Auditing Research Paper - 1

1279 Words Feb 18th, 2012 6 Pages
Auditing Research Paper
January 9, 2012

Auditing in general is an organized process of accurately finding and assessing statements regarding financial records to determine the degree of accuracy between those statements and established criteria and communicate the results to interested users and or the public.
Even though auditing and accounting have similarities, they can be distinguished. An accountant handles the daily financial operations for a business, while an auditor reviews the information provided by the accountants, usually on a quarterly or yearly basis. Another difference is an audit is usually performed by one or two people from an outside agency, whereas accounting for a company is usually complied of several different
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1). In July 2002, Congress passed the Sarbanes-Oxley Act. The act applies to publicly held companies and their audit firms. It requires the external auditor to report on effectiveness of a company’s internal control over financial reporting. CPAs offer other assurance services that are not defined as attestation services, they differ because no written report is required, “and the assurance does not have to be about the reliability of another party’s assertion about the compliance with specified criteria” (Arens et al., 2010 pg. 11). Other Assurance Services | Service Activities | Controls over and risk related to investments, including policies related to derivatives | Assess the process in a company’s investment practices to identify risks and to determine the effectiveness of those processes | Mystery shopping | Perform anonymous shopping to assess sales personnel dealings with customers and procedures | Assess risks of accumulation, distribution, and storage of digital information | Assess security risks and related controls over electronic data, including the adequacy of backup and off-site storage | Fraud and illegal acts risk assessment | Develop fraud risk profiles, and assess the adequacy of company systems and policies in preventing and detecting fraud and illegal acts | Compliance with trading policies and procedures | Examine transactions between trading partners to ensure that transactions comply with agreements;

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