application of some of the rules such as they relate to revenue, asset, liability, and equity recognition. Some of the GAAP regulations will not necessarily change, but the name of the accounting standards will move to those presented in the IFRS. Trinity’s governance infrastructure mainly consists of the governance steering committee and the financial controls in place. The governance structure was instituted to ensure that Trinity complies with the SOX requirements. IT infrastructure includes all the technical aspects that integrate the reporting and control processes. The governance steering committee coordinates with the IT personnel to make changes in the IT infrastructure. That includes any changes to the automated and manual control processes in terms of access and authentication. Trinity’s operations comprise of all the events that occur from inventory acquisition to the sale of a product. Internal control has to monitor the credibility of all the processes to guarantee compliance. References Christensen, H. B., Lee, E., Walker, M., & Zeng, C. (2015). Incentives or standards: What determines accounting quality changes around IFRS adoption?. European Accounting Review, 24(1), 31-61. Fiechter, P., Halberkann, J., & Meyer, C. (2018). Determinants and consequences of a voluntary turn away from IFRS to local GAAP: Evidence from Switzerland. European Accounting Review, 27(5), 955-989. Kelly, K., & Tan, H. T. (2017). Mandatory management disclosure and mandatory independent audit of internal controls: Evidence of configural information processing by investors. Accounting, Organizations and Society, 56, 1-20.
9-1 Final Project Submission: Case Study Analysis Assignment Submit your case study analysis. It should be a complete, polished artifact containing all of the main elements of the final product. It sh
Feedback for 2-2 Final Project Milestone One: Company Overview Report Submission Feedback Articulation of Response: Yvonne, the financial information you provided was very helpful. Great information on the organizational structure via the chart you included. Thank you for submitting in such a timely manner. Just make sure to place sources in alphabetical order. Overall Feedback Score 49.5 / 50 – A Feedback for 4-2 Final Project Milestone Two: First Year of SOX Compliance Submission Feedback Yvonne, great look at Trinity and the firm’s first year of SOX compliance. The content focused on the elements critical to its success. Try to expand on the internal controls. The paper was very short since the visual was included in the main part of the paper. Score 50.6 / 55 – A- Feedback for 6-1 Final Project Milestone Three: Comparative Systems Report Submission Feedback Yvonne, good variety of sources. I like how you crafted the memo. Great evaluation of the system. Score 56.64 / 60 – A Feedback for 7-2 Final Project Milestone Four: IFRS Report Top of Form Submission Feedback Yvonne, good to see you point out the relevant changes and the impact on the organization. Great breakdown of the standards over time. Score 61.1 / 65 – A
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