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24 May 2019

AVF Inc. manufactures several lines of packing equipment. Thecompany considers product reliability and outstanding customerservice to be critical to its success. The customer servicedepartment is responsible for:

-Providing prospective customers with product information.

-Monitoring spare parts availability

-Providing equipment operating and maintenance information tocustomers

-Developing aand delivering customer training courses

-Responding to customer complaints and making service calls

Handling customer warranty claims

-Maintaining good customer relations

The company recently made a sizeable investment to upgrade itscustomer service department computer system. the upgrade isexpected to improve operational efficiency and customersatisfaction. The outputs of the new system include managementreports used to monitor performance in the areas listed above. Theaudit committee has asked the internal audit function to audit theoperational effectiveness and efficiency of the customer servicedepartment. The engagement covers the following areas:

-Security of assets, includinf 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 fives areas specified by theaudit committee may or may not be appropriate for this assuranceengagement.

b) Identify three other areas of the customer servicedepartment that may warrant the internal auditor'sattention.

c) What are the primary audit tasks the internal auditorshould perform to avaluate the operational effectiveness andefficiency of the customer service department in meeting thefollowing responsibilities?

-Developing and delivering customer training courses.

-Responding to customer complaints and making service calls.

-Handling customer warranty claims.

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Sixta Kovacek
Sixta KovacekLv2
24 May 2019

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