Conducting Internal Audits To Improve Operations

Companies Frequently Conduct Internal Audits Of Their...
Companies frequently conduct internal audits of their business operations. Internal audits are conducted in a professional manner, designed to provide
company management with an unbiased and objective view of how the company is operating. Often times the process is conducted by an outside
agency, or a privately hired internal auditor.
Some companies have a full staff employed to perform continuous audits of various operations. Normally there is specially appointed audit committee,
overseen by the company board of directors, or trustees. Internal auditors report directly to this established committee and will often be asked to make
recommendations to both the board of directors and upper level management.
Definition of an Internal Audit ... Show more content on Helpwriting.net ...
Most of the adjustments will pertain to protection of employee rights to privacy, plus sensitive copyright, patent, or trademarks.
В·Official Notification
All internal audits are announced. Only external audits from outside agencies are scheduled without the prior notification of all parties involved in the
audit. External audits are usually to uncover a legal or ethical violation, whereas internal audits primary purpose is to prevent such. Department heads,
supervisors and all employees involved are usually given written notification prior to the conduction of an internal audit.
В·Document Requests
Once the organization, business and all necessary parties have received official notification, the auditor will make a formal request for all documents
stated in an audit preliminary checklist. This checklist requesting documents is usually attached to the notifications.
It may contain a duplicate of any previous audits, financial statements, receipts, ledgers, production reports, or employee performance evaluations. The
auditor may ask for profit/loss projection charts, copies of board of directors meetings and committee minutes. Internal auditors that are not part of the
company staff, will also request bylaws, employee rules and standards, plus an compliance management policies.
В·Audit Plan

The auditor will review the information enclosed in the documents and
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Internal Controls And The Audit Process
During the audit of the financial statements we will be assessing the internal controls in use as mandated by the Sarbanes–Oxley Act of 2002. The act
was designed to enhance corporate responsibility as it relates to financial reporting issues. Section 404 covers the internal controls that have been
setup by the company. Internal controls are designed to protect the assets of a business from misuse or loss. Internal controls also help the business to
streamline processes so that goals can be achieved at the best rate of return from the use of available assets. The remainder of this letter contains an
overview of section 404 and other regulations relating to the audit of internal controls and a synopsis of internal control risks that have been identified
within Apollo Shoes Inc. We will also describe the relationship between internal controls and the audit process as well as outlining our responsibilities
in detecting and reporting fraud.
Section 404 of the act requires all publicly traded companies establish internal controls and procedures for financial reporting. The system of controls
must be documented, tested, and maintained to ensure their effectiveness. To comply with section 404 Apollo Shoes Inc. has to submit an annual
report that details the four following key elements;
пЃ¶Statement of responsibility issued by Apollo's chief executive officer and the chief financial officer for establishing and maintaining adequate
internal control structure and procedures

Internal Control Audit Standards
Jurgen Skembi Homework5 Internal Control Audit Standards a. For what purposes should an auditors' understanding of the internal control
components be used in planning an audit? An auditors' understanding of the internal control components should be used for 3 reasons: a) To identify
the potential misstatement that might occurs b) To identify the factors that affect the risk of material misstatement c) To influence the design of
substantive procedures b. What is required for an audit team to assess control risk below the maximum level? It is required for an audit team to assess
control risk below the maximum level to identify specific control procedures and policies relevant to specific assertions that... Show more content on
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If the scope limitation is due to inability to gather sufficient evidence regarding to potential material weaknesses, it is necessary to include the
definition of the material weakness as well. d) Modify the opinion paragraph, by stating that "the scope of our work was insufficient to enable us to
express an opinion, so we don't express an opinion". c. Other auditors have audited a significant component of the company, including internal control
over financial reporting relating to the component. If the auditors conclude that the internal control over financial reporting is not maintained
effectively by management, auditors should express an unqualified opinion on management's assessment of internal control over financial reporting.
On the other hand, an adverse opinion should be issued on the effectiveness of the company's internal control over financial reporting. в–Є The
modification that are needed to be made: a) Modification of introductory paragraph, stating that the management's assessment didn't maintain an
effective internal control over financial reporting. b) Adding a paragraph that defines any material weakness identified during the audit. c) Modification
of opinion paragraph, stating that because of the effect of the material weaknesses captured, the company has not maintained an effective internal
control over financial reporting. d. The auditors believe that the entity's management has

Use Of Internal Audit By Australian Companies
The use of internal audit by Australian companies
Abstract: The main purpose of this study is to identify the reason behind the voluntary use of internal audit by public listed companies and to determine
the factors that lead listed companies to have an IA function. There are number of reasons behind the implementation of IA function and it is strongly
related with risk management, indication of effective internal controls and efficient corporate governance. This study is based on the work done by
Jenny Goodwin–Stewart and Pamela Kent(2006). They examined and study the data from the annual reports of public listed companies. This paper
also provides detailed information on the need of Internal Audit and examines the relationship between ... Show more content on Helpwriting.net ...
Internal audit as a risk management mechanism Internal auditors can add value to the entity by providing assurance that its risk exposures are properly
understood and managed (Walker et al., 2003; Leithhead, 1999). Internal audit should play a key role in monitoring a company's risk profile and
identifying areas to improve risk management processes (Lindow and Race, 2002). As Walker et al. (2003, p. 52) assert, internal audit can "help
organizations identify and evaluate risks, moving the profession into the front line of risk management". We would therefore expect there to be a link
between the use of internal audit and the company's commitment to sound risk management. A strong organizational commitment to managing risks
requires the development of a risk–based culture within the company (Kwan, 1999). Such a culture is established by the practices of senior
management and the board of directors (Steinmetz and Arthus, 2001) and should result in the development of an integrated risk management
framework (Kwan, 1999). One indication of an integrated framework is the existence of a separate committee or group responsible for risk
management, comprised of directors and senior management. Internal audit can then provide the required support to ensure that internal controls are in
place to adequately monitor the identified risks. We therefore predict that those companies that have established a separate risk management committee
are

Internal Of An Internal Communication Audit
Task 2
2.1Internal corporate communications audit
The primary purpose of conducting an internal communication audit is to ensure the corporate communication strategy in the organisation whether the
proposed strategy meets the company's goals. Audit can be processed by observations, analysis and evaluations, interviews, focus groups and surveys
of employees and other key stakeholders who support needed to improve the internal communication strategy.
Internal communication audit process
Channel mapping
Personal interviews
Focus groups
Questionnaire
Analysis
Reporting
Feedback & action
Follow up survey
(Scholes, 1997)
2.2 conduct an internal corporate communications audit

Routine Operations of IT Unit: The Analysis
The IT unit in the Organization was analyzed for its working. The Organizational communication strategy was observed closely, right after the new
project requirements were handed over to the unit head by the Business unit. The new project required Oracle as the technology. Apparently, the IT
head had no clue about the financials involved in acquiring the project from client. He did not look keen on knowing anything apart from the
technology that they would be working on, and the final deadline that the client had asked for.
Information Flow from Business to IT unit
The information was listed as bullet points, printed on a plain white A4 sheet of paper, highlighting the business requirements, important links,
deadlines and the e–mail IDs of the members

Analysis of Internal Audit Function in Poland Empirical...
B USINESS, MANAGEMENT AND EDUCATION
ISSN 2029–7491 print / ISSN 2029–6169 online
2011, 9(2): 236–247 http://dx.doi.org/10.3846/bme.2011.16 ANALYSIS OF INTERNAL AUDIT FUNCTIONING IN POLAND–
EMPIRICAL RESEARCH FINDINGS
Edita BieliЕ„ska–Dusza
Department of Strategic Analysis, Cracow University of Economics, ul. Rakowicka 16, 31–510 KrakГіw, Poland
E–mail: edytadusza@gmail.com
Received 18 November 2010; accepted 15 January 2011
Abstract. The purpose of the article was to present the research conducted in companies, concerning the functioning of internal audit in Poland. During
the research, the author identified a number of barriers reducing the efficiency of the cells of internal audit and audit as an instrument for company ...
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On the other hand, the private sector includes: companies of national natural persons, companies of other national private entities, companies of foreign
entities.
2
In the public sector the obligation of internal audit implementation is regulated by acts and regulations such as, among others: the Act of 27 July 2001
on the amendment of the Act on public finance, of the Act on organization and operating mode of the Council of Ministers and the scope of operation
of ministers, of the Act on activities of government administration and of the Act on civil service, Journal of Laws 102(1116): 7483–7493; The Act of 30
June 2005 on public finance, Journal of Laws 249(2104): 27–34, with later amendments; Announcement No. 1 of the Minister of Finance of 30 January
2003 on announcing "Standards of financial control in public finance sector entities", Official Journal of the Minister of Finance 3(13): 1–8;
Announcement No. 11 of the Minister of Finance of 26 June 2006 on standards of internal audit in public finance sector entities, Official Journal of the
Minister of
Finance 7(56): 1–13. Announcement 16/2006 of the Minister of Finance of 18 July 2006 on announcing "The code of ethics of the internal auditor in
public finance sector entities" and "The card of internal audit in public finance sector entities", Official Journal of the Minister of Finance 9(70): 1–6.
Regulation of the Minister of Finance of 10 April 2008 on the detailed

Assessing The Internal Audit Function
Assessing the Internal Audit Function
Auditing standards are published by the Public Company Accounting Oversight Board (PCAOB). As such, the PCAOB published Auditing Standard
Number 5 (AS 5), which recommends integrating an audit of intern controls with the audit of a firm's financial statements (PCAOBUS, 2007). An
auditor's objectives of the internal controls audit and that of the financial statements are not identical, and the auditor must perform the audits to
achieve both objectives.
Internal Audit Objectivity Auditors of a firm's financial statements, be they external or internal auditors, have the primary objective of providing users
of said financial statements with an opinion on the fairness of reported information to engender the confidence of said users (AICPA, 2012). As such,
auditors must adhere to requirements set forth by the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants
(AICPA). Among such requirements; objectivity is essential in performing audit duties be they external or internal audit functions. Moreover, in
assessing internal controls and risks to the organization, internal auditors must also conduct themselves with objectivity and independence (TuЕЎek &
Pokrovac, 2012). Whereas external auditors are independent of the firm, internal auditors face more scrutiny of their objectivity as they are employed
directly by the firm of which they audit. Therefore, more important than independence is objectivity to

Effects Of Internal Audit Practices On Financial...
EFFECTS OF INTERNAL AUDIT PRACTICES ON FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KENYA (A CASE
STUDY OF KENYA COMMERCIAL BANK) GIDALI MUHINDI FRANKLINE A Research Proposal in Partial Fulfillment for the Bachelor of
Business Administration of the Technical University of Mombasa 2016 DECLARATION I declare that this research proposal is my original work and
has not been presented for a degree award in any other university. Signature................................. Date.............................. Gidali Muhindi Frankline. BBA
/048J/2013. This project has been submitted for examination with our approval as university supervisors.
Signature_________________________Date: ______________________ Ms.Umulkulthum Musa Yeya. Technical University of Mombasa.
DEDICATION This research proposal is dedicated to my father who taught me that the best kind of knowledge to have is that which is learned for
its own sake and that learning is a treasure that will follow its honor everywhere. It's also dedicated to my mother who taught me that even the
largest task can be accomplished if it is done one step at a time since ,opportunities are usually disguised as hard work so most people don't recognize
them. ACKNOWLEDGEMENT First and above all, I would like to thank God, the Almighty for granting me the capability to write this research
proposal. Madam Umulkulthum Musa Yeya has been the ideal research proposal supervisor. Her sage

Internal Audit Management
Internal Audit Management – The Challenges
The current business environment has turned the spotlight on the role that a internal audit system must play within the larger drive towards effective
governance, risk, compliance and quality management. An internal auditor has to work as a Technology savvy in–house that not only reports problems,
but also gives constructive suggestions to line managers about how to improve the performance of the business. As a result, the internal auditing and
corporate control environment are receiving increased attention and resources, necessary to comply with the regulations.
Despite the increased exposure and training from executive management, internal audit departments face many challenges. A few of them have been
discussed below:
Risk Strategies:
The credit crisis and resulting uncertain economic conditions have forced organizations to scrutinize their risk exposures in greater detail. Most of the
organizations, however, support quick developed risk management strategies. "Audit committees are taking a hard look at risk management processes,
with a particular focus on the quality of risk inventories and assessments, as well as the usefulness of management's risk reports. Key challenges
include identifying risks in early stages, and preparing to properly deal with consequences.
Limitation of resources
In todays globalized world large companies operate in multiple countries. Large distances separate corporate headquarters from offices

Assist The Conduct Of Internal Audit
1875
Assist the conduct of internal audit
4/7/2015
Meenakshi
TASK 1
1.1.1
INTEGRITY: Integrity is the main moral objectives or principal of the company.
Methodology aims of financial records:
All financial statements made very fairly and profitable.
Using the best financial standards techniques and book keeping methods.
Accounts made by just the master bookkeeper.
Provide the independent objective examination of the financial statements.
In financial records mainly focus on internal controls of financial records.
All the bank checks consistently issued by the company.
1.1.2
Methodologies developed be implemented:
Methods are an important part of a company to help maintain the proper documentation. Such methods can be used in society PIFCO ZEN CHEN.
This leads to eliminate missed deeds of all financial documents of the company or the head of the company, as Director such methods in the company.
The director of the company also has management of all a law firm. Director should all actions taken into account by all employees. Such actions are
any of the financial or accounting records. The auditor checks for each manipulation in numbers or accounts. So you must have in mind, what are the
accounts clear and all the information is correct.
1.2
Warehouse have 25$ million worth of the stocks and that's overvalued stock.
No provision has made by warehouse while the debtors accounts worth is 9$million.

They disclosure the overdraft facility and that's not

Internal Audit Function and Fraud Detection in Government...
CHAPTER ONE
1.0Introduction
This chapter will cover the background of the study, the statement of the problem, the purpose of the study, the objectives, the research questions, and
the scope, the significance of the study and the structure of the report.
1.1Background of the Study
According to Hector Perela, (2009), Internal auditing function with other intervention mechanisms like financial reporting and external audit to helps
maintain cost–efficient contracting between owners and managers. It is designed by government agencies to add value and improve organizational
performance. It helps organizations accomplish their objectives by bringing a systematic, disciplined approaches to evaluate and improve the
effectiveness of risk ... Show more content on Helpwriting.net ...
Farmers must select activities that will result in marketable, profitable goods, with low production costs and about which there is ample knowledge in
the district.
One challenge for NAADS is that it spreads very slowly. It does not target whole villages, only groups of people, and then only a few members of a
group get assistance initially, while other members wait sometimes for a up to a year before getting any much needed support.
When it began, the service was only offered to 24 sub–counties in six districts. It has since spread to all 79 operational districts, but is still only
reaching a few farmers in a few sub–counties within them, which means many farmers are not served.
A 2007 study by the International Food Policy Research Institute (IFPRI) found that while NAADS had promoted the use of improved production
technologies and high–yielding crop varieties, only a few farmers were using them even within sub–counties where there service was operating. As a
result there was no difference in yield growth between NAADS sub–counties and those without its assistance.
In early 2009, a report by Uganda's auditor general concluded that 63% of money allocated to NAADS activities was wasted because farmers disliked
classroom–style training given by contracted service providers. The Ugandan president, Yoweri Museveni, publicly condemned this approach to
training as

Internal Auditors : Internal Audit
Internal Auditors An internal auditor is an independent, objective assurance and consulting activity designed to add value and improve and
organization's operations. Internal auditors search for risk that could potential cause a company to not reach their stated goals. In order for a internal
auditor to do their job effectively and efficiently, the executives must be willing to work with the internal auditors through tough issues and be open for
change and improvements. Internal auditors must have the full support of the audit committee of the board of directors. Internal Auditors and
Management rarely have the same views but must work together for the better of the company. Internal auditors pride themselves in saving their
company from losing thousands some times millions in revenue do to the risk that go undetected. Internal Auditors are responsible to offer insight and
advice to their corporations. Many times because of their expertise and knowledge of controls, Internal auditors are consulted on projects to ensure that
risks are considered and controls are built into the process at the beginning of the project. Internal auditors offer insight on strategic risk and advice to
management to avoid any risk later on. Internal auditors evaluate the significance risk and the negative effect it may have on the company in the
present and near future. Internal auditors are responsible to assess controls, to make sure that they are adequate to help when risk threatens any

Internal Audit Of A Business
While many people think of management and accounting positions when mentioning a business, one important role that goes unnoticed is internal
audit. Internal audit is an important part of a business. Without internal audit, many businesses would be subjected to theft and fraud. One should note
that theft and fraud is not the only reason to have an internal audit. Having an internal audit system can help a company protect against lawsuits from
employees and customers. Placing policies and procedures around a company's assets is crucial to the organization's success in the future. The policies
and procedures put in place by the Institute of Internal Auditors are guidelines the company should not take lightly. Every year the company loses...
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For example, 2013 was a rough year for companies trying to keep their customers' information out of the hands of hackers. When Target was
hacked in December of 2013, but released an official statement in January, it was thought to be one of the largest security breaches in retail history.
Many people would expect supercenters like Walmart and Target to experience hackers trying to access their system, but even more shock came
when The Home Depot experienced a system breach. In September of 2014, the company Home Depot was hacked. Home Depot hackers were able to
access more than 56 million credit and debit cards and over 53 million email addresses. According to Michael Winter of USA Today, "Hackers used a
vendor's stolen log–on credentials to penetrate Home Depot's computer network and install custom–built malware that stole customer payment–card
data and e–mail addresses" (Winter). Routinely, hacker's use the log–on credentials of a vendor and install malware. The same issue happened to Target
when their system was hacked. Since September of 2014, Home Depot has spent more than $62 million fixing their systems and offering one year of
credit monitoring services to

The Audit Report And Internal Control E
The Audit Report and Internal Control Evaluation
Team D Auditing has been evaluating the evidence presented by Apollo Shoes. The audit team has developed an audit report in response to the audit
and has also provided a description of the evidence, a description of the account sampling and testing procedures used, and has also given a brief
description of the value of an audit report. This report is only to reflect Team D's opinion regarding Apollo's internal controls,financial statements, and
management's assessment.
Management Responsibilities
We have audited the financial statements of Apollo Shoes Inc., including thebalance sheet, income statement, and statement of cash flows. The
company's management is responsible for ... Show more content on Helpwriting.net ...
However, we are confirming the efficiency and effectiveness of the internal control, based on COSO framework. It is important to mention that Apollo
Shoes has a litigation suit in the preliminary stage for $12,000,000, which intend to defend them self. It is reasonable that the loss could reach
$10,000,000 after legal fees (Louwers, 2007). No adjustments have been made to the financial statements. Since Apollo has lost his major customer,
this has raised a substantial doubt about the ability that Apollo Shoes Inc. can continue as a going concern. The financial statements do not include any
adjustment that contemplates this uncertainty.
Description of Evidence The evidence used for the audit included several items presented by Apollo Shoes. The team was presented with the SEC
10–K filing from 2006, as well as the minutes from the audit committee meeting. The team also reviewed the company Letter to the Shareholders. The
SEC filing provided us with historical financial statements and a wealth of other information about the company, including quarterly unaudited
operation results. The team also reviewed the company accounting and control procedures manual to evaluate the controls over the accounting
functions of the

Internal Audit Department 's Independence And Objectivity
As requested, I have prepared the following memorandum with the aim of reassuring senior management about the internal audit department's
independence and objectivity.
I have provided detail on consideration of independence and objectivity, based on guidance from the International Institute of Internal Auditors (IIA). I
have also charted steps should taken by TechNet to ensure the internal audit department's independence and objectivity.
The Institute of internal Auditors (IIA) defines independence as "the freedom from conditions that threaten the ability of the internal audit activity to
carry out internal audit responsibilities in an unbiased manner."
IIA defines objectivity as
"An unbiased mental attitude that allows internal auditors to perform engagements in such a manner that they believe in their work product and that no
quality compromises are made."
The internal audit department at TechNet is in compliance with the IIA's International Standards for the Professional Practice of InternalAuditing.
Attribute Standards 1100 of the IIA require that "the internal audit activity must be independent, and internal auditors must be objective in performing
their work."
Independence refers to the liberty of the internal auditor to carry out activities in an unbiased manner.
Objectivity refers to an unbiased mental attitude of the internal auditor without subordinating their judgement (findings) to others.
To assist in achieving independence and objectivity the IIA

The Independence Of The Internal Audit Function
This paper critically analyses the independence of the internal audit function through its relationship with management and the audit committee. Given
the growing role of internal auditing in contemporary corporate governance and independence has gained renewed attention.
INTRODUCTION
The role of internal audit is to provide independent declaration that an organization's threatadministration, governance and internal control processes are
functioning effectively. Internal auditors deal with concerns that are essentially important to the existence and success of any organization. Unlike
external auditors, they aspect beyond financial possibilities and statements to reflect wider problems such as the organization's reputation, development,
its power on the location and the approach it treats its organizations.In summary, internal accountantssupport organizations to thrive.
The Specialized accountants deliberates to those who are compensated employees, associates, executives, owner or the organization and ... Show more
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This includes the indirect ability of management to influence the career prospects of internal auditors, as well as the budget and planning of the
internal audit function. This is exacerbated by internal auditors themselves using the function as a stepping stone to advance their career objectives. It
also can be argued that the independence theory may be lost in such a culture, especially if it is combined with people within the organization
perceiving internal auditors as partners, thereby subjecting the internal audit function to pressures threatening its independence, rather than recognizing
the internal audit function as an independent assurance function("A Critical Analysis Of The Independence Of The Internal Audit Function: Evidence
From Australia: Accounting,Auditing & Accountability Journal: Vol 22, No

How Internal Audit Is An Important Part Of The Company...
How does internal audit participate in risk management?
Abstract
Internal audit is an important part of the company management system, it is the company 's core business group. But how does it participate in risk
management? This essay will have a short discuss on it.
Introduction
"Practice of Internal Auditing Standards" of the internal audit made a clear definition: Internal auditing is an independent, objective assurance and
consulting activity designed to add value for the organization and improve the operational efficiency of organizations. It uses a systematic, disciplined
approach to evaluate and improve risk management, control and governance processes to help organizations achieve their goals (SPIRA, L. F. &
PAGE, M. 2003). ... Show more content on Helpwriting.net ...
In this environment, in order to enhance the efficiency, company need to establish an independent control system. As a further control of the company,
the various departments of enterprises can be effectively supervised by internal audit to achieve internal supervision and self–discipline of enterprises
(BEASLEY, M. S., & HERMANSON, D. R. 2005). Therefore, the internal audit system is established to achieve self–improvement, serve as an
important part of the objective requirements of internal oversight, but also part of the company management system.
Internal Audit on behalf of the Board of Directors should belong to the core layer of the corporate who perform oversight functions, the Board is the
highest level group of companies, so the internal audit is part of the core layer of the board of directors has supervision and management behavior
evaluation in favor of enterprises (BEASLEY, M & HERMANSON, D). 'If internal audit belongs to other departments of company, such as the general
manager, although it is closer than the board of directors, supervision can be combined with the reality, but general manager of the company does not
do decision–making but only execute it, and therefore the independence of the audit process will be affected (FELIX L. & GRAMLING, A 2001).' As
part of the board of directors, internal audit has a higher level of audit independence and the authority are guaranteed conducive to internal audit should

The Objectives Of Internal Audit
Introduction
Internal Audit is an independent, objective, assurance, and consulting activity designed to add value and improve operations. It helps accomplish
objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of governance, risk management, and control
processes.
Internal Audit is organized to examine and evaluate current and proposed processes and controls. The objectives of Internal Audit are to:
1.Promote effective and efficient controls through audits, reviews and objective consulting arrangements.
2.Pursue effective corrective action to the root cause of significant issues.
3.Assist Senior Management in the effective discharge of their duties by furnishing them with analysis, ... Show more content on Helpwriting.net ...
The Institute of Internal Auditors ' "Practice Advisories" will be adhered to as applicable. Internal Audit will also adhere to company policies and
procedures.
Organization
The Director of Internal Audit will report administratively to the Deputy Commissioner – Audit & Investigation. If situations occurs; whereas,
independency and objectivity is at risk, the Director of Internal Audit can report the situation to the Commissioner of the BMV and/or other regulatory
agency (the State Board of Accounts, Indiana Inspector General, etc.).
Independence and Objectivity
To permit maintenance of an independent and objective mental attitude necessary in rendering reports, all internal audit activities will remain free of
influence by any element in the organization. This freedom from influence includes matters of audit selection, scope, procedures, frequency, timing, or
report content. Internal Auditors will perform their duties in such a manner that they believe in their work product and that no audit quality
compromises are made. Internal Auditors may not subordinate judgment related to their audit duties to anyone.
Internal Auditors will have no direct operational responsibility or authority over any of the activities they review. Accordingly, they will not develop or
install systems or procedures, prepare records, or engage in any other activity which would normally be audited.

Authority

Audit Report And Internal Control Evaluation
Audit Report and Internal Control Evaluation
Audit Report and Internal Control Evaluation
Nathalie Salib
University of Phoenix
ACC546/PR
April 9, 2015
Prof. Rafael Marrero – Diaz
ANDERSON, OLDS & WATERSHED
Certified Public Accountants
Independent Auditor's Report
To the Board of Directors of Apollo Shoes, Inc.
We have audited the accompanying balance sheets of Apollo Shoes, Inc. as of December 31, 2007 and 2006 and the related statements of income,
shareholder's equity and cash flow for the two years in the period ended December 31, 2007. Apollo Shoes' management is responsible for the financial
statements presented, for maintaining effective internal control over financial reporting, and for its assessment of internal control. ... Show more content
on Helpwriting.net ...
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, evaluating

management's assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as
we considered necessary in the circumstances.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (GAAP). A
company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized

Questionnaire Analysis And Interpretation Of Internal...
Questionnaire Analysis & Interpretation
1)Taking into consideration the scope/objectives and responsibilities of the internal Audit functions, to what extent do you feel that Internal Audit
meets expectations?
OptionNo. of RespondentPercentage of respondent Meet Expectations3475.55% Does not meet511.11%
Expectations
Does not comment613.34% Total45100%
2) How confident are you to depend on the conclusions drawn or recommendations made by the Internal Audit function?
OptionNo. of RespondentPercentage of respondent Completely Confident715.55% Somewhat confident3271.11% Not at all confident24.44% Does not
comment48.88% Total45100%
3) To what level do you believe that the work done by the internalAudit improves the overall internal control of the organization?
OptionNo. of RespondentPercentage of respondent Improves greatly24.44% Somewhat improves2453.33% Does not improve613.33% Don't know
/ not1328.88%
Sure
Total45100%
Q.4.Do you suppose that the work done by the IA( Internal Audit) team helps in identifying and improving the overall risk of the organization?
OptionNo. of RespondentPercentage of respondent Agree1533.33% Neutral2044.44% Disagree1022.22% Total45100%
5) Do you appreciate that the IA (internal audit) team is proactive?

OptionNo. of RespondentPercentage of respondent
Agree24.44% Neutral30

Internal Audit
Introduction
This report aims to investigate the role Internal Auditors (IA) plays in certain aspects of corporate governance. The report also aims to investigate
what is considered as good corporate governance.
"Corporate governance is the system by which companies are directed and controlled. It deals largely with the relationship between the constituent parts
of a company – the directors, the board (and its sub–committees) and the shareholders" (Berr, 2008)
Corporate governance is necessary because of the problems caused by the divorce of ownership and control in modern organisations. In order to protect
the stakeholders of an organisation, regulators addressed the problem by introducing corporate governance frameworks that ... Show more content on
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The results shows that 86% percent of the firms using the advanced ERM stated better decisions were made due to their ERM system which is 28%
then all the other companies, this is the highest ranked category for both groups of firms. There is a 47% and 45% difference with manager's
responsibility between the two groups of firms. The firms' using advanced ERM also finds it easier with the regulatory compliances and also has a
better pricing tool. The firms using advanced ERM are doing better in all the categories and also by a significant margin.
Table 1
Comparison of ERM Experience Advanced ERM CompaniesAll Other Companies RankPercentRankPercent
Better informed decisions186158
Greater management consensus283536
Increased management accountability379734
Smoother government practises379339
Ability to meet strategic goals576536
Better communication to board669252
Reduced earnings volatility762437
Increased profitability859833
Use risk as competitive tool956922
Accurate risk adjusted pricing10411021
(Gates, 2006)

Table 2
Services Provided by Internal Auditors (multiple answers allowed)
DepartmentsPercentage
Internal/ Operational Audits97
IT Audits71
Financial Audits71
Advice on Risk Management66
Consulting Activities64
Support in Control Risk Self Assessment53
Management Support52
Health, Safety and Environment Audits20
Quality Audits11

Internal Audit and Review Reports
Internal audit and review reports
|by Katharine Bagshaw | |
|29 Jan 2003 | |
|Internal auditors, external auditors, and consultants who perform internal audit and review engagements provide reports to management |
|(internal audit reports). These reports are important because they provide documentary evidence of the work performed, the conclusions reached|
|and the recommendations made. The quality and presentation of such reports makes a substantial difference to the value added by ... Show more
Draft reports will often be discussed with management to confirm the findings and to establish management's likely response. |
|Responses are often incorporated into the report. Reports will often be redrafted several times, particularly in large organisations, after |
|which the report will be issued. If management have not commented at an earlier stage, a formal response may be expected later. It is normal |
|to follow up on recommendations or agreed action points in order to establish how the issues have been dealt with. |
|External auditor reports to management deal in substance with, inter alia, issues relating to the design and implementation of internal |
|controls that have come to the external auditors' attention during the course of the statutory audit. They generally deal with weaknesses in |
|systems, the potential consequences and provide recommendations to management. Whilst internal audit reports may appear to be similar, they |
|are different in substance. |
|Internal audit engagements are usually undertaken as part of a pre–planned program of work with a variety of objectives as part of an entity's|
|overall corporate governance arrangements. These

Managing An Internal Audit Department
Joan Tsai
BUAC 786
03/22/17
Extra Credit Assignment
1.A company might decide to establish an internal audit department because an effective and independent internal audit department add values and
improve effectiveness of risk management, control, and governance processes. It also helps prevent and detect the frauds.
2.Even though The Schwan Food Company is a private company, since the company's goal was to double its size in five years, establishing an internal
audit function could provide assurance and consulting services to help the company achieve its objectives and expand globally. The four factors that
may have caused The Schwan Food Company to change its internal control practices and corporate governance structure are,
... Show more content on Helpwriting.net ...
Independence is extremely important, necessary, and appropriate because without an independent IAD, IAD's objective of adding values and
improving business operations cannot be achieved. Independence is also a key component in Attribute Standard. Accountability section states the chief
audit executive's responsibility to the management and audit committee. It is necessary and appropriate because it leads to significant communication
between the CAE and top management and between the CAE and the Board; it also helps ensure that the standards and requirement of the internal
auditing function is achieved.
5.Company's new CAE can explain to the non–audit employees that IAD's objective is to add values and help improve the business processes as well
as company performance, which will affect each employee significantly. It is important to let all employees understand that the answers or thoughts
they provide to the internal auditors will not be used against them. Moreover, establishing good relationship and providing ongoing communication
with the non–audit employees can make them feel more comfortable to share their feedback and thoughts, and can reduce the "us vs. them" relationship
between company's non–audit employees and the staff of internal auditors.
6.A charter might

Internal Audit : An Essential Tool For The Payroll Function
Internal Audit is an essential tool available to the payroll function.
"The role of internal audit is to provide independent assurance that an organization 's risk management, governance and internal control processes are
operating effectively"
What is internal audit? (2015)
As a new payroll system was recently installed our internal auditors were asked to look at the robustness of the payroll controls in place.
A comprehensive test was carried out and a few areas of concern were raised.
These were mainly around separation of duties as the Payroll Officer had complete authority over the payroll function, from inputting all documents to
producing and submitting the BACS file.
Although no instances of fraud were found it was highlighted as a major area of risk to have one individual in charge of the complete payroll process.
Following on from the internal audit report further controls have been built into the payroll process.
1)The Human Resources Module was added to the Payroll software, consolidating the payroll and HR databases in a single entity. All new starters and
contractual changes are now input by Human Resources prior to the Payroll Officer calculating the pay.
2)Audit files of input of each user produced on a monthly basis.
3)The Finance Officer to check the payroll prior to the BACS file being created.
4)The Payroll Officer to prepare the payroll, the Company Accountant to authorise the payroll and send the bacs file.

At the end of every

Internal Audit Current Issue
8.0 Background
According to Wikipedia, Internal auditing is a profession and activity involved in helping organizations achieve their stated objectives. It does this by
using a systematic methodology for analyzing business processes, procedures and activities with the goal of highlighting organizational problems and
recommending solutions. Professionals called internal auditors are employed by organizations to perform the internal auditing activity. Internal auditors
are employed by companies to do both financial and operational auditing. Their role in auditing has increased dramatically in the past two decades,
primarily because of the increased size and complexity of many corporations. Because internal auditors spend all of their time ... Show more content on
Helpwriting.net ...
Relying on the internal audit staff for performance of some of the audit testing may allow the audit to be completed in less time and for a lower fee.
When direct assistance is provided, the external auditor should assess the internal auditors' competence and objectivity. The work of internal auditors
should be supervised and evaluated as appropriate under the circumstances.
8.1 Are internal auditors encroaching on the external auditors' role?
External and internal auditor had different objective this is the external auditor seeks to test the underlying transaction that form the basis of the
financial statements whereby the internal auditor seek to advice management on whether its major operations have sound system of risk management
and internal controls or in the other words, internal auditor verify corporate operational activity based on documented policies and procedures to
determine whether business objective (profitability and regulatory compliance) will achieve and the answer to the entity's' governing board or
management and external auditors provide reasonable assurance that managements' assertions over the subject matter (financial statement, compliance)
is fairly stated in all material aspects by either error or fraud and they must be independent.
Both internal and external auditor had professions adhere to codes of ethics and professional standard set by professional associations but the major
different are

The Relationship Between Internal and External Audit
THE RELATIONSHIP BETWEEN INTERNAL AND EXTERNAL AUDIT
Professor PhD Atanasiu Pop, вЂћBabeЕџ–Bolyai" University of Cluj–Napoca, e–mail: apop@econ.ubblcuj.ro PhD Student Cristina BoЕЈa–Avram,
вЂћBabeЕџ–Bolyai" University of Cluj–Napoca, e–mail: botaavram@gmail.com PhD Student Florin BoЕЈa–Avram, вЂћBabeЕџ Bolyai" University
of Cluj–Napoca, e–mail: botaavramflorin@yahoo.com ABSTRACT: Analyzing the evolution process ofinternal audit, from its beginnings and so far,
we can easily notice that internal audit function was born through detaching of some activities from external audit, the result being that there some
situations when these two functions could be easily confused. The reality is that internal audit and external audit are two distinctive ... Show more
This survey was conducted of two groups: first group was represented by internal audit directors, and the second group was formed by staff auditors
who work directly which external auditors. Both groups were asked to evaluate the overall performance of their organization's external auditor and their
perceived relationship with the external auditor. Next, we present the main results obtained through this survey: в™¦ 92% from internal audit directors
appreciated that external auditors make full use of the expertise of the internal audit staff; в™¦ 50% of internal audit directors perceived that
relationship between internal audit and external audit is an "excellent" one, while 31% appreciate this relationship as "good"; в™¦ Staff auditors
differed substantially in their perceptions of the external auditors' of the internal auditor's expertise. Only 39% of staff auditors considered that the
external auditors fully utilized their expertise; в™¦ Starting from the statement of Morris N. (Morris N., 1981) that "the external audit firm has the ear
of the board of directors and, where one is established, the audit committee. Internal auditors do not have the same relationship", Peacock E. and Pelfrey
S. wanted to identify the relationship between internal audit and audit committee. From this point of view, more that 80% of the respondent directors
of their study indicated that their companies have an audit committee, and that the internal audit

Internal Audit as an Effective Internal Control System at...
CONTENTS
1. EXECUTIVE SUMMARY 2. INTRODUCTION п‚· п‚· п‚· п‚· Literature Review Global Oil & Gas Industry Overview Indian Oil & Gas Industry
Overview Company Overview (ONGC) 2 4 6 6 20 23 24 26 28 38 39 40 41
3. INTERNAL CONTROL & INTERNAL AUDIT п‚· Internal Control п‚· Internal Audit п‚· Standards onInternal Audit 4. PROJECT PROFILE п‚·
Objectives п‚· Research Methodology 5. LEARNINGS & OBSERVATIONS п‚· Learnings п
ѓ пѓ пѓ пѓ пѓ пѓ пѓ Audit Scope & Coverage
Organisation Structure of IA Department Audit planning & process Audit approach & methodology Life cycle of an audit Performance evaluation
Quality systems
42 43 44 46 47 50 52 54 58 59 61 62
п‚· Observations п‚· Recommendations п‚· Learning outcome 6. REFERENCES 7. ANNEXURE
Page 1
EXECUTIVE SUMMARY ... Show more content on Helpwriting.net ...
After several years of seeing more money pumped into internal audit in response to the requirements of Sarbanes–Oxley, management is now looking
to trim the budget. Internal audit 's oversight went far beyond SOX, but because SOX dominated corporate priorities in recent years, audit teams were
staffed accordingly with many junior, "box–checking" resources. But now, many audit teams are finding themselves exposed, lacking the skills
required to deal with contemporary business risks. The number and variety of business risks and related controls that IA needs to assess, monitor and
report on has grown exponentially in just a few years. Risks related to the supply chain, treasury and financial instruments, fraud, systems, privacy,
emerging markets, strained economic conditions, corporate responsibility, regulation, subprime exposure and liquidity are just some of the new, niche
risks which have emerged and can require highly specialized auditing skills. At the same time, more and more companies are expecting their IA teams
to create value rather than just preserve it. With pressure mounting to deliver more while paying less and to come to terms with skills gaps, IA is
undoubtedly at a crossroads in its evolution. Having the capability to deal with today 's business risks requires a significant level of investment in
skilled resources, methods, training, career paths and technical infrastructure. Maintaining that capability requires a sustained level of

Internal Audit Of The California Department Of Public...
INTRODUCTION
In compliance with the Colorado Department of Public Health and Environment (CDPHE) Internal Audit Charter, we have completed an audit of the
internal controls on sole source contracting throughout the department. Our audit was conducted in accordance with the Standards for the Professional
Practice of Internal Auditing.
Sole Source purchases are defined as those purchases where only one vendor for the good or service being acquired is available. State Procurement
Rules R–24–103–205, allows a Sole Source declaration to be made by the Purchasing Agent on a purchase when one or more of the following
conditions are met: (i) where the compatibility of equipment, accessories, or replacement parts is the paramount consideration;
(ii) where a sole supplier 's item is needed for trial use or testing;
(iii) where public utility services are to be procured.
PURPOSE
Our overall audit objective was to ascertain whether the department has sufficient controls to ensure that sole source contracts are used in compliance
with the State Procurement Code.
Within the overall audit objective, specific goals included determining whether:
Divisions have proper procedures in place to determine if a vendor is the only vendor available to provide the goods or services.
Divisions are properly documenting their research and results for contract files.
SCOPE AND METHODOLOGY
Our study and evaluation were conducted in accordance with the International Standards for the

Tyco Internal Audit Case Study
2.3 Breach of duties by Internal Auditor
According to the Institute of Internal Auditors (IIA), (2011), the internal auditing is a team of consultants, a department and a division or other
practitioner which independent, have objective assurance and conduct a consulting activity which is designed to add value and improve the
organization operations. The internal auditor can help an organization in achieving its objectives by bringing a discipline and systematic approach in
order to improve and evaluate the effectiveness of risk management, control and governance process.
The internal auditor have a several roles in the company which is the first one the audit committee need to discharge and restrict the governance
responsibilities and the ... Show more content on Helpwriting.net ...
Integrity also can be defined as meaning of someone of high moral character who is always stick with the principles no matter the pressure ought to
do otherwise. The straightforward in dealing with any relationships with the constituencies or different people is very crucial because trust is vital in
every relationships and belief in the integrity of those with whom you are dealing. For the integrity in corporate governance is more or less required in
financial reporting because it should be present with a balanced picture of the company matters and also it should be honest. According to the Cadbury
Report, the integrity in presenting the reports in depending on the integrity of whom is preparing such

Fice Of Internal Audit
Introduction: Internal Audit, as characterized by the Institute of Internal Auditors, is a free, objective assurance and counseling action intended to
include esteem and enhance an association 's operations. It helps an association to perform its targets by bringing an orderly, restrained way to deal
with assess and enhance the viability of risk management, control, and administration forms. The motivation behind the Office of Internal Audit is to
give quality reviewing administrations to guarantee the sufficiency and viability of the retailer of inward controls and the nature of execution by
different operations.
Internal Audit, as characterized by the Institute of Internal Auditors, is a free, objective assurance and counseling action intended to include esteem and
enhance an association 's operations. It helps an association to perform its targets by bringing an orderly, restrained way to deal with assess and
enhance the viability of risk management, control, and administration forms. The motivation behind the Office of Internal Audit is to give quality
reviewing administrations to guarantee the sufficiency and viability of the retailer of inward controls and the nature of execution by different operations.
Distinguishing and tending to risk is uniquely one of an association 's most vital duties for its personnel, shareholders, suppliers furthermore, clients.
Contemplations identified with information technology are the key to any association 's push to guarantee that

Internal Audit Of An Organization
The internal audits in an organization provide numbers of services that are significantly important to company management and help organization to
succeed. These services include testing internal control, assessing operational risk, detecting the misstatement, and monitoring compliance with
government regulation and policy. Institute of Internal Auditors (IIA) gives the latest definition ofinternal audit is that: Internal audit is an independent
assurance and consulting activity management, aims to add value to organizations and institutions to improve operational efficiency. It takes a
systematic, disciplined approach to risk management, control and governance processes to improve, and helping organisation to achieve its objectives.
Unlike external auditors form outside of the organization, they provide opinions mainly associated with financial statements or risk problems on wider
issues in business environment. Internal audits as an independent department resides within the organization working in partnership with appropriate
authorities, having a larger coverage range than external audits in both financial and non–financial area. Internal auditors also transformed to become a
respected member in management decision–making and internal control.
Nowadays, more and more attention has been paid on internal auditing. Drawing the lessons from the scandal of Enron, Enron allowed an external
accounting firm to take charge of company's internal audit function, and consequently

Internal Audit Challenges And Effects Of Sarbanes Oxley Act
Internal Audit Challenges and Effects of Sarbanes–Oxley Act.
Carmen J Maurella III
AC503: Advance Auditing
Kaplan University
Introduction
The proceeds of the preliminary of SOX and also the increase essential of company governance within the many likenesses, there has been the
formation of new restrictive agencies. Existing restrictive agencies were made two administer the audit of public firms. There 'll presumably be
additional restrictive investigations by the SEC as a result. The SOX legislation has been designate two forestalled and establish several of the recent
frauds operation organizations and their investors. As an issue, the audit profession can all over again gain numbers, but This point the role and
methodology of the interior audit, perform can modify for satisfy necessities of the new legal mandates.
Business organizations are now being challenged to review, alter, and appraise their undivided business to satisfy the established needed misdate of
compliance for monetary coverage. As a result, internal auditing and also the company management setting are retained exaggerated attention and
resources necessary to adjust to the vigorously enacted legislation. Government Management and Boards of Administrator's are trying to internal audit
these days with a way of urgency to supply them with tier of trust on the general company management setting. Before their external auditors provide
any evidence of an ineffective administration setting.

Internal And External Auditing Audit Essay
According to Kieso, Weygandt, and Warfield (2013), "an auditor is an accounting professional who conducts an independent examination of a
company's accounting data" (p. 1508). In other words, auditors are independent agents that ensure the accuracy of financial statements. Although
internal and external auditors play different roles with an organization, they must follow auditing standards and procedures to detect fraud.
In 1941, The Institute of Internal Auditors (IIA) was founded to provide guidance to internal auditors (Whittington & Pany, 2014). "With over 170,000"
international members, "the IIA has paralleled the recognition of internal auditing as an essential control function in all types of" businesses
(Whittington & Pany, 2014, p. 778). In the United States, nearly every large corporation maintains a staff of internal auditors (usually employees and
not independent contractors) to identify theft, waste, and fraud (O'Donnell, 2015; Whittington & Pany, 2014). Besides examining the financial
statements, internal auditors also analyze the internal control of organizations (O'Donnell, 2015). That is, they are responsible for enhancing a
company's operations. For instance, internal auditors may evaluate the risk to a corporation's reputation if they use low–wage workers in third–world
countries (O'Donnell, 2015). In addition, they may investigate why products are getting overproduced compared to the available resources or inspect
the quality of the finished

Role Of Internal Audit On The Organization Outside The...
MEMO
To:Non–accounting specialists
From:Miriam Lombe, Junior Accountant
Cc:Finance Director
Date:15/12/2014
Subject:Role of Internal Audit
It has come to my attention that the role of internal audit is not clear to some members of the organization outside the finance department. Therefore, it
was decided that a memo is written to explain clearly the role of internal audit.
Internal auditing is an independent, objective assurance and consulting function intended to add value and improve an organization's operations. The
audit function can help an organization to achieve objectives by evaluating an organizations risk management, control and governance processes to help
improve them.
Internal auditors (IA) assess how well risks are being managed in an organization, how the organization is being governed and how well internal control
systems and processes are working. They report their findings to senior management, highlighting and advising management where improvements in
systems controls and processes are necessary.
By evaluating an organization's risk management and assisting management in improvement of internal controls, IA's help management to clearly
show stakeholders that they are managing the organization well.
Different from external auditors, IA's work within an organization and their work can vary depending on the business requirements. They do not only
look at financial risks and statements but at a range of issues that are key to a company's survival

The Impact Of Internal Audit On Employee Behavior,...
5.1 What is internal Audit?
The examination, monitoring and analysis of activities linked to a corporation 's operation, together with its employee behavior ,business structure and
information systems. An internal audit is intended to assess what a company is doing in order to spot potential threats to the organization 's strength
and profitability, and to form recommendations for justifying the risk associated with those threats in order to reduce cost.
5.2 What is its value to the organization?
Internal auditors deals with problems that are fundamentally important to the continuous existence and prosperity of any organization. Contrasting
external auditors, they look beyond financial risks and statements and also considers wider issues such as the organization's growth, reputation, its
impact on the environment and also the way it manages its employees.
On the whole, internal auditors helps organizations to succeed. It's done through a combination of assurance and consulting . The assurance part of the
work involve informing the managers and governors how well the systems and processes intended to maintain the organization on track are working.
Then, consulting is offered to help to enhance those processes and systems where ever necessary.
5.3 Scope and Objectives:
The purpose of internal auditing is to support all members of the organization within the effective discharge of responsibilities by furnishing them with
appraisals, recommendations ,analysis,

Case Study: Internal Controls And Audit Procedures
Shannon Stein Grade 12/2 Accounting presentation task Task 1: Spur Internal Controls and Audit Procedures of Spur The following report is based off
the Spur Restaurant in Ruimsig. This report is inclusive of the restaurants internal controls, its auditing systems, and its day–to–day operations.
1.Internal Controls A 'Control' may be defined as: "Any action taken by the management of a business to enhance the likelihood that the established
objectives and goals are achieved." The internal controls that are put in place are the policies and regulations that have been implemented, in order for
Spur to work in unison, towards its specific goals. By implementing these controls, Spur is able to ensure that: Income and other... Show more content
on Helpwriting.net ...
The independent auditor cannot be an employee of the company, as this will bring his/her opinion into question. The independent is appointed by
the AGM by the shareholders with in Spur and not the directors or managers. The opinion of the independent auditor must be prepared is such as
way as that the report is unbiased and is a true reflection of the companies activates. The report is not complicated and hard to understand. That is
has been prepared according to GAAP and that it is comprised according to the Companies Act. Ruimsig Spur receives two independent auditor
reports from the Spur head office twice a year. Both of these reports are operational reports. The feedback from these reports are based on the
operational status of that specific Spur in terms of their books, their working conditions, the cleanliness of the store and the food product being sold.
5.Role of Internal auditors The internal auditor is put in place in order to ensure that the internal controls are tested and assessed effectively. They are
also out in place in order to monitor any possible fraudulent activities within an

The Independence Of Internal Audit
Independence is a very important element in auditing. Because of the Enron Corporation and other scandals, independence of auditors becomes a vital
issue in the audit industry. It is difficult to achieve 'independent' for auditors as there is the fact that the client pays the audit fee. In this essay, we will
focus on the independence of internal audit.
Internal audit plays an important role in a company. According to the IIA (1999), "Internalauditing 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, ... Show more content on Helpwriting.net ...
"The auditing profession promotes the principle of independence to define, defend, and extend the profession" (Sikka and Willmott, 1995).
Independence is the most priceless asset in the auditing profession and the basic principle that supports the reputation of the auditing profession in the
public eye. Auditors protect the public's confidence in such services by conducting an auditing work independently. In fact, the capability of the
profession depends on how it can ensure the principle of independence.
In the ideal circumstances, the person performing an audit should have no relationship to the party being audited. The lack of a relationship prevents
bias entering into the audit findings. In corporate settings, a company hires an internal auditor or establishes a contract to purchase internal or external
audit services, an agency relationship is formed. Governmental rules, professional ethics policies and industry standards are put into place to further
promote auditor objectivity in these situations.
Internal auditors are directly hired or contract employees of the company being audited. Their overall objectivity might be doubtful as they need to
satisfy management levels to get paid. Rules to minimize bias focus on eliminating conflicts of interest. The audit result will be questionable when
there is conflict of interest between auditors and their employers. Effective internal auditors cannot audit their own work or processes, functions

Internal Audit Report On The Audit
1. The internal auditors report directly to the CEO and the CEO is the one who decides on the audit plan.
Control Weakness: The CEO sets up all the meetings that take place between the internal auditors and the audit committee and the director of the
internal audit department doesn't have outside access to the audit committee. Although the internal audit department is in charge of giving a presentation
to the audit committee, the CEO must filter everything that is reported (including all documentation). Also, whenever there tends to be questions in
regards to the receiving, processing or manufacturing functions, the CEO just refers the auditors to the Human Resources department, instead of going
into detail on the issues that are raised. ... Show more content on Helpwriting.net ...
This organizational structure is useless and does not allow for effective internal control over financial reporting. The CEO can easily steer the internal
auditors away from key issues. Objectivity of information is compromised because the internal auditors can simply be under pressure to misstate
financial statement account balances.
Recommendation: The internal auditors need to report directly to the Audit Committee, and not the CEO. By doing so, the internal auditors will be
able to work independently outside of management control. This will allow for the internal auditors to exercise due care about issues raised that can be
conflicting with the CEO's agenda. Internal auditors must have direct access to the audit committee so that they are able to report on significant
deficiencies that arise and to be able to address these deficiencies with management. Furthermore, the overall control environment can be improved and
risk assessment can decrease if there is that open communication between the auditors and management. 2.The machine operator's pay is contingent on
the number of spheres that go through helixination.
Fraud Risk: This is a fraud risk because the machine operator's economic incentives can have a drastic influence on the production process. The
operator can push green spheres through the helixination process and still can get paid

The Relationship Between Internal Control Deficiencies And...
the Relationship Between Internal Control Deficiencies Severities and Audit Fees
1. Introduction
With the development of accounting and the occurrences of accounting scandals, such as Waste management scandal, Enron scandal, and Worldcom
scandal, internal control of a company has been paid unprecedented attention. For companies, effective internal control activities can help management
to prevent and detect errors or frauds from accounting system so that they can have a better operating circumstance. In 2002, the United State Congress
passed Sarbanes–Oxley Section (SOX) 404, which requires management to assess the effectiveness of a company 's internal controls over financial
reporting (ICOFR) and requires external auditors to review management 's assessment, and then to provide their own conclusion related to the
effectiveness of the ICOFR (Choi, Kim, Kwon, & Zang, 2010). The Sarbanes–Oxley Section 404 indicates the rising concern about accounting scandals
in businesses due to ineffective internal control systems.
Internal controls of companies are to ensure the reliability of financial reporting, which are developed by companies ' managements, thus, if a
company has deficiencies in their internal control, it will have a high risk of material misstatement over their financial reporting. Generally, the
likelihood in big firms that errors or frauds are appeared in accounting system is higher than the likelihood in small firms (Hoitas, Hoitash, & Bedard,
2008). Audit risk

Conducting Internal Audits To Improve Operations

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