An Internal Control Office Team Member

This course is the first in a two-part series that deals with auditing a company 's financial reports, internal controls, and

As required by standards of the Public Company Oversight Board (United States) during our audit process, we will request from management written confirmation concerning representations made to use in connection with the audit. Timing and Fees The timing of our services is scheduled for performance and completion as follows: Begin interim fieldwork Completion of fieldwork Delivery of management letter December 1, 2015 March 15, 2016 March 22, 2016 4-1 CW 11/23/2015 MPh 2/19/2016 Delivery of audit report Delivery of tax returns March 29, 2016 March 29, 2016

The effective use of IA departments causes less dependency and or reliance on external auditing. Ineffective use of this department can create reliability of the external audit firm, high costs for use of their services. Ideally, effective auditing should be done twice a year, consist of a short period of attendance; whereas, if it is possible for charities to have an internal auditing department, auditing will be carried out as often as every three months and the likelihood of any mismanagement of funds will be greatly reduced and this lead to gradual abolition. For effective IFC practices, various functions should be implemented to address each area so that effective operations are in place and at the same time reduce

Elder, A. A., Beasley, M., & Elder, R. J. (2014). Auditing and assurance services (15th ed.). Upper Saddle River, NJ: Pearson.

Encyclopedia, B. F. (n.d.). Assurance. Retrieved 06 26, 2011, from Encyclopedia of Business Finance: http://www.enotes.com/business-finance-encyclopedia/assurance-services

As Senior Analyst with Process and Program Management (PPM-IMF), my primary duties involve coordination of any Government Accountability Office (GAO) or Treasury Inspector General for Tax Administration (TIGTA) audits of Accounts Management (AM). I serve as the liaison for any audits owned by AM, as well as other audits that require AM support. Through mid-year of 2016, AM has been heavily involved in audits related to the processing of correspondence and the yearly filing season audits for GAO and TIGTA, in addition to multiple audits related to identity theft.

Auditors have the responsibilities as well as management to report internal controls. The auditors must examine closely management’s claim of effectiveness and also physically test the controls. After the examination, the auditors should express their opinion and any recommendations to fix any internal control weaknesses.

During the performance of this integrated audit, require numerous judgments about the internal control and overall financial reporting and how well it addresses risks of material misstatements within the financial statements (AICPA, 2014). After re-evaluating the previous errors found from the previous audit, the audit team found the corrective actions to be appropriate and justified in elimination of human error by implementing additional checks and balances within the manual process. No additional misstatements have been found and all internal controls off the financial reporting seem appropriate and just.

There is appears to be lack of independence and objectivity by QAD auditor. QAD auditor appears create a relationship with the commands which may affect the audit. Due to creating a person

Abernethy and Chapman’s engagement team comprises of a partner-in-charge, a manager, a senior auditor, and one or more staff auditors. The partner-in-charge leads the engagement team and is responsible for all final decisions made while conducting the audit. The manager, senior auditor, and staff auditors are to perform the actual audit examination. The engagement team’s responsibility is to complete the audit with competency and objectivity.

The final responsibility for the integrity of an SEC registrant’s internal controls lies on the management team. U.S. companies need to refer to a comprehensive framework of internal control when assessing the quality of financial reporting to determine that financial statements are being presented under General Accepted Accounting Principles, GAAP. The widely used framework is referred as COSO, Committee of Sponsoring Organizations of the Treadway Commission, sponsored by the following organizations American Accounting Association, the American Institute of CPA’s, Financial Executives International, the Institute of Internal Auditors, and the Institute of Management Accountants. COSO’s defines internal control as:

For example, FFC relies on bar code scanners and credit/debit card readers. To maintain its competitive edge in its market area, FFC recently implemented a fingerprint bio-coding payment system in all of its stores. This new systems implementation required that FFC change several of its general-ledger application programs; in particular, those related to its cash receipts processing. FFC does not use any outside service organizations to provide its IT services. Sophie Ewing, the audit senior who heads up your team, decided that because of FFC’s complex and sophisticated IT processing, an IT General Control (ITGC) review is mandatory to meet SAS 109’s risk assessment procedures and SOX Section 404 Management Assessment of Internal Controls requirements. You know that an ITGC review is very important because ITGCs provide the foundation for reliance on any financial information FCC’s systems produce. Your evaluation will affect the financial auditor in assessing the risk of material misstatement in FFC’s financials, and consequently, the audit plan. At your first team meeting, Sophie announced that your firm’s network security specialists would review the technical issues related to FFC’s internal controls. They will evaluate FFC’s operating systems, its telecommunications software, and its network configuration and firewalls. In preparation for the meeting, Sophie encouraged you to review the key provisions included in SAS 109, SOX Section 404,

3 pillars of effective internal audit services- independence and objectivitiy, proficiency, and due professional care.

Section 404 requires public companies to establish internal controls and report annually on their effectiveness over financial reporting. The CFO and CEO are held personally responsible for the internal controls via the requirement to sign a statement certifying the adequacy of the internal control system (Moffett and Grant, 2011, p. 3). Additionally, the company’s independent auditor must issue an attestation regarding management’s assessment of the internal structure as part of the company’s annual report (Bloch, 2003, p. 68).

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.