Today’s business environment is becoming increasingly complex. Companies are new constantly implementing new technologies processes to help with output and efficiencies. With every technology and process the correct controls must be put in place. In addition to these self implemented tools, companies are under increased government regulation to validate their internal processes and controls. All of this activity needs a point person. That point person is the internal auditor. The purpose of this brief is to define the role of the internal auditor.
Why the role is necessary and to recommend a qualified candidate for the role. To understand how the addition of an internal auditor will help a business, the exact role and function of the internal auditor must be known. An internal auditor is an employee of a company that provides the organization with an independent assessment of the organization’s risk management and internal control. Additionally, the internal auditor ensures a company is in compliance with government regulations.
The Essay on Recommendation Brief for an Internal Auditor
The client has a problem with an out of control system. So, the client is asking for a recommendation to hire an internal auditor. In this recommendation brief the background benefits will be discuss. In the same brief the justifying the benefits of using the internal auditor will be discuss. In conclusion a recommendation on a person whose has the background for the auditor. Benefits of Internal ...
This has been a point of emphasis in recent years with the passage of large-scale government regulations such as the Sarbanes-Oxley Act of 2002. Ultimately the findings and recommendations of the internal auditor seek to improve a company’s efficiencies and operations. The need for an internal audit function cannot be understated. While the need to properly assess a company’s risk and controls has always been important, in today’s world it is mandatory. The accounting scandals, such as Enron and WorldCom and the early 2000’s led to the passage of the Sabanes-Oxley Act (SOX).
SOX aimed to give the investing public confidence in the financial statements of company’s by offering guidelines and spelling out regulations that publicly traded companies must adhere to. There are two sections of SOX that are of particular interest regarding a company’s internal controls. They are sections 302 and 404. Section 302 of SOX requires management to certify, on a quarterly basis, it’s controls surrounding financial reporting and also it’s disclosure controls and procedures.
Section 404 of SOX requires management to develop and monitor procedures and controls for making their required certification about the adequacy of internal controls over financial reporting, as well as the required certification by an external auditor. The importance of complying with SOX cannot be understated as non-compliance carries sever consequences. Besides lawsuits and negative publicity, a corporate officer who does not comply or submits an inaccurate certification is subject to a fine up to one million dollars and ten years in prison, even if done mistakenly.
If a wrong certification was submitted purposely, the fine can be up to $5 million and twenty years in prison. With penalties like this is place it is in management’s best interest to be absolutely sure that their internal controls and procedures are tight. To ensure your company is on top of its internal processes I would recommend the hiring of Patrick Hunter to head up your internal auditing department. Mr. Hunter has spent the past ten years in the financial service industry. His time his been spent in both day to day operations and regulatory filing operations.
The Essay on 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 ...
His breadth of experience gives him a unique understanding of not only what needs to be done to implement correct internal controls and what needs to be done to comply with regulations, but also what individuals may do to circumvent controls. With the hiring of an internal auditor the business will be able to better control operations. Additionally, the internal auditors will make recommendations to add value to the company’soperations based on their testing of controls and procedures.
The internal audit team will ensure the company is in compliance with all government regulations. The scope of the internal audit function is definite value-add to any company. Therefore it is my recommendation it be done as soon as possible. References McCarthy, M. , Flynn, B. , & Rob, . (2004).
Risk from the CEO and Board Perspective . : The McGraw-Hill Companies. The Institue of Internal Auditors. (2013).
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