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 Auditor
Before discussing the benefits on internal auditor a definition of internal audit would be discuss. “An employee of a company charged with providing independent and objective evaluations of the company’s financial and operational business activities, including its corporate governance”. (Investopedia, 2013) In addition to financial and operational business, the auditor has to do evaluation on the operation efficacy. The evaluations are reported to the upper level management. The reports could be in the form of recommendation. The recommendation would explain the methods to correct any areas that may not observe the laws and regulations.
The Essay on Evaluating Internal Controls
An organization’s internal controls are comprised of five components, which include: the control environment, risk assessment, control activities, monitoring, and information and communication. The five components of internal control are considered to be criteria for evaluating an organization’s financial reporting controls and the bases for auditors’ assessment of control risk as it relates to an ...
Benefits of an internal auditor are many. Also the benefits can be seen in the audit itself. According to the Institute of Internal Auditors, under Attribute Standard 2110 Governance the audit would: “1. Promoting appropriate ethics and values within the organization; 2. Ensuring effective organizational performance management and accountability; 3. Communicating risk and control information to appropriate areas of the organization; and 4. Coordinating the activities of and communicating information among the board, external and internal auditors and management”. (theiia.org, 2013) In addition the IIA states under the performance standard the auditor must do the following:
1. “Managing and Internal Audit Activities
2. Planning
3. Communication and Approval
4. Resource Management
5. Policies and Procedures
6. Coordination
7. Reporting to Senior Management and the board”.( theiia.org, 2013) The above can be considering benefits because the auditor will ensure that the controls within the system would be running smoothly. The most important benefit of internal auditor would ensure that the audit would how the controls do have the effectiveness towards the risks. These risks would be found in the governance. The controls would
1. Protect the company assets,
2. The effectiveness of operations,
3. Upholding (compliance) of the laws, regulations, policies.
Background benefits the client
The background benefits can help the client. The auditor would review the out of control system. Once the review is done the auditor could write how to correct the weak area. The review would provide the methods. The auditor has to make a recommendation to the upper level of management. In the recommendation the correct methods need to get the out of the control system into a control system. The benefits for the client is a under control of the system. Once the control system is working properly the company would lower some the risk. Risk like not obeying the regulations established by the government. If the company does not correct the problem then the company would have heavy legal problems.
The Term Paper on Control Panel System House Alarm
Introduction There have been a number of burglaries in the area in which the Peterson family are living; thus they have become increasingly interested in Control Technology in their home. They have contacted me, and my task is to prepare a report, which advises them upon various alarm systems, also considering fire detection systems. I am going to provide the Petersons with two reports, one ...
Referring a person for the job
The auditor job position needs to be filled. The person who will fill this would need to have a Bachelor in Accounting or Masters in Accounting. At least some experience as a auditor. There will, from time to time, a need to do overtime. Ms. Jane Doe would be an excellent candidate for the auditor position. Ms. Doe has five years experience in auditing. Also, she has a Bachelor’s and Master’s in Accounting. She has been an instructor college level accounting course. Ms. Doe recently receive her CPA license and is available to start right of way.
Conclusion
Internal Auditor has an important role in a company. The internal auditor would keep the control system up to date. Also make sure the company’s control system does not go out of control. The are several regulations and laws that must be observe. The auditor has communicated, control, evaluate, and protect the company’s assets. The internal audit would show the weak areas or areas that are not in the accordance of the law. The internal auditor would make the necessary recommendation to the upper level management what changes have to be done to meet the laws and regulations.
References
Full Standards. (2013).
Retrieved from http://www.theiia.org/guidance/standards-and-guidance/ippf/standards/full-standards/?search=risk www.investopedia.com. (2013).
Definition of Internal Auditor. Retrieved from http://www.investopedia.com/terms/i/internalauditor.asp
