An independent CPA firm would audit a company's financial statements using the financial information in the statements and generally accepted accounting principles as criteria. An IRS auditor would use the tax information filed and tax laws as criteria. An internal auditor would use information from the company's payroll processing system and metrics of efficiency and effectiveness as criteria to evaluate the system. The roles of independent auditors, government auditors, tax agents, and internal auditors all involve evaluation of information against certain criteria but they differ in purpose and oversight responsibilities.
1. Assignment 1
1. Discuss the followings
a) To do an audit, it is necessary for information to be in a verifiable form and some
criteria by which the auditor can evaluate the information.
i. What information and criteria would an independent CPA firm use when
auditing a company’s historical financial statements?
ii. What information and criteria would an Internal Revenue Service auditor use
when auditing that same company’s tax return?
iii. What information and criteria would an internal auditor use when performing
an operational audit to evaluate whether the company’s computerized payroll
processing system is operating efficiently and effectively?
b) Discuss the similarities and differences between the roles of independent auditors,
OFAG auditors, internal revenue agents, and internal auditors.
Assignment 2
1. Discuss the followings:
a) The similarities and differences between financial statement audits, operational
audits, and compliance audits. Give an example of each type.
b) The differences and similarities between the roles of accountants and auditors.
What additional expertise must an auditor possess beyond that of an accountant?
