Fice Of Internal Audit

Scoping and Evaluation Judgments in the Audit of Internal Control over Financial Reporting 12.1 EyeMax Corporation . . Evaluation of Audit Differences

Furthermore, when the internal control is fixed, the outside auditor can rely on the clients system and less audit testing can be conducted. When everything is improved, the management letter is given to the organization’s top management and not disclosed to the public, (Finkler, S. A., Ward, D. M., & Calabrese, T. D., 2013). Next, is the auditor’s report that entails the opinion letter usually written in three paragraphs and given to the board of trustees. Then, the opinion paragraph is added on to state the organizations financial statements are in accordance of the financial position and followed through with (GAAP). The clean opinion addresses the opinion of the auditor and the overall exercising of professionalism. Also, the complete opinion of the financial statements is to give a representation of the organization. All other opinions may be included and can be addressed by adverse opinions if (GAAP) was not in accordance. A qualified opinion can be added if a specific area wasn’t included in the financial statement when needed. Finally, the management reports are conducted by the management team and not the auditors. The management report is the annual report the topics included in the report are the internal control system and the responsibility of the audit committee.

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.

The case of financial vice president managing a team of internal auditors affects the independence of auditors and reliability of the internal audits. This implies a weak internal control as the VP is in a position to influence the findings of internal auditors. This case relation to internal control oversight by the board of directors.

Section 404. Management assessment of internal control: This section needs every annual report of a in public listed company to contain internal control report stating management’s responsibility to establish and maintain an adequate system of internal control financial reporting similarly as an assessment of the effectiveness of internal control structure and procedures. Auditors audit the financial statements of the company must issue a consulting report regarding the effectiveness of the company internal

There are many different types of audits including financial statements audit, the operational audit and the compliance audit. Either an internal auditor or an external auditor from another firm can conduct these various audits. “The American Accounting Association defines auditing as a systematic process of objectively obtaining and evaluating the accounts of financial records of a governmental, business, or other entity based on established criteria” (www.referenceforbusiness.com, 2009). Essentially the review is done to enable an accountant to assess the representations of management and to consider whether the financial statements conform to the

The internal audit’s work is necessary to the entity. The internal audit can accumulate evidences from different documents, statements and reports. Their reprehensibility is to provided reasonable assurance in entity’s daily operation. In this case, there are some materials has been founded in MCS. From my opinion, the internal audit could pay more attention on the manager’s internal control evaluation. The additional work can be started by evaluating all financial records to ensure the accuracy of the financial statements, and reviewing administrative control with the university policy and regulations to

Auditing is a systematic procedure of going into accounts of an organziaiton, by an independent person, for true and fair elavuation of the accounts of the organization. auditors are the individuals who evaluate the extent up to which financial postion of an organization is depicted through the financial statement of it. There are two types of auditors; internal auditor and external auditors. Internal auditors are the employees of organziaion, appointed to maintain internal check and internal control over the finances of it. However, external auditros are independent individuals hired by the company, to evaluate fairness of its accounts.

Internal audit plays an important role in a company. According to the IIA (1999), “Internal auditing 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,

Internal auditing is an independent objective assurance and consulting acitivity designed to add value and improve an organizations operations.

Internal auditors cannot effectively provide an analysis on the company’s internal dealings as they are part of the company. External auditors, however, can observe these processes from the outside and then determine where the funds of the company and whether the dealings adhere to the regulations. Using external auditors in a company prevents conflict of interest from happening. Conflict of interest is a situation where an individual or organization has multiple interests and of those multiple interests, one could possible corrupt the motivation for an act on the other when the auditor has any kind of beneficial interest in their client’s performance. In other circumstances, there is also the threat of familiarity where auditors become

government Management and Boards of Administrator’s are trying toward internal audit these days with a way of urgency to supply them with tier of confidence on the general company management setting before their external auditors provide any indication of an ineffective management setting. Despite the exaggerated exposure and buy-in from government management, internal audit departments are faced with several challenges in providing shareholders, boards, and executives with assurance on the effectiveness of their organizations management systems.

Unlike a statutory audit, an internal audit is purely optional. The directors or owners of a business may wish to undertake an internal audit to ensure accounting systems and controls are sufficiently designed and functioning appropriately. It also helps them to ensure that assets are duly protected and utilized for the benefit of investors and owners. Such audits maximise stakeholder investment through the implementation of effective internal controls.

| Internal audit may not be privy to allsources of information throughout thecompany if seen as “outside” themanagement structure.The chairman of the audit committee maynot have allocated sufficient time, or haveadequate resources/capacity to deal withthe oversight of the internal auditfunction.It would be necessary to set up aspecific charter outlining the roles andresponsibilities of the board in relationto internal audit, as separate frommanagement. For example, who wouldlook after the HR administration, includingpersonnel evaluations, compensation andcareer planning for the head of internalaudit?The audit committee would be assumingmore responsibility and therefore,perhaps, more liability in relation to theadequacy of the internal control and risksystems of the organisation.Potentially restricts the ability of the CEOto use internal audit as a tool to reinforcecontrol principles, or in special projects.

As an independent objective assurance and consulting activity, internal auditing helps an organization accomplish its objectives by bringing a systematic and displined approach to valuate and improve the effectiveness of risk management so that it could control and governance processes. Its aim is to add value and improve an organization’s operation condition. From