| Course | AC557 Internal Control Design, Development, and Evaluation |
|---|---|
| Unit | Unit 2 |
| Paper type | Objectives and risks worksheet |
| Length | About 660 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | MS in Accounting |
| Updated | October 2026 |
Free sample paper for AC557 Unit 2
Six Objectives Before Fourteen Risks: A Unit 2 Objectives and Risks Worksheet for Scrap Purchasing
[Student Name]
Purdue University Global
AC557: Internal Control Design, Development, and Evaluation
Unit 2 Objectives and Risks Worksheet
[Instructor Name]
[Date]
Rookwood Metal Recovery and every detail are composite; the framework, guidance and standard cited are real.
Why Objectives Come First
The framework treats specifying suitable objectives as the first principle of risk assessment: an organization cannot identify what could go wrong until it has said clearly what should go right (Committee of Sponsoring Organizations of the Treadway Commission, 2013). For a company whose parent reports on internal control, the reporting objectives are tied to the assertions in the financial statements, so that each risk can later be mapped to an account and assertion (Public Company Accounting Oversight Board, 2007).
Part 1: Objectives
O-1, operations. Pay sellers the posted price for the grade and weight actually received, and no more.
O-2, reporting, occurrence. Every recorded purchase represents metal actually received at a Rookwood yard.
O-3, reporting, completeness. Every load received and paid for is recorded as a purchase and as inventory.
O-4, reporting, accuracy and cutoff. Purchases are recorded at the correct weight, grade and price, in the period in which the metal was received.
O-5, reporting, valuation. Scrap inventory, grade by grade, is never carried above what it will sell for less the costs of getting it sold.
O-6, compliance. Every seller is identified and recorded as the state scrap metal law requires, including photo identification and vehicle information, and no payment exceeds the law's cash limits.
Part 2: Risks
Each risk names what could go wrong, the objective it threatens and a rating of likelihood and impact as low, moderate or high.
R-01, a load is weighed with the truck's tare taken from an old record rather than weighed out, overstating net weight: O-1, O-4; moderate, moderate. R-02, scales drift out of calibration: O-4; moderate, high. R-03, a grader assigns a higher grade than the metal warrants: O-1, O-4, O-5; high, high. R-04, the same load is ticketed twice: O-2; low, moderate. R-05, the price table is changed without approval: O-4; moderate, high. R-06, a fictitious ticket is created for metal never received: O-2; moderate, high. R-07, an operator overrides the posted price without authority: O-1, O-4; high, high. R-08, a price other than the posted price for the grade is applied by keying error: O-4; moderate, moderate. R-09, loads received on the last day of a month are recorded in the next: O-4; moderate, moderate. R-10, falling market prices leave inventory above net realizable value: O-5; moderate, high. R-11, the payment kiosk is loaded or reconciled by one person, allowing cash to go missing: O-1, O-3; moderate, moderate. R-12, a seller is paid without valid identification: O-6; moderate, moderate. R-13, payments are split to stay under the cash limit: O-6; moderate, moderate. R-14, stolen metal, such as catalytic converters or utility wire, is bought from unidentified sellers: O-6; moderate, high.
Writing each objective against an assertion first means every risk on the list can be traced to the line of the financial statements it would misstate, which is what a control matrix and a test plan will need later.
Notes on the Ratings
Grading and price overrides, R-03 and R-07, are rated high on both scales because they combine judgment, incentive and volume: thousands of loads a month pass through grading, and the Unit 1 post found 214 overrides in a single quarter. Fraud risk is considered explicitly, as the framework's eighth principle requires, and the grading and override risks are marked as fraud-susceptible. Inventory valuation is rated high on impact because copper and aluminum prices can fall sharply within a quarter. Compliance risks are rated moderate in likelihood but high in consequence for R-14, since buying stolen metal can lead to criminal liability and loss of the yard's license (Committee of Sponsoring Organizations of the Treadway Commission, 2006).
References
Committee of Sponsoring Organizations of the Treadway Commission. (2006). Internal control over financial reporting: Guidance for smaller public companies. COSO.
Committee of Sponsoring Organizations of the Treadway Commission. (2013). Internal control: Integrated framework. COSO.
Public Company Accounting Oversight Board. (2007). An audit of internal control over financial reporting that is integrated with an audit of financial statements (Auditing Standard No. 5). PCAOB.
Reading the AC 557 Unit 2 instructions
The second AC557 unit asks you to document control objectives and the risks that threaten them for one business process. Start with objectives, stated precisely and grouped in the framework's three categories of operations, reporting and compliance. Tie each reporting objective to a financial statement assertion, so later controls can be mapped to accounts. Then list risks, each describing a specific way the process could fail, naming the objective it threatens and rating likelihood and impact. Consider fraud risk explicitly and mark the risks most susceptible to it. Add notes explaining your highest ratings, since the reasons matter more than the labels. Number objectives and risks so that later control matrices can refer to them. Support the worksheet with COSO, its smaller-company guidance and the PCAOB standard, in APA 7 form.
How the AC 557 Unit 2 example is put together
The sample explains why objectives come first, citing the framework and the integrated audit standard. Part one states six objectives: paying the posted price for the grade and weight received, occurrence, completeness, accuracy with cutoff, inventory valuation by grade, and seller identification under state law. Part two lists fourteen numbered risks with their objectives and ratings, from tare weights taken from old records to stolen catalytic converters. The highlighted sentence explains how assertion-based objectives let every risk be traced to a statement line. Notes on ratings explain why grading and overrides are high on both scales, how fraud risk was considered and why inventory valuation and stolen metal rate high on impact.
AC557 Unit 2 rubric: what earns full points
Objectives and risks worksheets in AC557 earn points for precise objectives, specific risks and reasoned ratings. Graders check that objectives cover all three categories where the prompt asks, that reporting objectives map to assertions and that each risk names a concrete failure and the objective it affects. The rubric rewards explicit fraud risk consideration and notes that explain the highest ratings. Numbering that supports later work earns credit. Worksheets that list generic risks such as error or theft, rate everything high, or skip objectives entirely lose substantial credit. Clear structure helps graders follow the logic, and the framework, its smaller-company guidance and the audit standard should appear as APA 7 references.
AC557 Unit 2 help: mistakes that cost points
Weak Unit 2 worksheets start with risks and never state objectives, so the risks cannot be ranked against anything. Objectives are vague, such as accurate records, with no assertion attached. Risks are generic or duplicate each other. Ratings are assigned without explanation, and fraud is not considered. Compliance objectives are dropped even when the process is regulated, as scrap buying is. Numbering is missing, so the control matrix cannot reference the risks. If your section's process differs, such as payroll or revenue, a writer can state its objectives by assertion and build the risk list from your case.
Get an AC557 Unit 2 example written to your instructions
Upload the case from Unit 2, or just its purchasing or sales cycle in brief, together with the rubric. Objectives in the categories your section uses come first in the custom worksheet, then risks stated as events and rated before controls. It is ready inside 24-48h, with no fee on a first worksheet. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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AC557 Unit 2 questions, answered
Why must objectives come before risks?
Because a risk exists only relative to something it could prevent. Without a stated objective, a risk list becomes a catalog of unpleasant events with no way to rank them. The sample writes six objectives first, and every risk sits beneath the one it threatens, which also shows at a glance whether any objective has been left unprotected.
How does inherent risk differ from residual risk here?
Inherent risk is the exposure before controls; residual risk is what remains after them. The worksheet rates inherent risk only, because the control design matrix that follows needs to see exposure in full. Rating residual risk now would assume controls not yet designed or tested, a circularity graders tend to notice quickly.
Should compliance objectives appear in a financial reporting worksheet?
When the prompt covers all three COSO categories, yes, and many AC557 prompts do. The seller identification objective here is compliance, not reporting, and the worksheet says so, noting that its controls sit outside the parent's financial reporting assessment even though Rookwood still has to meet the rule every day.
Where can I find a free AC557 Unit 2 sample paper?
This page holds a full AC557 Unit 2 objectives and risks worksheet covering how Rookwood Metal Recovery buys scrap, with six objectives in three categories, fourteen rated risks and APA 7 references.
Why tie reporting objectives to assertions?
So that each risk and later each control can be traced to the account and assertion it protects, such as purchase accuracy or inventory valuation. That mapping is what management's assessment and testing rely on.