Share
Explore BrainMass

Internal Auditing and Assurance Services

Internal auditing is the process done within a company or organization that analyzes the company or organization's operations.  The purpose of an internal audit is to determine how the company can better use its resources and become more profitable or to identify and mitigate potential risk.  Another goal of internal auditing is to minimize costs from within the company so that the revenue-seeking activities done are more profitable.  Internal auditing is highly credible and accurate (when done correctly) for determining 'weak' points of an organization, such as high costs, large amounts of risk or poorly allocated resources.  Internal auditors are not personally responsible for executing any plans that may be created as a result of an internal audit.  The auditor simply presents their findings to the Board of Directors or executive management and then either of these groups will take on the responsibility.  The execution of an internal audit requires a very elaborate, methodical plan in order for it to be executed properly and effectively.

Internal assurance services are done for the purpose of providing management more information regarding the operations of their company.  With this additional information, is it assumed that management will be able to make more informed decisions regarding the operations within the company.  If an external company is hired to do the internal audit, they will usually produce a report including all evidence uncovered through their research within the company.  Internal assurance services are different from external insurance services in the sense that external services are similar to management consulting.  

High-Risk Audit Areas

Please help me Write a paper of approximately 750-900 words that answers the following: In preparation for the meeting with the potential client's CFO, you plan to identify several high-risk audit areas in the company's financial statements that you will discuss. Using the company's latest annual report, pick at least three

Circumstances do you feel warrant criminal prosecution of CPAs

Bernie Ebbers is an excellent example of a criminal that is serving a jail sentence due to accounting fraud. Many CEOs and CFOs simply do not consider that they will ever get caught. Perhaps, the conviction of white-collar criminals brings an awareness needed to deter future corporate fraud. Do you feel tax preparers should f

Concrete Steps to Restore a Company's Reputation

Imagine that you're the CEO of a large firm like the one described in the attached file. What concrete steps would you take to restore your company's reputation if it has been sullied? COMPANY: MARSH & MCLENNAN (MARSH, INC., PUTNAM FUNDS, AND MERCER CONSULTING) INDUSTRY: INSURANCE (MARSH, INC.), MUTUAL FUNDS (PUTNAM FUNDS)

Mortgage Crisis and Corporate Responsibility

What is the relationship between the mortgage crisis of 2008 and the corporate responsibility and ethics? What factors cause the crisis? Do you think social responsibility is important? Why or why not?

CPA's and Prescribed Standards

In 2013, the Journal of Accountancy had a short article regarding independence of fact vs. appearance with respect to CPAs. Certainly, the demise of WorldCom and Enron, among others, heightened the public's awareness of CPAs potentially crossing the line of independence in both fact an appearance. The article specifically ment

CPA Independence and Audit Committees

Do you feel that it is naive to believe that all CPAs can maintain independence in both appearance and fact? Over time, CPAs will develop relationships with their clients and certainly the CPAs are dependent on the fees derived from the clients. In 2002, Sarbanes-Oxley made the audit committee directly responsible for the hirin

Rules Regarding CPA Independence in Public vs. Private Companies

One think I notice is that section 100 of the Rules of the Code of Conduct discusses independence, objectivity, and integrity. The independence rule does not apply to all services performed by the CPA. The independence rule applies to auditing as well as other attestation services such as examinations, reviews, and agreed-upon

AICPA Rules of Professional Conduct

Analyze the AICPA Rules of Professional Conduct and the IMA Code of Professional Conduct for Managerial Accountants. Write a paper of approximately 800 words that accomplishes the following: •Describes the purpose and major elements of both codes and compares the two codes - AICPA Code of Professional Conduct and the IMA C

Accounting Firm Characteristics

The dynamics of the accounting profession have definitely evolved. In addition to the numerous changes relating to Sarbanes Oxley, the professional dynamic has also continued to change. Cathy Engelbert recently became the first female CEO of a big four accounting firm when recently elected as Deloitte's CEO. It is exciting to s

Accounting Profession at the Highest Standards

Do you feel that the accounting profession is considered to have the highest standards for ethical and moral conduct? Certainly, the profession strives for high ethical conduct, but certainly the ethics of the profession were called into question with the collapse of WorldCom, Enron, Adelphia, etc. Since these collapses, the pr

AICPA and PCAOB Rules for Commissions and Referral Fees

establishment of a code of conduct demonstrates acceptance of responsibility to the interests of those served by the profession. The AICPA Code of Professional Conduct derives its authority from the Bylaws of the AICPA. Statements on Accounting and Review Services are enforceable under the AICPA Code of Professional Conduct.

CPA's legal liability exceed a physician's legal liability

Professionals have a responsibility to the public. If a physician or attorney commits a serious error, the number of injured parties generally is limited to one individual patient or client. When a CPA's report is in error, literally millions of investors may sustain losses. Under the Securities Acts regarding CPAs' liability

Accounting Ethics Importance

In 2001-2002, we saw the collapse of Enron. As the text mentions, problems existed before Enron and continue to exist after Enron due to the inherent conflicts of interest that arise in the accounting process. Why is it important for accountants to remain ethical and "protect the public"? What are the ethics of disclosure?

Professional skepticism in audits article

Briefs are one (1) page write-ups of selected articles requiring you to (1) summarize the article with the central message and the author's theme; (2) discuss 2 reasons why this is an important or unimportant topic for the audit profession; and (3) indicate your agreement or disagreement with 3 of the author's conclusions or opi

Auditor Report

The board of directors of Evans Industries Inc. engaged Maxfield & Murphy, CPAs, to audit the financial statements for the year ended December 31, 2014. Required: Identify the deficiencies in the following draft of the report. Do not rewrite the report. Independent Auditor's Report To the President of Evans Industries Inc.:

GM Case and Going Concern VS Self-Fulfilling Prophecy

Founded in 1908, General Motors Corp. ( GM) is truly an iconic American corporation. From 1931 through 2008, GM was the world's largest automobile manufacturer, and in 1955, it became the first company in any industry to report more than $ 1 billion in revenues. GM's market share peaked at 51 percent in 1962. GM's domination in

Pat Holden Auditing Financial Statements of Connell Company

Pat Holden is auditing the financial statements of Connell Company. The following is a summary of the uncorrected misstatements that Holden has identified during the last three years. Year Effect on N/I Effect on asset Effect on liability Effect on equity 2011 --- (82,500) --- (100,000) ---

Financial statements of Welch Manufacturing Corporation

In connection with your examination of the financial statements of Welch Manufacturing Corporation for the year ended December 31, your post balance- sheet substantive procedures disclosed the following items: Required: Assume that the preceding items came to your attention prior to completion of your audit work on Febru

Material Misstatements Audit

During the conduct of an audit, auditors may identify misstatements as a result of the completion of their substantive procedures. An important activity performed in the completion stages of the audit is considering the materiality of misstatements identified during the audit. Required: a. What is an uncorrected misstatem

Auditing the Financial Statements of Astro Company

Aaron Raymond, CPA, is auditing the financial statements of Astro Company, a client for the past five years. During past audits of Astro, Raymond identified some immaterial misstatements (most of which relate to isolated matters and do not have common characteristics). A summary of these misstatements follows (to illustrate, in

The importance of sampling in audit field work

Create a response for the following below 100 words or less. (Fieldwork is very important when you consider that this is where you will conduct all of your actual testing of account balances, transactions, and managements assertions. Remember that professional skepticism is very important when you are working on an audit as a

Enron Corporation New Century Financial Corporation

Please discuss all cases to date that you've done for me. This discussion should center on similarities and differences that exist among the cases, what has been done to strengthen the audit function since the cases occurred, and what has not been (or cannot be) done to reduce the likelihood that the situations that occurred

India and Tata Finance Case

Regarding the India & Tata Finance case, the first issue is that the firm did not support the partner who wrote the report. Do you think this is an isolated incident or one that could happen with ongoing frequency? Also, what about the balance of power between the firm and the client? Do you think the public accounting firm may

Gazprom Case

Please discuss below minimum 300 words: Suppose that a U.S.-based accounting firm has a major audit client in a foreign country that routinely engages in business practices that are considered legal in that country but that would qualify as both illegal and unethical in the United States. What specific moral or ethical obliga

Discuss a recent fraud that you have read about

Discuss a recent (or not-so recent) fraud that you have read about, either in the textbook or in the news. Were there red flags present that should have alerted someone that the fraud was occurring? What could have been done differently in order to prevent the fraud or detect it sooner?