...Jamie, 2004). Organisations maintain their financial reports with the help of accounting theories and policies. The international financial reporting standards also help to keep the accounting practice effectively, efficiently, and correctly. The efficient management will be built if the organisation follows the international reporting standards accurately. As a mandatory course unit of myself I need to prove my understanding about the financial systems and auditing through this report. I will gradually demonstrate my understanding on the purpose, use, importance of accounting records, accounting systems, computerised accounting system, manual accounting systems, business risk, audit risk, internal and external control systems, importance of auditing, and planning audit assignment as well as preparing audit report in the body part of my report. Task One Purpose and Use of Different Accounting Records Accounting records represents the management of all source of information in different records books. These records are ledger, journals, bank statements, adjusting journals, statement verification, invoice, brochure, and etc. The purpose and use of different accounting record in the following. Purpose To illustrate the purpose of accounting records we chose main two types of accounting record. These are journal and ledger. The journal represents the original entry. The purpose of journal entry is given below. * Knowing the date of transaction * Determining the accounting...
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...Journal Article Review Kas Internal Auditing (ACC 4012) Article: Code of Ethics for Internal Auditors Harmonized with the International Standards for Internal Audit Summary In the article titled “Code of ethics for internal auditors harmonized with the international standards for internal audit” by George Calota was published in 2008. The article was written to explain how Code of Ethics influences the roles of internal auditors when unified with the International Standards for Internal Audit. This study was carried out to allow both internal and external auditors, private and public business owners with an audit board, within their working environment to be aware of how an internal auditor is supposed to carry out their job and the polices which they should follow. The author’s main focus was on The Josephson American Ethics Institute ethical principles, Romania’s personal ethical principles and its similarities to the fundamental principles of the code of ethics and most of all, how the fundament principles of ethics and professional behaviors for internal auditors are harmonized with the international standards for auditing (Integrity, objectivity, confidentiality and competence). The author seemed to be highly qualified to tackle this particular issue. He is an experienced internal auditor, who has worked with the Ministry of Economy and Finance and also The Central unit for harmonizing the internal audit from Romania. Issues In the article, the author made mention...
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...Chapter 1 Internal audit is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It help an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management control, and government processes. Objective- what an organization wants to achieve. Strategy- how management plans to achieve to organization’s objective. 4 types of objectives -Strategic objectives: value creation choices management makes on behalf of the organization’s stakeholders. -Operations objectives: effectiveness of and efficiency of the organization’s operations. -Reporting objectives: reliability of internal and external reporting of financial and nonfinancial information -Compliance objectives: adherence to applicable laws and regulations Governance is the process conducted by the board of directors to authorize, direct, and oversee management toward the achievement of the organization’s objectives. Risk management is the process conducted by management to understand and deal with uncertainties that could affect the organization’s ability to achieve its objectives. Control is the process conducted by management to mitigate risks to acceptable levels. Independence is the freedom from conditions that threaten objectivity or the appearance of objectivity. Objectivity is an unbiased mental attitude that allows internal auditors to perform...
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...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...
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...Chapter 7 – Internal Controls • Key topics: • Know the broad definition of internal control and its purposes, including the objective that is particularly relevant to an audit (i.e. reliability of financial reporting) A process, effected by the entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to operations (effective and efficient operations), reporting (accurate financial reporting) and compliance (compliance with laws and regulations) • Describe the 5 components of internal control, related examples of each, and how each contributes to the overall control system within an entity (CRIME) 1. Control Environment: The foundation for the other internal control components; it is defined by the standards, processes, and structures that guide individuals in carrying out their duties. Basic principles include: Commitment to integrity and ethical values, Board of directors demonstrates independence from management and exercises effective oversight of internal control, Establishment of effective structure, including reporting lines, and appropriate authorities and responsibilities, Commitment to attract, develop, and retain competent employees, and Holding employees accountable for internal control responsibilities. 2. Risk Assessment: Risk assessment is management's process for identifying, analyzing, and responding to risks from internal and external sources that threaten...
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...AMERICAN EXPRESS COMPANY AUDIT AND RISK COMMITTEE CHARTER (as amended and restated as of January 23, 2011) Purpose The Committee is responsible for assisting the Board of Directors in its oversight responsibilities relating to (i) the integrity of the Company’s financial statements and financial reporting process; (ii) internal and external auditing, including the qualifications and independence of the independent registered public accounting firm and the performance of the Company’s internal audit services function; (iii) the integrity of the Company’s systems of internal accounting and financial controls; (iv) legal and regulatory compliance; (v) the assessment and management of the Company’s risk and capital; and (vi) the performance of the other Committee functions set forth in this charter. In discharging its responsibilities, the Committee is not itself responsible for planning or conducting audits or for any determination that the Company’s financial statements and disclosures are complete and accurate or are in accordance with generally accepted accounting principles and applicable rules and regulations. This is the responsibility of the Company’s management and the independent registered public accounting firm. In addition, the Company’s management is responsible for managing its risk function and for reporting on its processes and assessments with respect to the Company’s management of risk. Organization and Certain Responsibilities The Committee shall be comprised...
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...40 SU 1: Strategic and Operational Roles of Internal Audit QUESTIONS 1.1 Change Management 1. An organization's management perceives the need to make significant changes. Which of the following factors is management least likely to be able to change? A. The organization's members. B. The organization's structure. C. The organization's environment. D. The organization's technology. Answer (C) is correct. REQUIRED: The factor management is least likely to be able to change. DISCUSSION: The environment of an organization consists of external forces outside its direct control that may affect its performance. These forces include competitors, suppliers, customers, regulators, climate, culture, pol technological change, and many other factors. The members are a factor that managers are clearly Answe~(A) is incorrect. factor that managers are incorrect. The organiz I are clearly able to change. organization's technology' able to change. 2. Lack of skills, threats to job status or security, and fear of failure all have been identified as reasons that employees often A. Want to change the culture of their organization. B. Are dissatisfied with the structure of their organization. . C. Are unable to perform their jobs. D. Resist organizational change. Lack of skills, threats to job status or re inhibit changes in the culture of the (8) is incorrect. Lack of skills, threats to job status . rity, and fear of failure are not symptoms of dissatistacjion with the structure of the organization...
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...the corporate governance toolkit as the basis for your research. a) Overview: 1. What are the basic principles of corporate governance? • Transparency: Are the board telling us what is going on? • Accountability: Is the board taking responsibility? • Corporate Control: Is the board doing the right thing? 2. What mechanisms are suggested by the ASX corporate Governance Council? Relating to the three principles stated in the last question. The ASX Corporate Governance Council translates the elements into mechanisms: • Is the board telling us what is going on? →forming an environment to take risk. • Is the board taking responsibility? →clarifying the role of the board and management. • Is the board doing the right thing? →Meeting information needs of investment communities. 3. What is an SME? SME stands for Small and Medium Enterprises. 4. What processes would you expect to find in a company relating to risk management and compliance processes? • Policy/framework • Board commitment, oversight and review • Accountability • Risk processes: o Risk identification o Risk assessment/measurement o Risk response • Robust appropriate internal control and statutory and regulatory compliance...
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...ACG 3401 Study Guide Exam 1 Accountants Roles * Management accountant * Internal auditor * Information systems auditor * External auitor * Tax accountant * Fraud examiner * Managerial Accountant * Provides info for mngmt decisions * Knowledge base: * * * * Business processes * Accounting information sustems * Internal controls * Managerial accouting techniques * Impact of accounting on behaviors Advocate for best info possible for making the best decision for the firm IMA Information criteria: 1. 2. 3. 4. Forward looking 5. Timely 6. Responsibility oriented Planning Systems (budgets) control systems (implement the course of action and evaluate) Management accounting answers questions related to : * * * * * Important customers ( profitability) * Substitute products * Critical capability * Funding ( growth) Value ( Adam Smith) * Value in use- derive value by using the product * Value in exchange- derive value from the exchange of that product for another good or service. Generic Value Chain Model: 1. 2. 3. 4. *Customer need identitified* 5. Identify the market and create the product/ service ( innovation cycle) 6. Build the product or service and deliver the product or service ( operations cycle) 7. Service the customer ( post sales service cycle) ...
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...------------------------------------------------- EXPLORING THE PRINCIPLES FOR INCREASING INTEGRITY, OBJECTIVITY IN EXTERNAL AUDITS. Authors: Dosch, Robert J. rdosch@business.und.edu Haskins, James P. jhaskins@business.und.edu O'Keefe, Timothy P. tim.okeefe@business.und.edu Source: Information Management Journal. May/Jun2013, Vol. 47 Issue 3, p32-36. 5p. Document Type: Article Subject Terms: *RECORDS management *FINANCIAL statements *AUDITING *DATA integrity *AUDITING standards *BUSINESS records -- Management *OFFICE management *ELECTRONIC data processing Geographic Terms: UNITED States NAICS/Industry Codes: 518210 Data Processing, Hosting, and Related Services 561110 Office Administrative Services 561490 Other business support services Abstract: The article discusses how integrating the records and information management (RIM) process and Generally Accepted Recordkeeping Principles in the financial statement audit process will improve audit objectivity and integrity. It states that RIM professionals have an important role in the audit process as the objectivity and integrity of information are crucial to the quality of audit outcomes. It explores the framework of an external audit in the U.S. which are done in compliance with the General Accepted Auditing Standards. ISSN: 1535-2897 Accession Number: 89184390 ------------------------------------------------- EXPLORING his article proposes that incorporating the records and information management...
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...other organisations has created the need for a specialist in various business controls: the internal auditor. We can understand better the nature of internal auditing today if we know something about the changing conditions in the past and the different needs these changes created. What is the earliest form of internal auditing and how did it come into existence? How has internal auditing responded to changing needs? As the operations of an organisation become more voluminous and complex, it is no longer practicable for the owner or top manager to have enough contact with all operations to satisfactorily review the effectiveness of performance. These responsibilities need to be delegated. The Development of the Profession of Internal Auditing Internal auditing has evolved from accounting-oriented to a management-oriented profession. At one time, internal auditing functioned as a junior to the independent accounting profession, and attesting to the accuracy of financial matters was the profession's main concern. Now internal auditing has established itself with a far broader focus. Modern internal auditing provides services that include the examination and appraisal of controls, performance, risk and governance throughout public and private entities. Financial matters represent only one aspect of the purview of internal auditing. Requirement to have Internal Audit Activity In January 2004, the US Securities and Exchange Commission (SEC) had approved new...
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...MEMO To: Andrey Simonov From: Vivian Jeansonne Subject: Internal Controls and the Auditing of Internal Controls Date: March 19, 2013 _________________________________________________ The Internal Control—Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), defines internal control as “a process, effected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations” (Douglas). Internal controls are a very important aspect of a business which involves people at every level of an organization working together to achieve the same objectives. The three categories stated above address the different needs of a company and allow a specific focus in order for these needs to be met. The most important internal control to implement is over financial reporting. This involves preparing the financial statements so that they are presented fairly and accurately based on generally accepted accounting principles and any other financial reporting framework used by management (Landes & Ratcliffe). Fair presentation is when the accounting principles chosen by management have general acceptance and are appropriate in the circumstances. Financial statements must also reflect underlying transactions...
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...CHARTER OF THE FINANCE AND AUDIT COMMITTEE OF THE ORACLE CORPORATION BOARD OF DIRECTORS (As last amended by the Board of Directors on July 13, 2008) I. PURPOSE The primary function of the Finance and Audit Committee (the “Committee”) is to provide advice with respect to the Corporation’s financial matters, to oversee the accounting and financial reporting processes of the Corporation and the audits of the financial statements of the Corporation, to assist the Board of Directors in fulfilling its oversight responsibilities regarding finance, accounting, tax and legal compliance, and to evaluate merger and acquisition transactions and investment transactions proposed by the Corporation’s management. Consistent with this function, the Committee endeavors to encourage continuous improvement of, and foster adherence to, the Corporation’s policies, procedures and practices at all levels. The Committee’s primary duties and responsibilities are to: • • • • • • Serve as an independent and objective party to monitor the Corporation’s financial reporting process and internal control system. Review and appraise the audit efforts of the Corporation’s independent accountants and internal audit department. Evaluate the Corporation's quarterly financial performance as well as its compliance with laws and regulations. Oversee management's establishment and enforcement of financial policies and business practices that are designed to manage business and financial risk and to comply with significant...
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...Crystal McPherson Homework-Week 1 1-18: a. The services provided by Consumers Union are comparable to the assurance services provided by that of a CPA firm. Both the services of Consumers Union and that of a CPA firm are designed to improve the quality of information for decision makers related to their services. While CPA’s are valued for their independence, Consumers Union is valued for their reports due to their independence of the products tested. b. The concepts of information risk for the buyer of an automobile and for the user of financial statements is generally the same. Both parties are worried with unreliable information being provided. The buyer of an automobile would be concerned with misinformation or lack of information provided by the manufacturer or dealership. Where the user of a financial statement would be concerned with unreliable information that is provided in the financial statements. c. Remoteness of information: It can difficult for an automobile buyer to obtain necessary information about either an automobile without incurring considerable cost to them. The automobile buyer does have an advantage though of possibly knowing other users who are satisfied or dissatisfied with a similar automobile. Word of mouth. Biases and motives of provider: There is a conflict between the automobile buyer and the manufacturer. The buyer wants to buy a high quality product at minimum cost whereas the seller wants to maximize the selling price and...
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...Internal Audit Guidebook Providing a framework for understanding and delivering Grant Thornton’s Internal Audit Services in a consistent, high-quality way 2012 Internal audit guidebook 1 Contents Page Introduction 2 Common service delivery methodology 6 Determine client needs 8 Scope and arrange work 10 Plan 13 Analyze and assess 20 Report and recommend 28 Implement 32 Evaluate 33 Determine business and technology context 36 Manage engagement performance, quality and risk 38 Communicate and enable change 40 Appendix 42 Internal audit engagement checklist 43 © Grant Thornton LLP. All rights reserved. Updated August 1, 2012 Internal audit guidebook 2 Introduction What is internal audit? The Institute of Internal Auditors (IIA) defines internal auditing as: Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. (1010) An internal audit objectively assesses the management of risks that a company faces. (2100 series) The aim is to • understand the current state, • assess the current state using appropriate standards and criteria, and • develop findings and recommendations...
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