This paper examines what departmental staff at Ford Motor Company should expect when auditors visit as part of a company-wide audit of the firm's 2012 annual report. Drawing on Ford's One Ford plan and its fourth consecutive year of positive net income, the paper outlines three core auditor activities: observing employees to assess implementation of financial controls, reviewing departmental files and records for accuracy, and evaluating control risk to identify potential misstatements and internal control deficiencies. The paper emphasizes that the audit process is aimed at verifying whether financial reports accurately reflect the company's operations and that internal controls are functioning as intended.
This paper demonstrates applied concept explanation: it takes technical auditing concepts such as control risk assessment and financial statement verification and translates them into practical terms for a non-specialist audience (departmental staff). This technique is useful in business writing where technical processes must be communicated clearly to stakeholders who are not audit professionals.
The paper opens with background on Ford's financial performance to establish context, then defines the auditor's role. It proceeds through three body sections, each addressing one staff expectation: observing work practices, reviewing records, and assessing control risk. A brief conclusion restates the audit's overall purpose. The structure follows a straightforward expository format well suited to an undergraduate business or accounting course.
Ford Motor Company continued to experience profitable growth in 2012 through the firm's proven One Ford plan, despite the ongoing challenges that characterized the global market during this period. The company's efforts toward meeting the needs of its customers contributed to strong financial results for the fourth consecutive year, as it registered positive net income. These strong financial results were documented in Ford Motor Company's annual report for 2012, which also provided a roadmap for its business operations in the coming years. Auditors have since come into a department as part of a company-wide audit before issuing an audit opinion for the firm's financial reports. The department's staff need to have some expectations of what the auditors will do as part of their plan to issue an audit opinion on its financial reports.
Auditors play a crucial role in ensuring that what company outsiders see on financial reports is an accurate reflection of the firm's financial situation (Epstein, p. 176). Auditors essentially evaluate the quality of financial reports in terms of a company's operations and financial statements. The process is mainly geared toward ascertaining whether the financial reports are correct and reflect proper internal controls. For the departmental staff at Ford Motor Company, it is important to understand that the auditors' visit is to examine their operations based on the 2012 annual report.
One of the things that the company's staff should expect the auditors to do is examine the implementation of financial controls outlined in the annual report and discussed by the firm's top-level management before the commencement of the auditing process. The auditors are primarily visiting the department as part of conducting fieldwork after holding discussions with the firm's top management. In order to determine whether financial controls are being implemented, the auditors will observe the department's employees as they carry out various tasks, ensuring that workers are performing those tasks correctly. The suitability of the employees' actions and work is reviewed based on the regulations that govern them and the organizational policies implemented by Ford Motor Company.
The auditors' visit to one of Ford Motor Company's departments is geared toward evaluating the quality of financial reports. This evaluation also serves the purpose of determining whether the financial reports are accurate reflections of the company's operations. This process will include assessing the staff's work, reviewing departmental files, and evaluating and testing internal controls based on the financial statements.
Epstein. (n.d.). Evaluating the Quality of Financial Reports (Chapter 5, pp. 161–196).
Rittenberg, L., Johnstone, K., & Gramling, A. (2011). Auditing: A business risk approach (8th ed.). Mason, OH: Cengage Learning.
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