please do paraphrases for the following questions and answers. Note: the accounting terms must be the same and the meaning.
1. The Improper payments made by the APC occurred during the time frame that Andrea Jung served as Avon's CEO. Was she "responsible" for those payments even if she was unaware of them? Why or why not?
In a sense, Andrea Jung as CEO should be held responsible for those payments even if she was "unaware" of them. Both of Jung's parents were born and raised in China, and I am sure Jung is very aware of the culture and how they do business in that country. As stated, she is a smart woman, especially when it comes to marketing and international business. Going into this market penetration strategy for China, she was well aware that Avon is a direct selling business and in 1998 the Chinese government had outlawed the "direct selling" of merchandise. It seems as if her bias and personal ties to the Chinese culture got in the way of her ethics. She knew that this market was not going to be successful for Avon since they ban what their whole company is based upon, yet she decided to go forth with the strategy. In the case study, it states Jung was willing and convinced to do anything to maximize their sales in China, even if it means to regain direct selling in the country. Jung created a "Direct Selling Task Force" for Avon Products China (APC), which she became very attached to. Jung became personally involved in Avon's goal of convincing the Chinese government to lift its ban on direct selling. She even travelled to China to personally meet with high-ranking Chinese government officials to discuss the issue with them. So while she says she had no clue, Jung definitely was aware of the cultural ways and how bribes were a norm. She was very involved and therefore knew what was going on. We believe she is responsible, as her actions speak volumes.
2. Identify the role and responsibilities that an internal audit staff typically assumes in a company's internal control system.
An internal audit staff assumes some very important roles and responsibilities. They can be found in audit section 322. The section lists the responsibilities of "providing analyses, evaluations, assurances, recommendations, and other information to the entity's management and board of directors." One important responsibility the section discusses is the monitoring of an entity's controls. Watching a business's controls take place is one of the most reliable ways to confirm that they are working properly. This will also give the auditor a better understanding of the internal controls and how they work. They will then review the effectiveness and efficiency of the internal control system. If the system is not effective they can make recommendations on how to improve the internal controls. One very important responsibility that would have gone a long way in the Avon case is to make sure the company is complying with all relevant laws and regulations. It is up to the internal auditor to make sure the company is not breaking any laws.
3. The IMA Statement of Ethical Professional Practice identifies four ethical standards, three of which are competence, confidentiality, and integrity (see "Ethics Center" on IMA website). Relying on those three ethical standards, evaluate the conduct of Avon's internal audit staff during the company's initial investigation of the questionable payments made by APC.