Through the establishment of a clear structure, recommendation of the internal audit team will be implemented and hence the company will realize improved performance.
To ensure that the internal auditing standards and other auditing standards are upheld, the company must come up with a way of continuously ensuring their internal audit staff attend conferences where training on standards are done. Implementation is only possible if the employees understand what is required of them and are acquainted with necessary materials on auditing standards. Auditing experts will then be engaged to evaluate the work of the internal audit staff to ascertain whether all standards have been conformed with. In areas where there has been failure of implementation, the staff responsible will be made accountable.
Implementation of the policies can also be done by ensuring that the management is charged with the mandate of facilitating the work of internal auditors in realizing their duties.…...
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References
Corporate governance: the role of internal control. (2007). Hamilton, Ont: Society of Management Accountants of Canada.
Hightower, R. (2009). Internal controls policies and procedures. Hoboken, N.J: Wiley.
Pickett, K.H. (2005). The essential handbook of internal auditing (Condensed version of 2nd ed.). Chichester: John Wiley.
Reding, K.F. (2007). Internal auditing: assurance & consulting services. Altomonte Springs, Fla: Institute of Internal Auditors, Research Foundation.
The amount and complexity of information created and overseen by the auditors in terms of expenses, earnings, and taxes will also increase. The ongoing growth of global organizations is also demanding greater auditing expertise concerning international laws and trade in addition to international mergers and acquisitions.
Following Enron and the other financial scandals, Congress passed laws to curtail organizational accounting fraud. This legislation requires public companies to maintain established internal controls to guarantee the accuracy and reliability of financial reporting and analysis. Although not part of this legislation, private companies have to be just as concerned about financial crimes such as embezzlement, theft, and securities fraud. Computer and Internet technology is making such crimes easier to commit, and the number of them are rising.
FUTUE GOWTH
Over half of the 400 respondents of PricewaterhouseCoopers' second annual "State of the Internal Audit Profession" 2006 survey said Sarbanes-Oxley (SOX) lead to an increase in…...
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Resources Cited
Dalton, Dan and Dalton, Catherine. "
Sarbanes-Oxley legislation and the private company: if not a marriage, then certainly an engagement" The Journal of Business Strategy. 2005. 26.2 (2005), 7-9.
Harrington, Cynthia. "Internal Audit's New Role." Journal of Accountancy. 198.3 (2004), 65-71
Institute of Internal Auditors. Internal Auditors Certification. 8/9/06. http://www.theiia.org/ .
A major objective of the custodial Financial reporting system is to be continuously and accurately responsive to regular and ad hoc requests for custodial financial reports" (Website of the Internal evenue Service, 2008).
The new information system has not been entirely implemented in the meaning that it still in the stages of control and testing. Once its implementation has been completed, the FMIS is expected to perform the following tasks:
Support the financial audit conducted by the General Accountability Office
Prepare the financial statements of the Internal evenue Service
Prepare reports for trending on operational impact
Feed the BPMS (the Business Performance Management System), the CCW (Compliance Data Warehouse) and the CAP (Custodial Accounting Project)
etrieve the information necessary for the Federal Payment Levy Program (FPLP), and finally
Analyze and report on modules with credit balances belonging to frozen credit processes (Website of the Internal evenue Service, 2008)
The GAO is a powerful organization, with a high…...
Internal Fraud Detection
Fraud can be detected by deliberate effort through internal control efforts or by coincidence or chance. When companies do not practice strong internal control, it leaves the door open for employees to misappropriate assets without being detected, except by chance. y the time fraud is detected by chance, it could have cost a company millions of dollars in misappropriated assets.
The first coincidence discovered by the magazine company was in the process of a new auditor in an effort to get to know his new company and their accounting codes taking invoices to a vice president responsible for approving payment on them. The very top invoice was a forged signature, and upon evaluation, more invoices were discovered to have contained forged signatures, which is what set up the investigation. According to (Global Economic Crime Survey), 13% of internal fraud is detected by accident, 27% reported fraud in the entertainment…...
hythm on the Vine is a concert series that is run on a charity basis by the Shriner's Hospitals for Children. hythm is a concert series and the size of the events is growing rapidly, so there is a need for the Shriners to implement proper procedures for financial management and cash handling at these events. Members of the public pay for their tickets with credit cards or online, but there are some ticket purchases at the events, and in some instances there are cash purchases of food and beverages available. There are several different ticketing tiers, with the highest level of sponsorship at $5,000 and lower levels down to $35 tickets at the picnic area. The picnic area generates cash sales of food and beverages in particular, as many picnic guests rely on ad hoc food purchases. In addition to ticket sales, there are silent auctions as well.
There are…...
Internal evenue Service's Use of Circular 230 to egulate Tax Preparers
An oft repeated maxim in American history states sardonically that "in this world nothing can be said to be certain, except for death and taxes" (Franklin, 1840), and under the modern statutes of federal tax code that observation has never been more prescient. With taxes imposed by local, state and federal governments throughout the entirety of our natural lives, Americans living in 2012 may be facing the most extensive excises ever levied by one nation on its citizenry. Considering the dreaded annual income tax, the sales taxes added to the cost of consumer goods, and property taxes attached to home valuations, the average person is compelled to contribute thousands of dollars annually to support the revenue shortages of a mismanaged federal government. Even the choice to gift a sum of money to your child, spouse or lifelong friend, perhaps…...
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References
Franklin, B. (1840). Letter to m. le roy on the affairs of france. In J. Sparks (Ed.), The works of Benjamin Franklin: containing several political and historical tracts not included in any
This implies a comparison of the results of the internal and external audits. Additionally, aside results and documents consulted, it is also necessary to assess the various variables used in the evaluations.
It is for instance possible for the company to alter the findings by focusing on more favorable variables. As a specific example, a financial audit could reveal increased organizational abilities to honor company debts, but this conclusion could solely be founded on the assessment of the company's short-term liquidity, in a context in which the assessment of the long-term liquidity would have revealed financial instabilities. In this order of ideas, the risks of altered results would decrease and the relevance of the findings would increase to better allow the auditor to assess the quality of the internal control systems.
At this stage, the auditors would make use of several technological applications through which to increase the efficiency of the…...
Audit in isk Management
Agelova, B., Koleva, B. (2015). The role of internal audit in risk management system of the companies. Economic Development, 3: 1-10.
This study shows that the purpose of the internal audit is increasingly oriented towards mitigating risk so that the firm in question can reduce uncertainty and exercise adequate, effective and appropriate decision making processes. The focus of the study is, therefore, on the internal audit aspect of a company's risk management. The purpose of the study is situated in evaluation research -- here, that which is evaluated is the "contribution of the internal audit in the management of risks in the Macedonian enterprises" (Angelova, Koleva, 2015, p. 1).
The sample used for this included the managers of 30 Macedonian enterprises along with 48 internal auditors in the epublic of Macedonia. The survey method was used for gathering data and the finding of the study was that internal…...
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References
Agelova, B., Koleva, B. (2015). The role of internal audit in risk management system of the companies. Economic Development, 3: 1-10.
S. through even 2009. The exponential growth of Indian outsourcing companies who have expertise in Business Process Management (BPM) have correspondingly seen an increase in their business, as many smaller American publicly-held companies do not have the people or the expertise to get their processes, systems, it plans and accounting and reporting functions in compliance to the SOX standard in any meaningful period of time (adtke, et.al.) as a result many accounting professionals also must manage outsourcing contracts with companies who specialize in BPM and SOX process-redefinition. Finally there is also more concentration on oversight at the corporate level, with companies including Boeing having a Chief Compliance Officer who reports directly to the CEO to ensure GC Initiatives gain the necessary resources to be effective. Accounting and auditing will continue to be significantly influenced by SOX for the foreseeable future as the need for compliance grows.
Conclusion
The accounting and auditing professions…...
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References
Ronald Jelinek, Kate Jelinek. "Auditors gone wild: The "other" problem in public accounting " Business Horizons 51.3 (2008): 223. ABI/INFORM Global. ProQuest. 14 Mar. 2009
Jeffrey E. Michelman, Bobby E. Waldrup. "Improving Internal Control Over Financial Reporting" the CPA Journal 78.4 (2008): 30-34. ABI/INFORM Global. ProQuest. 13 Mar. 2009
Robin R. Radtke.. "Role Morality in the Accounting Profession - How do we Compare to Physicians and Attorneys? " Journal of Business Ethics 79.3 (2008): 279-297. ABI/INFORM Global. ProQuest. 13 Mar. 2009
Sandra Waller Shelton, O. Ray Whittington. "The influence of the auditor's report on investors' evaluations after the Sarbanes-Oxley Act. " Managerial Auditing Journal 23.2 (2008): 142-160. ABI/INFORM Global. ProQuest 13 Mar. 2009
On the other hand, Enormo Corp is a big client for CPA, and exposing its case to authorities, would mean losing it.
As an alternative, CPA can refuse to work with Enormo Corp in this case and Enormo would be forced to resort to a different auditing company.
3. ecommended course of action. CPA has the right to handle this situation with the client, while trying to continue to have a professional relationship in the future. So, the suggested course of action would be to address the issue to a higher authority, start documenting it and explain to the client the implication of such documentation. The auditing firm also has the right to protect its integrity, so in this case it is essential to document the findings. However, since there is no rule that forces the auditor to report such discrepancy, the auditor will chose to restrict its actions to including…...
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Reference List
AICPA - the American Institute of Certified Public Accountants 1999, ET Section 102 - Integrity and Objectivity, http://www.aicpa.org/
IFAC - the International Federation of Accountants, 2007 Handbook of International Auditing, Assurance, and Ethics Pronouncements, www.ifac.org
performance indicators and internal budget controls like reviewing staff hours can be used to assess individual and organizational accountability. Strict AICPA standards are required for the peer-review process. In addition, internal budget controls are also effective performance indicators.
The American Institute of Certified Public Accountants (AICPA) has published extensive and strict guidelines regarding the CPA peer review process (AICPA). The standards for membership in the AICPA are strict, "to retain their membership in the American Institute of Certified Public Accountants (AICPA) members of the AICPA who are engaged in the practice of public accounting in the United States or its territories are required to be practicing as partners or employees of firms enrolled in an approved practice-monitoring program..."
In accordance with the AICPA standards, the firm will chose a single, qualified CPA from a list provided by the AICPA to conduct a peer review. This person will review working conditions, including…...
The proper authorization to complete an inventory also needs to include training on how to manage the exceptions that often occur when physical counting is taking place (Corman, 1988).
The third principle to have adequate documents and records in place that can be quickly be used by the teams completing the audits. This also needs to be preceded with a training session focused on how to also manage exceptions to the paperwork as well, as each company's physical inventory processes are unique to their specific business models (andall, 1984).
The fourth and fifth principles are physical controls and independent checks on performance. These two principles need to anchor all training activity and also be continually audited to ensure performance to standards set over decades are attained. Physical controls and independent checks are also indispensable to the audit and final approval of physical inventory levels, which is the first step in reconciling…...
Giannoccaro, I., & Pontrandolfo, P. (2002). Inventory management in supply chains: A reinforcement learning approach. International Journal of Production Economics, 78(2), 153-161.
Howard, K. (1984). Inventory management in practice. International Journal of Physical Distribution & Logistics Management, 14(2), 3-3.
Randall, a.M. (1984). Computerized inventory management: A return to basics. Hospital Materiel Management Quarterly, 5(3), 12-12.
unning head: APPLYING THE AUDIT POCESS APPLYING THE AUDIT POCESS 2Part A: Identifying Internal Controls and Tests of Controls/Prepare an Audit Programa) List the internal controls for the six transaction-related audit objectivesThe six transaction-related audit objectives over sales are existence, completeness, accuracy, timing, classification, and posting and summarization. The corresponding internal controls in the client organization are:i) Existence pre-numbered sales invoices are made in duplicate and duplicate copies as well as the supporting customer orders and bills of lading are stored in an electronic file that is easily retrievable. Duties are segregated such that sales recording and authorization are done by different clerks in the order and credit departmentsii) Completeness pre-numbered documents including sales order forms, invoices, and bills of lading are available in sequenceiii) Accuracy there is an approved commodity price list for use by billing staff and invoice totals are calculated with the help of…...
US General Accounting Office & National State Auditors Association. "Management Planning Guide for Information Systems Security Auditing." Issued 10 December 2011. Retrieved from http://www.gao.gov/special.pubs/managementpln.pdf
his source is a useful reference that can help determine the history and background of I security and federal government regulation. his report is the first of its kind and can help provide deep background information on the topic at hand.
Spremic, M., Ivanov, M., Jackovic, B. (2012). I Governance and information system auditing practice in credit institutions in the Republic of Croatia. International Journal of Applied Mathematics and Informatics, 2(6), 2012: 101,109. Retrieved from http://naun.org/multimedia/UPress/ami/16-201.pdf
his source provides a study to base the effectiveness of I governance. Despite a question of relevance due to the geographical location of the study, the information still holds value because of the questions the article essentially asked. he study focused on financial institutions performance and actions and their reliance on I…...
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This source examines auditing practices from a different type of academic source. This article argued that internal audit activity must be staffed with competent members dedicated to achieving goals. The article claimed that the internal audit activity must assess whether the information technology governance of the organization supports the strategies and objectives.
This source makes a plea that information systems integration and innovation is essential to the life of any and every organization. The article introduced the Belief action outcome (BAO) framework as an acceptable means to introduce the information technology systems into the larger environment.
Testing the controls that exist in the inventorying and warehousing processes at Apollo Shoes consists of the auditor ensuring that the existing controls actually measure what they set out to measure, and that these measurements reflect that actual movement of goods and materials through the various parts of the business (Arens et al. 2008). Certain processes, such as the means by which inventory is checked in and out of various stations in the business, must also be examined (Arens et al. 2008). Ensuring that these practices are able to influence physical movements of materials and goods is key to the audit process.
Inventory and Warehousing: Test of Transaction
In order to test the transaction that exist in Apollo Shoe's inventory and warehousing processes, the specific physical and record-keeping details of the company must be determined by the auditor. A typical flow of inventory through…...
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References
Arens, A., Elder, R. & Beasley, M. (2008). Auditing and Assurance Services. New York:
Prentice.
Coyle, B. (2000). Cash Flow Control. Chicago: Dearborn.
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