...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...
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...thing that comes to their mind is the IRS. Internal audits however, can help managers manage the organization profitably and more efficiently if internal audit procedures are completed on a regular schedule. Business risk is the risk an entity will fail to meet its objectives, (Louwers, Ramsay, Sinaso, & Strawser, 2007). If an organization fails to meet its objectives repeatedly then the company will fail. To minimize any type of risks decision makers will demand timely, relevant, and reliable information. Information professionals, such as auditors will help to fulfill these demands. According to the American Accounting Association (1973), “Auditing is a systematic process of objectivity obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to interested users.” Therefore, the following are four environmental conditions that increase user demand for relevant and reliable information: (1) Complexity, (2) Remoteness, (3) Time sensitivity, and (4) Consequences. Complexity Presently, transactions and events are far more complex, in a way that decision makers and investors do not have the expertise to handle them. However, a professional, such as an internal auditor is trained to collect, compile, and summarize the key operating information on his or her own. An internal auditor has the expertise to break down the complex...
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...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...
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...Running head: RECOMMENDATION BRIEF FOR AN INTERNAL ACCOUNTANT Recommendation Brief for an Internal Accountant Claudia I. Hernandez University of Phoenix Recommendation Brief for an Internal Accountant When a company is experiencing difficulty controlling their accounting functions, hiring an internal auditor will alleviate some of the problems. Internal auditing helps companies to look at ways to improve and achieve short-term and long-term objectives. Internal auditors are hired to perform internal audits that look at a company’s operations, investigating fraud, financial reporting, safeguarding assets, and compliance of the laws and regulations set for companies. The internal auditors are employed to improve a company’s internal controls. Effective working internal controls detect and prevent fraud that is tested by internal auditors. A company must evaluate the experience and educational background of a potential internal auditor before making a decision to ensure the auditor is capable of meeting the company’s needs. Justifying the benefits of using an internal auditor Operational auditing is perhaps the most beneficial use of an internal auditor for a company experiencing difficulty controlling accounting functions. Operational auditing focuses on making recommendations on efficient use of resources, achievement of business objectives, and compliance with company policies (Louwers, Ramsay, Sinason, & Strawser, 2007) An operational audit gives you a three...
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...Brief on an Internal Auditor Recommendation Robin Block ACC/544 July 2, 2012 Brief on an Internal Auditor Recommendation An internal auditor can be beneficial to help alleviate the challenges being experienced in your company with internal controls and accounting functions. Internal auditing can provide added value and improve your company’s operations (The Institute of Internal Auditors, 2012). By hiring an internal auditor your company can maintain effective internal controls and reduce business risks (Lehman Brown, 2009). Benefits Your company can enjoy the benefits of having an in house auditor. An internal auditor will be familiar with the culture and direction of the company allowing the auditor to have some foresight in risks that could come. The Internal auditor will work independent from any management within the company, to ascertain the risks, evaluate the risks and report a recommended procedure or policy to mitigate any risk. ” Internal auditors make recommendations that result in additional profits or cost savings for their companies” (Louwers, Ramsay, Sinason and Strawser, 2007, p. 628). The auditor can conduct a number of different audits which can be an advantage the company. A compliancy audit of the HR department can reveal if the company is in compliance with Federal and State labor laws and fair hiring practices. An operational audit can help management understand and execute responsibilities more affectively and improve profitability...
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...Recommendation Brief for an Internal Auditor Candace L. Beard ACC 544 May 23, 2011 Joseph Poletti Recommendation Brief for an Internal Auditor Internal auditing helps companies to look at ways of improving and achieving short-term and long-term objectives. Internal auditors are hired to perform internal audits that look at a company’s operations, investigating fraud, financial reporting, safeguarding assets, and compliance of the laws and regulations set for companies. The internal auditors are employed to improve a company’s internal controls. Effective working internal controls detect and prevent fraud that is tested by internal auditors. Benefits of Internal Auditor Understanding the benefits of an internal auditor will help in the decision of hiring an internal accountant. Internal auditors verify the effectiveness of their organization's internal controls and check for mismanagement, waste, or fraud. They examine and evaluate their firms' financial and information systems, management procedures, and internal controls to ensure that records are accurate and controls are adequate. They also review company operations, evaluating their efficiency, effectiveness, and compliance with corporate policies and government regulations (Bureau of Labor Statistics). As an internal auditor he or she will be able to look for any mistakes and address them in the reports. Finding a professional to fill the role of an internal auditor benefits the structure of a growing business...
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...Recommendation Brief for an Internal Accountant Kandi Kolka ACC/544 January 19, 2015 Bunney Schmidt Recommendation Brief for an Internal Accountant When a company hires an Internal Auditor it is usually to improve the business or make sure internal accounts are effective. An auditor would be hired to come into the business and go through the accounts. The accountant would make sure that the company is complying with the government. The auditor would look for internal fraud, operations, and assets. The auditor is hired to make sure the company is profitable and if not what they should do to become profitable. There are three ways for a company to change profitability; by increasing sales, decreasing variables and or reducing average operating expenses. An internal accountant is brought into a business to improve the effectiveness of the internal day to day operations. The internal accountant will test or audit the internal controls for mismanagements and fraud. The internal auditor will make sure that the business is complying with all of the government’s regulations. If the company is not complying this could mean serious trouble from the government. This is why it is important to bring someone who has a vast amount of knowledge into view the components of the company. When an individual internal auditor is brought into a company they may not have exact knowledge of the company but they know what they are looking for. They will investigate the books of the company....
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...Recommendation Brief for an Internal Accountant Recommendation Brief for an Internal Accountant Internal accountants or auditors can be beneficial to a company when there are problems within their accounting functions that are causing harm to the financial records. Internal auditors are able to perform many different tasks for the company and if they are an employee of the company already, it can save time when there is an issue because he or she has the knowledge of the internal control systems and may be able to fix the bug or problem in less time. Internal auditors are usually employed because they can compare what the company has now and what it should be in order to stay in compliance with the SOX Act (Advameg, Inc., 2011). Internal accountants can review how reliable the financial information is, review the company’s systems to make sure they are in compliance, make recommendations to improve the system, check the assets of the company and how they are safeguarded, and advise the company if their resources are being used adequately (Advameg, Inc., 2011). Internal accountants can perform different types of audits for the company such as an operational, program, fraud, ethical business practices, compliance, financial, control self assessment audits as well as a systems development and life cycle review (Advameg, Inc., 2011). Employing an internal accountant can save the company money because the company will not have to hire auditors to perform the different...
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...Recommendation Brief for an Internal Accountant for ABZ Company The importance of internal controls in an organization or a company cannot be over-emphasized in the wake of various laws geared toward protecting investors in publicly traded companies, especially the most recent Sarbanes–Oxley Act of 2002, which requires top management to include in its annual report a statement showing responsibility for establishing and maintaining adequate internal control over financial reporting. Stabilizing the company’s ship on turbulent financial waters or scaling mountains of government regulations will require strong and effective internal control. The main objective of internal audit function is ensuring the achievement of a company’s objective in a broad perspective, which includes operations, financial reporting, and compliance to laws and regulation. According to Cain (2010) “The benefit of internal audit is to ensure that the business is achieving its objectives, operating in a cost effective way and maximizing its return on investments while at the same time managing risks effectively.” IIA Standards 2110 and 2210 define the roles of an internal auditor to include “(1) financial audits of financial reports and accounting control systems, (2) compliance audits that ensure conformity with company polices, plans, and procedures and with laws and regulations, (3) operational audits that evaluate the economy and efficiency of business process, (4) audits of effectiveness in...
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...Recommendation Brief for an Internal Accountant Lisa Tucker ACC 544 April 8, 2013 Fred Johnston Recommendation Brief for an Internal Accountant A client has an out-of-control system that is in need of change to get it back into control. Internal controls are an important part of a company. The role of internal controls is to keep mistakes from occurring as much as possible. It also aids in preventing individuals from being dishonest. The system the client is using is out-of-control and it is highly recommended that the company hire an internal accountant. The internal can provide information to managers to limit any problems and audit the system internally. Implementing internal audits will help build credibility within the company and keep violations from occurring that would violate laws and regulations. An internal auditor would work with management and owners to analyze important areas of the company’s performance. These areas that would be analyzed would include assets, accuracy of financial information, and ensuring that government and industry standards and regulations are being followed. Another point that the internal auditor would confirm is that the policies and procedures are aligned with the company’s goals. An internal auditor would add security and be an asset to the company. The first step an internal auditor would initiate would develop a plan to evaluate the current control system that is in place. Any deficiencies...
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...Recommendation Brief Julio Santos University of Phoenix Internal Control Systems ACC/544 Joseph Poletti February 08, 2013 Recommendation Brief Benefits An internal auditor is a person who works for a company and learns everything about the company and has intricate knowledge of the workings. They will work specifically in one company and be able to concentrate on everything in the company. Auditors can catch problems when they arise and bring them to attention to the people in charge before releasing reports so there are no problems. They also guarantee systems are working correctly and safeguards are in place and working properly. One last thing is that possessing an internal auditor will save company money from having to hire a person to bring in and complete his or her audits. Qualities At the very least an internal auditor should have a Bachelor’s degree in Business Administration but some companies prefer a Master’s degree in Accounting. Although the Bachelor’s degree would provide basics and a simple knowledge of the expectations of the person the Master’s would be much more in-depth and cover every area a person would need. In completing an internal audit a person needs to know everywhere to look in the company to find every aspect that affects profits and cause problems. Financial reports present complications and difficulties for the average person to read and understand. A person needs trained on what to look for and where to look. A Master’s program will...
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...Recommendation Brief for an Internal Auditor Jennifer Perkins December 9, 2013 ACC 544 Tracie Youngblood An internal auditor certifies a company’s financial statements are timely, relevant, and reliable. According to the American Accounting Association (1973), “Auditing is a systematic process of objectivity obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to interested users.” Internal auditing assists a company minimize business risks by satisfying the demand of timely, relevant, and reliable information. The following are four environmental conditions that increase user demand for relevant and reliable information: (1) Complexity, (2) Remoteness, (3) Time sensitivity, and (4) Consequences. Complexity Currently, transactions and events are far more complex, in a way that decision makers and investors do not have the expertise to handle them. However, a professional such as an internal auditor is trained to accumulate, gather, and sum up the crucial operating information on his or her own. An internal auditor has the expertise to break down the complex transactions and events while making that information more understandable for the decision making process. Remoteness Decision makers and potential partners are often separated by distance, time, and a lack of expertise. Depending on the distance...
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...Recommendation Brief for an Internal Accountant Internal auditing helps companies to look at ways of improving and achieving short-term and long-term objectives. Internal auditors are hired to perform internal audits that look at a company’s operations, investigating fraud, financial reporting, safeguarding assets, and compliance of the laws and regulations set for companies. The internal auditors are employed to improve a company’s internal controls. Effective working internal controls detect and prevent fraud that is tested by internal auditors. Benefits of Internal Auditor Understanding the benefits of an internal auditor will help in the decision of hiring an internal accountant. Internal auditors verify the effectiveness of their organization's internal controls and check for mismanagement, waste, or fraud. They examine and evaluate their firms' financial and information systems, management procedures, and internal controls to ensure that records are accurate and controls are adequate. They also review company operations, evaluating their efficiency, effectiveness, and compliance with corporate policies and government regulations (Bureau of Labor Statistics). As an internal auditor he or she will be able to look for any mistakes and address them in the reports. Finding a professional to fill the role of an internal auditor benefits the structure of a growing business, because it prevents the creation of faulty processes and limits the liability the company may be exposed...
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...Internal Auditor This brief will study the subject of using an internal auditor to assist a company with a system currently not working. It will also examine a candidate qualified to assess the organization and can make recommendations to the company. This can help ensure the company conforms to regulations set forth by the Securities and Exchange Commission (SEC), System Not Working The company has realized that their risk management efforts were not meeting expectations to problematic situations. They are looking to implement procedures that can ensure the company can control their systems. The company has divisions not always following the correct processes, such as existing safeguards that can cause inventory control to be nonexistent and cash flows to be inaccurate. When the departments are not working together in an effort to complete goals and follow policies the company needs to implement internal controls. One of the requirements that the SEC has for management is that they take “responsibility for establishing and maintaining adequate internal control over financial reporting” (U.S. Securities and Exchange Commission, 2013, Summary). What this means is that to be compliant with Section 404 of the Sarbanes-Oxley Act (SOX) the company will need the assistance of an internal auditor to help management’s assessment and ensure they are within compliance. Working System The main requirement for...
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...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...
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