1.

Use operational events as examples to show how internal auditors can use financial
statement assertions in their operational audits.

During the period, the entity incurred salaries and wages expense in respect of
the individuals engaged by the entity. The payroll cost of any unlawful personnel is not
included in the salary and wages expense (occurrence). In completeness, all salaries
and payroll costs for all employees have been thoroughly accounted for. In valuation,
salaries and wages have been meticulously calculated. Any modifications, such as tax
deductions at source, have been reconciled and accurately accounted for. In cut-off,
salary and wage costs recorded during the period correspond to the current accounting
period for cut-off purposes. In the financial statements, all accrued and prepaid
expenses have been properly accounted for. Finally, in presentation and classification,
salaries and wages costs have been properly divided between operational expenses
incurred in production operations, general and administrative expenses, and personnel
costs pertaining to any self-constructed assets other than inventories when classifying
salaries and wages costs.

2. Use operational events as examples to show how internal auditors can use the 7Es
to assess and improve operational success.

Incorporating 7Es in the operations also brings out a good quality control:

Economy- in this area the internal auditors attest if all inputs and resources
obtain is a good investment in the organization.

Efficiency- in this phase the auditor seeks to know if the operation in the
organization maximizes its resources by providing maximum productivity with the lowest
possible wasted effort, expense, and time.

Effectiveness- in this area the auditor examines if the all the controls made in the
operation are effective in achieving the organizational goals and if it eliminates every
possible risk that could hinder operational success.

Ethics- While in administrating area of the organization, auditors can

assess the workers if they have done their job and always act with integrity.

Equity- in this area is that the organization undergoes its employees in improving
their skills through trainings to enhance the production process in the organization. Also,
the organization treated each of the employee a fair judgement especially in giving
promotions and rewards.

Ecology- the internal auditor tests the operation if it is eco-friendly and if it attains
the organizational stewardship.

Excellence- in this area the internal auditor assesses if the output of the
organization is in high quality.
3. Should all processes operate at the Six Sigma level? Why or why not?

Yes, it is because majority of the organization who implemented the six sigma
whether manufacturing or service organization comes up to positive results. The
rationale for this is that the tools and techniques may be used in any context where
processing is done. Manufacturing processes, like other business processes, contain
features that may be quantified, monitored, analyzed, and improved. To improve
consistency and predictability, these features may and should be managed as well.

4. Give two examples to show how Six Sigma can be applied in a service organization. 

-One of the service provider industry that gives positive outcome using the six
sigma is the general electrical business, since then the GE has issues with product
quality and overall service, however when they start implementing six sigma in their
operation it increases their revenue.

- Work in progress causes service completion delays in financial services.

Banking organizations eliminate unanswered phone calls and emails, as well as
incomplete reports, by assessing and refining financial service operations such as loan
applications. Customers are less satisfied with processes that take too long to finish.
Banking service experts look at their processes to see if there are any steps that are
unnecessary for the consumer. This typically improves customer loyalty.

Customers may pay for additional services, if they reduce a customer’s valuable time
required to complete processes, such as transferring money online or applying for a
credit card

5. What are the seven quality management principles of ISO 9001?

 Customer Focus

 Leadership

 Engagement of People

 Process Approach

 Improvement

 Evidenced-based Decision Making

 Relationship Management

6. What is the error rate (DPMO) for a process operating at the Six Sigma level?
 The error rate (DPMO) for a process operating at the Six Sigma Level is 3.4. A
current Six Sigma process now will have a estimated shift of 1.5 sigma in the future and
will perform at a 4.5 sigma level, which produces 3.4 defects per million opportunities.

7. What are the elements of the acronym DMAIC?

 Define
 Measure
 Analyze
 Improve
 Control