Internal Controls
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- Date Submitted: 08/05/2013 07:06 PM
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Internal Auditor
Ron Mathieu
ACC/544
July 29, 2013
Joseph Poletti
Internal Auditor
A recommendation has been made for a publicly traded company to hire an internal auditor to clean up an out of control system. An out of control system could mean many things but none of them are desirable for any company especially one that is publicly owned. The company needs to maintain accurate financial records and produce correct financials statements. This means adhering to General Accepted Accounting Principles (GAAP) as well as remaining compliant with external governing bodies such as the Securities Exchange Commission (SEC). While many companies outsource the internal audit function to external auditing companies, there are distinct advantages to hiring an internal auditor for this situation.
As previously stated, the company has an out of control system. This will require quite a bit of time for the organization to transition into possessing an in control system. Outsourcing external auditing companies may be the best option for one that already has an in control system but for this situation, hiring an internal auditor will be more efficient and less costly. The internal auditor will communicate often with management and other key executives making changes and suggestions to the current system all while maintaining independence and objectivity. “Ongoing monitoring is an integral part of the day-to-day supervision, review, and measurement of the internal audit activity. Ongoing monitoring is incorporated into the routine policies and practices used to manage the internal audit activity and uses processes, tools, and information considered necessary to evaluate conformance with the Definition of Internal Auditing, the Code of Ethics, and the Standards” (theiia.org, attribute standard 1311, 2013).
Another role of the internal auditor is to establish procedures that improve corporate governance and operational procedures. This will...
Ron Mathieu
ACC/544
July 29, 2013
Joseph Poletti
Internal Auditor
A recommendation has been made for a publicly traded company to hire an internal auditor to clean up an out of control system. An out of control system could mean many things but none of them are desirable for any company especially one that is publicly owned. The company needs to maintain accurate financial records and produce correct financials statements. This means adhering to General Accepted Accounting Principles (GAAP) as well as remaining compliant with external governing bodies such as the Securities Exchange Commission (SEC). While many companies outsource the internal audit function to external auditing companies, there are distinct advantages to hiring an internal auditor for this situation.
As previously stated, the company has an out of control system. This will require quite a bit of time for the organization to transition into possessing an in control system. Outsourcing external auditing companies may be the best option for one that already has an in control system but for this situation, hiring an internal auditor will be more efficient and less costly. The internal auditor will communicate often with management and other key executives making changes and suggestions to the current system all while maintaining independence and objectivity. “Ongoing monitoring is an integral part of the day-to-day supervision, review, and measurement of the internal audit activity. Ongoing monitoring is incorporated into the routine policies and practices used to manage the internal audit activity and uses processes, tools, and information considered necessary to evaluate conformance with the Definition of Internal Auditing, the Code of Ethics, and the Standards” (theiia.org, attribute standard 1311, 2013).
Another role of the internal auditor is to establish procedures that improve corporate governance and operational procedures. This will...