1.

Prepare a flow chart of the information and transaction concerning the usage of
spark plugs during the servicing of automobiles at the large city garage

Vehicle

Arrived

Record
Vehicle
Information

Mechanics
Record By

Updating

Customer
Database

Consultatio
n

Test Driving
and
Recommendati
on

Spare Parts
Stock Opname

Determining the
parts that need
to change

Updating
Repairing
parts form

Changing
Spark
Plugs

Providing
Spare parts
Repair &
Change
Final Check
& Test
Drive

No (0-6000)

Yes (> 6000)

2.

What are the acceptable standards of

a.

the conventional spark

management control for :

Determining requirements for spark plugs
They had determined that spark plugs with
Vehicle
Ready
platinum tips lasted five times as long as
plug, but cost three times as much. On the

other hand, the platinum-tipped spark plugs had a reclamation and disposal value,

while the conventional spark plugs cost the garage the time and effort to dispose of
them. the conventional spark plugs cost $0.75 while the platinum-tipped plugs cost
$2.50, the salvage value of the platinum-tipped plugs was $0.25. based on the
explanation in background data which is tell us that platinum-tipped plugs have a
longer life cycle rather than conventional spark plugs, it means that conventional
spark plugs more need the service in several times than platinum-tipped plugs, so the
maintenance cost that comes from the conventional spark plugs is bigger than
platinum-tipped plugs. From that requirements, the car that using the platinum-tipped
plugs have to be the car that have a high mobility (such as police, highway and streets
department) because the car that have a high mobility need a spark plugs that have a
long life cycle, less cost for maintaining, so thats why platinum-tipped plugs more
efficient into the car that have a high mobility because platinum-tipped plugs provide
those requirements. Then, the car that using conventional spark plugs have to be the
cars that have a low mobility (such as truck).
b. Purchasing fine-wire spark plugs
The garage serviced the equipment at regular servive periods, both by mileage and
time, in addition to servicing the equipment at any failure. These showed that the
average service life of the platinum-tipped plugs ranged from 6,000 to 10,000 miles
and the purchase orders of the purchasing groups based on the requirements.
c. Replacing the fine-wire spark plugs by mechanics, and disposing of spark plugs
The mechanics routinely changed the plugs every time they serviced an automobile,
but in standard that have been made say that automobiles were brought in for routine
servicing, including tuning the motor, every 6,000 miles or 6 months, whichever
came first. Whereas platinum-tipped plugs that have been used can still Disclosed in
equal as salvage value which is $ 0.25.
3. Were the standards you considered acceptable, carried out by the organization?
The standard that I considered acceptable is not carried out by the organization. There are
a few things that causing the standard is not carried out by the organization, which are:
It was showed in the scenario 2 (review and testing of management control) that
orders were outstanding based on the 6,000 to 10,000 miles of usage. It means
that standard plugs almost ignore the useful life of the plugs that make an impact
on the outstanding ordered.

Management has no standards concerning dispense plugs, they do not distinguish

between conventional and platinum spark plugs on disposing of it. It is showed in
scenario 2 (review and testing of management control) that the appropriate
technical manual on spark-plug usage, which showed that 3,000 miles of usage
was the minimum desired service life from the platinum-tipped plugs, but the fact
is from watching the mechanics service an automobile, the auditors observed that
the mechanics routinely changed the plugs every time they serviced an
automobile.

4. What would need to be done to assure management that the standards were being
carried out in a satisfactory manner?
Several things that we need to be done to assure management that the standards were
being carried out in a satisfactory manner are:
Ensure that the standards that have been made as detailed as possible to minimize

the chance for doing standards deviation

Regular supervising to ensure that the standards that have been made can be

applied by any organizational structure, especially in this case for mechanic

Applying the rules of reward and punishment, for those who implement the
standards very well will be rewarded, and for those who do the standards

deviation will be punished.

Communicating the existing standard to customers by providing an explanation
for the car that have been services and give an explanation why the car spark
plugs need to be replaced or disposed.

5. Would your knowledge of the management controls of the organization have had
any effect on your decision as to whether or not to make an audit?
The term management control means embraces the entire system of organization,
including the planning, policy, and procedures determination, as well as the actual
practices carried out in managing entity affairs. This knowledge help us for giving an
understanding that we have to assess what the risk that included on doing my audit. Then,
we can consider what the audit objective is based on the risk that I assessed before.