...Recommendation Brief for an Internal Accountant 1 Recommendation Brief for an Internal Accountant Kelsy Fee ACC/544 April 13, 2015 Professor La Ron Roach Recommendation Brief for an Internal Accountant 2 In this recommendation brief the benefits of hiring an internal accountant will be discussed. Having an internal accountant would help fix an out-of-control system and the justification of taking advantage of one will be included in this brief. Along with those two items the brief will also explain how the background of a referred internal accountant benefits the client. Before discussing the benefits of hiring an internal accountant let us define what an internal accountant does. According to University of Phoenix Risk from the CEO and Board Perspective (2004), internal auditor responsibilities include risk management and control systems. They are expected to help management by handling issues that may arise and perform system audits to uphold the internal responsibilities. An internal auditor will evaluate the company’s performance and make sure they are not violating any laws or regulations. Policies and procedures will also be reviewed and made sure that they are in line with the mission and goals of the company ("The Benefits Of The Internal Audit", 2015). The benefits of hiring an internal accountant include the following: the protection of company assets, increasing the value of the company by improving performance and providing...
Words: 658 - Pages: 3
...INTERNAL AUDITING AS AN EFFECTIVE TOOL FOR CORPORATE GOVERNANCE This journal of JBM International Science Press, examines the study of the relationship between internal audit and corporate governance with various argumentations of internal audit activities, attempting to sketch out their relationship. It analyses the contribution of internal audit to corporate governance. Based on what I found in the journal and my opinion, this journal have emphasized the importance of internal audit which is really compulsory for every company to follow as it improves the efficiency and effectiveness of the management and company. Moreover it also have mentioned that the relationship and communication between employer and management is important in internal control which is an effective idea on maintaining employer’s loyalty and reduce fraud. But this journal less focus on the disadvantage of internal control if it is not handled wisely which is really need to be considered before implementing internal audit control system. The journal have explained well on how the internal control benefits the company but as an auditor or a manager, one should also consider the disadvantage that might be faced by the company from internal audit control. Internal audit control systems have a few weaknesses that business owners must address. First, broad application. Internal audit control systems can be very broad in their application and this can create a weaker...
Words: 917 - Pages: 4
...ABSTRACT While outsourcing internal audit function in the private sector has been extensively Investigated by various researchers (Carey and Chua, 1999; Petravick, 1997; and Sharma and Subramaniam, 200l; amongst others), there is scant empirical data from the public sector. This study attempts to fill the gap by providing some preliminary evidence in food and beverages industry. Using responses from 3 firms which includes Dangote flour mills, UAC and Northern Nigeria flour mills plc, the study found that more than 85% of the respondents had either fully outsourced or co-sourced their internal audit function. Further, non-department entities were found to more likely to fully outsource their internal audit function than the departments. Lack of technological know-how and service quality of external providers seem to outrank cost-related factors as reasons for outsourcing. The study also raises several issues in relation to a lack of segregation of duties in the process of selecting and monitoring outsourced arrangements. Implications for policy setting and avenues for future research avenues are discussed. INTODUCTION In today’s business environment, outsourcing processes to a third party has become relatively commonplace. The practice gives organizations an opportunity to gain efficiencies, improve performance, lower costs, and focus on core competencies. Many businesses, however, fail to complete necessary due diligence work before the outsourcing relationship begins and neglect...
Words: 8669 - Pages: 35
...Internal Auditor Recommendation Brief Since Somerset Company has an out-of-control system, the company would be subject to audits from the SEC about their financial statements. In order to prevent this from happening, Somerset should consider hiring an Internal Audit Team of three people. The main focus would be to hire an Internal Auditor that would communicate what is required to prevent fraud, safeguard assets, financial reporting standards and to ensure that the company is in compliance with the SEC regulations. The internal auditor would improve Somerset’s internal controls. In this an explanation of the benefits of hiring an internal auditor, describe the qualifications and qualities needed for an internal auditor for this type of company and a recommendation of an internal auditor that meets the benefits and qualifications for this company. An Internal auditor and the team can validate the company’s internal controls and perform tests for fraud, negligence or waste. Internal auditors ensure that the internal controls are adequate and evaluate the company’s financial and information systems for accuracy. In addition to the benefits of hiring an internal auditor would provide the company a variety of audit services such as operational audits, fraud audit, compliance audits and financial statements audits. Operational audits are the most beneficial to Somerset’s needs in controlling their out of control systems. “An operational audit is a systematic review and evaluation...
Words: 662 - Pages: 3
...Roles of audit committee An Audit Committee does not focus solely on internal audit activities or on financial issues. Recent trends are for it to take on broader roles and responsibilities. The establishment of an Audit Committee affords the opportunity to set aside time to focus on governance, risk and control issues. The key responsibilities of an Audit Committee include: overseeing the risk management framework and processes; reviewing compliance related matters and internal controls; overseeing the relationship, appointment and work of the external and internal auditors; and reviewing the annual financial statements and recommending them for governing body approval. As it relates to oversight of the internal audit function, the responsibilities of Committee’s include: ensuring that internal audit activity is structured to achieve organisational independence; ensuring the internal audit charter permits full and unrestricted access to top management, the Audit Committee and the governing body; ensuring unrestricted access by internal auditors to records, personnel, and physical properties; ensuring the function is appropriately resourced; and ensuring the function is operating effectively. In relation to its other roles, Audit Committee responsibilities could include: review, with management, the adequacy of policies and practices for risk management and the operation of the internal control system; review, with management, the adequacy...
Words: 801 - Pages: 4
...Compliance Insights discusses the importance and benefits of internal audit functions to publically traded companies and potential investors. Author Richard Chambers, CEO of the Institute of Internal Auditors, begins with a bold statistic stating 55% of Americans invest their hard earned money in the stock market, leaving their future financial well-being in the hands of the companies in which they invest in. With this many Americans turning towards the stock market to invest, some research should be conducted before doing so. Many people believe investigating the backgrounds the Board of Directors of a company is sufficient enough before investing. Although that is a good place to start, a potential investor should also ask himself “How effectively are risks managed?”, “How ethical is the culture?”, and most importantly, ”How strong is the control environment?” . A lack of internal audit controls should be a red flag to investors about the way a company is managed. Although having internal audit functions does not guarantee absolute assurance, not having these functions should raise questions. Potential investors should have a higher degree of confidence in companies that have internal audit functions as opposed to companies without them. However, investing in companies still has risks regardless if there are mandated internal audit functions in place. Internal audit functions do not completely guarantee a safe investment...
Words: 487 - Pages: 2
...business. Our firm will provide auditing and assurance services that will benefit Apollo Shoes. We will provide independent professional opinions so that you can make better business decisions and will be better informed. First off, we will perform an audit of the financial records during the time period we are engaged for. Our auditor will next review their findings and express their opinion as to the as to the financial statements being presented fairly and in compliance with U.S. GAAP. The review is performed to make sure there are no material misstatements with the financial data. Examples of assurance services include accounts receivables reviews, business risk assessment, information systems security, a comfort letter, or an internal audit outsourcing. The benefits of audit and assurance services will include that the management team of Apollo Shoes will be able to evaluate the results of the audit and make suggestions for corrective actions and exercise operative controls. Secondly, a benefit of an audit is to help management test their current policies and procedures for internal controls to see if what is currently enforced is effective and if not, it is time for a change. Next, an audit can help keep the accounting staff on a path of smart decisions by hoping to reduce omissions and errors since they know their work is continually being auditing by our firm. Finally, and audit scrutinizes the accounting procedure by segregating the truth in the information...
Words: 655 - Pages: 3
...organisational excellence A Scottish Housing Association case study James Sheffield Comhairle, The Scottish Centre for European Public Sector Studies, University of Paisley, Paisley, Scotland, and 484 Siobhan White Division of Accounting and Finance, Glasgow Caledonian University Business School, Glasgow, Scotland Keywords Scotland, Housing, Financial management, Auditing, Corporate governance Abstract Control self-assessment (CSA) has been discussed as an audit technique, but little practical guidance is available in the UK on the subject. A limited number of public sector organisations have implemented it. This paper describes a case study of CSA implementation in a Scottish Housing Association. The case study details the decision processes that led to the choice of CSA as a favoured audit technique, and the development of CSA skills within the organisation. This paper examines the broader benefits of a CSA approach, in terms of performance management and employee empowerment. This paper also uses a cost benefit analysis to examine the efficacy of CSA for small organisations. Managerial Auditing Journal Vol. 19 No. 4, 2004 pp. 484-492 q Emerald Group Publishing Limited 0268-6902 DOI 10.1108/02686900410530493 Introduction West of Scotland Housing Association (WOSHA) is a provider of social housing, whose homes are rented to people who apply to the Housing Association to become members. Once an individual (or family) has become part of the Housing Association, they can...
Words: 4217 - Pages: 17
...INTRODUCTION LETTER I am writing this letter to introduce myself, my company, and the auditing and assurance services we can offer to Apollo Shoes. I will also discuss the benefits of our services as well as the role we will provide and the requirements for meeting the standards for the services we offer. Our firm has been in business for over 15 years and has the necessary expertise to provide your company with the related services. Auditing and Assurance Services Available According to Arens, Elder, and Beasley “auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria.” Also, an assurance service is an independent professional service that promotes the quality of information. These services are regarded as valuable because they come from an independent and unbiased professional. Although there are so many auditing and assurance services our firm provide, I would explain a few and the popular once we have. First we do have the audit of historical financial statements. With this type of service, the auditor will assert that the statements are fairly stated according to an applicable standard, for instance, the International Accounting Standard or the U.S. Standards. Such an audit is an attestation service where our auditor issues a written report expressing an opinion about the financial statements and if they are stated fairly in accordance with...
Words: 1204 - Pages: 5
...Section 404 of Sarbanes-Oxley Act Introduction Before 2002, many U.S. companies, such as Enron, WorldCom and Xerox went bankrupt and caused the serious global issues and financial responsibilities of managers in the world. The primary issue was about an ethical leadership and maintained the clean audit system. Well known examples perhaps were Enron and WorldCom scandals. Dyck and Neubert (2010) mentioned that “Ironically, the lucrative rewards for performance and innovation were keys to Enron’s early success and growth, before excesses in pursuit of these goals contributed to the ethical failures that ultimately destroyed the company. ” (p. 151). According to Dyck and Neubert (2010), both Ebbers as C.E.O of WolrdCom and Skilling as C.E.O of Enron went to a prison for their unethical behavior within their organizational structure caused (p. 449). According to Noreen and colleagues’ (2008), these scandals were involved at the highest level to the former C.E.O including the misuse company money and fraud financial reports (p. 25). In particular, Sadka (2006) indicated that in the case of WorldCom, its financial fraud includes mispricing of its products (p. 439) Moreover, due to WorldCom’s financial fraud, investors of WorldCom’s competitors lose $7.8 billion with additional losses of $49 billion social welfare (p. 463). That is to say, the bankruptcy of one of the biggest company caused a lot of problems in the U.S. As a result, not only investors lost billions of dollars but...
Words: 8697 - Pages: 35
...Sarbanes-Oxley: Benefits vs. Costs Sarbanes-Oxley: Benefits vs. Costs The American Competitiveness and Corporate Accountability Act of 2002, commonly referred to as the Sarbanes-Oxley Act (SOX) was enacted in response to corporate financial scandals involving companies such as Enron, WorldCom, and Tyco International. While SOX was written specifically for public companies; a few provisions, including whistleblower protection and document retention apply to all companies and nonprofit organizations (Levy, 2009). The stated purpose of the SOX legislation is “to protect investors by improving the accuracy and reliability of corporate disclosures” (Martin & Combs, 2010). SOX requires additional internal monitoring and disclosure of internal accounting control practices. SOX also mandates that CEOs and CFOs personally certify accounting disclosures. Ultimately, SOX was designed to increase accountability and transparency in an effort to restore investor confidence. While SOX has been effective since its enactment, many question whether the benefits outweigh the costs. Major Provisions SOX includes over 60 separate sections, including several significant provisions (H.R. 3763). Section 101 created the Public Company Accounting Oversight Board (PCAOB) to oversee SOX and public accounting firms. Oversight is critical to the successful implementation of SOX requirements. Section 203 requires the lead audit or coordinating partner and the reviewing partner to rotate...
Words: 1502 - Pages: 7
...Recommendation Brief for an Internal Accountant Every business needs proper and adequate internal control to ensure success of the company. Internal control reduces the risk of financial fraud and financial misstatement. When a company has an out of control system, it is recommended to hire an internal auditor to perform internal audit. This report will briefly explain the benefit of using internal auditor and how the qualifications and background of the internal auditor will benefit the company. Benefit of Internal Auditor Internal auditing is designed to improve an organization’s operations. The opportunities of internal auditing within an organization involve effectiveness of operations, protection of assets, detecting and investigating error and fraud, consistency of financial reporting, and compliance with the laws and regulations. Internal auditors must be hired by the company to perform the internal auditing activity such as this. Internal audit highlights problems such as risk of lawsuit and company loss, in which it allows to correct any mistakes in a right time. Internal audit also make sure that the company policy are well organized and efficiently and effectively running. They review and evaluate company’s information systems and internal controls to verify if financial records are accurate and reliable. With adequate internal controls, internal auditors are confident enough that financial misstatement are prevented and detected on a timely basis. The scope...
Words: 464 - Pages: 2
...CHAPTER 5 Internal Control Evaluation: Assessing Control Risk LEARNING OBJECTIVES | | | | | |Review |Exercises, Problems, | | |Checkpoints |and Simulations | | | | | |Distinguish between management’s and auditors’ responsibilities |1, 2, 3, 4, 5 | | |regarding a company’s internal control. | | | | | | | |Define and describe internal control. |6, 7, 8 | | | | | | |Define and describe the five basic components of internal control, |9, 10, 11, 12, 13, 14, 15, 16, |62, 66, 69, 70 | |and specify some of their characteristics. ...
Words: 9314 - Pages: 38
...Evaluating Internal Controls Samy Yaacoub ACC/544 Internal Control Systems Prof. Robert J. Cornett March 26, 2012 University of Phoenix Checklist for Evaluating Internal Controls Abstract An auditor uses a checklist as an efficient toll in performing a review to the organization departments’ internal controls. This report provides a suggested comprehensive checklist to evaluate the organization internal control system in the PowerPoint presentation attached. It is also explains how to use this checklist and how the checklist covers and compound the organization internal control system objectives and its five component in the three phases of the internal control. Using the Checklist in Evaluating Organization Internal Controls The checklist works as an efficient tool to evaluate the organization internal control system through reviewing the organization internal control objectives. The checklist questions examine these objectives in details because it asks to response to topics related to authorization and approval, validity, completeness, recording accuracy, safeguarding, and reconciliation. The response to the checklist questions are including alternative answer “yes, no, not sure, and not applicable.” The “no” reply will designate usually a possible weakness, this can compensate by compensating controls within the unit. Apply the checklist to outline/discuss phases of the control evaluation The checklist beads on the internal control...
Words: 533 - Pages: 3
...conducting an evaluation of an audit client’s internal control? A. The auditor has two primary reasons for conducting an evaluation of a company’s internal control. 1) First, Sarbanes-Oxley (SOX) requires an audit of management’s assessment of internal controls for publicly traded companies. This type of audit is an integrated part of the financial statement audit. In some substances, the auditor issues three opinions: one on the company’s financial statements, one on management’s evaluation of their internal controls over financial reporting, and one on the effectiveness of a company’s internal controls. 2) The second reason for evaluating a company’s internal control is to assess control risk to give the auditors a basis for planning the audit and determining the nature, timing, and extent of audit procedures for the account balance (substantive) audit program. B. For secondary reason for evaluating internal control is to provide information useful to the management and directors for carrying out the company’s control mission. Regulators, Congress, and the public have been concerned about auditors’ communication of internal control and other matters to high levels in public corporations. Another responsibility is to communicate internal control matters noted in an audit to the audit committee of the company’s board of directors and directly to shareholders through their report on management’s assertion of effective internal control in the annual report...
Words: 1408 - Pages: 6
