Roles of Audit Committee

Founded in 1996, CVS Health Corporation is a firm based in America, offering pharmacy and health care services at retail level. The entity provides innovative capabilities for solving challenges and costs associated with health care. The firm offers services through three segments namely, retail, pharmacy and corporate segments. As of

Internal Control and Auditor One of the recommendations for Tyco International Company is having an internal auditor. According to the Institute Auditor (IIA), internal auditing is an autonomous, objective assertion and consulting activity intended to add value and improve an organization’s operations. Thus, it will help a company achieve its objective by getting an organised, controlled approach to assess and increase the efficiency of risk management, control and governance processes. Under recommendation 6.2 MCCG, the board should create an internal audit function that will directly report to the Audit Committee. Hence, the board should find a head of internal audit that will give report to the Audit Committee. Also, the head of internal

To conduct the audit, the firm must acquire sufficient understanding of the internal control processes to help determine the nature and timing of the audit. However, the audit is not designed to identify deficiencies in internal control or provide assurance. The firm will make the audit committee aware of any significant deficiencies that come to Anderson, Olds, and Watershed’s attention during the audit.

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.

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.

2.3 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

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.

Audit Committees Post Sarbanes - Oxley The importance of audit committees increased through the years and especially from pre-Sarbanes – Oxley to post-Sarbanes – Oxley. Although, what are the responsibilities of the audit committee members? How does a Chief Audit Executive (CAE) more effectively serve their audit committee members? How do auditors communicate with audit committees? What are the requirements for audit committees? Most of these questions are inherited from what the audit committee’s best practices are.

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.

Internal Auditing International Professional Practices Framework (IPPF) 2011 and Institute of Internal auditors (IIA), Defines, the Internal auditing as an independent, objective assurance and consulting activity intended to add value and improve an organization’s operations. It helps an organization to achieve its objectives by bringing a methodical, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. The overall objective of internal auditing is to assist all members of management in the effective discharge of their functioning, by endorsing them with objective analysis, appraisals, recommendations and pertinent comments concerning the activities reviewed. The Institute of Internal auditors under the glossary of the Standards for the Professional Practice of Internal Auditing,(IIA 2004c:25) outlines the concept of ‘value added’ in the integrity and objectivity of internal auditing and financial report scrutiny states that:(Institute of Internal Auditors

Audit Committee The Audit Committee assists the Board in regard to financial reporting, audit and risk management, including:

Disney’s audit committee charter pertains to the committee's authority, purpose, structure, and its responsibilities to the company itself. The audit committee assists the board of directors in overseeing the reliability of the financial statements; compliance with company regulations and the law; external auditors’ qualifications and their ability to be independent; as well as their performance within the company, including that of the internal

The audit committee is responsible for the following. It is responsible for reviewing the financial statements, for reviewing the company's compliance and control systems, for monitoring the effectiveness of the internal audit function, assessing the independence and objectivity of the external auditors, and ensuring the employees have the opportunity to raise concerns about matters of financial reporting. The audit committee supports the Board. Ultimately, because the audit committee is comprised of members of the Board, they are elected by the shareholders. Should the shareholders decide, they can replace these members at the annual meetings.

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

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