sysytem audit?

Answer 1

SYSTEM AUDIT
The quality system audit addresses the who, what, where, when and how of the organization’s quality system used to produce its product. For example, how is the quality system defined? Who is responsible for producing the product? Who is responsible for assuring the quality of the product meets or exceeds customer requirements? What is the extent of management involvement in the daily operation of the quality system? What procedures are used to guide the organization in its production effort? How are they maintained and updated? Who performs that function? Where are the procedures located?

What type of processes are used (both directly and indirectly) to produce the product? How do current procedures support these direct and indirect processes, etc.?

A quality system audit is characterized by its emphasis on the macro nature of the organization’s quality management system. Think of the quality system audit in terms of "an inch deep but a mile wide, " i.e., broad and general in nature rather than narrow and limited in scope. A quality system audit is defined as a "systematic and independent examination used to determine whether quality activities and related results comply with planned arrangements and whether these arrangements are implemented effectively and are suitable to achieve objectives." (ISO 10011-1 (1990)) Further, it is a "documented activity performed to verify, by examination and evaluation of objective evidence, that applicable elements of the quality system are suitable and have been developed, documented and effectively implemented in accordance with specified requirements." (ANSI/ASQC A3 (1987))

Answer 2

The major shareholder of Aussie Outback Tours Limited will definitely face a huge problem in convincing the legal counsel of how Jimmy’s negligence prompted into him making a loss of $ 0.80 per share. In the first instance, the shareholder was very much aware of the two year losses resulting from short term cash flow that emanated from the global financial meltdown. Further, these issues were compounded by the lack of long term loans and near limit bank overdraft. Being the major shareholder he should have had first hand information regarding the subject matter. But in a new twist, he should focus on the latest development of $0.80 loss on share price that is trading well below the net asset trading. According to Leung et al (2015) such matters need to be resolved from analytical perspective but all are deemed to focus on determining the negligence of the third party and the auditor in control.
According to the Contributory Negligence and Apportionment of Liability act 2001, if the plaintiff is guilty of contributory negligence, that causal carelessness will be brought into account as wrongdoing and a percentage assigned to it. Further, in each case a court must determine in relation to each defendant whose liability is limited under this section, a proportion of the plaintiff’s notional damages equivalent to the percentage representing the extent of that defendant’s liability (Contributory Negligence and Apportionment of Liability act 2001). In his defense, Jimmy should categorically state that the introduction of a new auditing system was solely a decision of the shareholders and never his in the first instance. It therefore means that he works under the control and guidance of the shareholders’ influence in the organization. That he never had the expertise to review and evaluate the database management system, so he hired an independent expert to undertake this role. The expert concluded that the system was working properly and System changeover was performed with the best accounting practices. All these issues point to the fact that the overstatement of the year-end inventory at the Souvenir stores, should be false because Jimmy did everything possible to eliminate errors in the system despite his limited knowledge of the system’s review and evaluation. But since it was under his docket, he takes blame for negligence under the act but at a percentage.
Conclusion
Under the Australian contribution negligence act 2001, a person is liable to every offence he/she makes due to their carelessness while performing auditing review and evaluation. Any lapse resulting from either overstatement or understatement and which may lead to an organization making losses they become liable to any judgment that may result out of any third party litigation. Under this law, therefore, Jimmy is liable to the offence of negligence but at a percentage only the courts will decide.








Reference
Leung, P., Coram P., Cooper, B., & Richardson, P. (2015). “Modern Auditing and Assurance Services.” Wiley Library.com
Law Reform (Contributory Negligence and Apportionment of Liability) Act (2001). Retrieved from:http://www.legislation.sa.gov.au/LZ/C/A/LAW%20REFORM%20%28CONTRIBU TORY%20NEGLIGENCE%20AND%20APPORTIONMENT%20OF%20LIABILITY% 29%20ACT%202001/CURRENT/2001.41.UN.PDF(Accessed on 2nd Sept. 2015)