A Short Note On Internal And Internal Audit Essay

A Short Note On Internal And Internal Audit Essay

Length: 793 words (2.3 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

Since I plan a career as a businesswoman and CPA, a conflict that is omnipresent in my mind is that of expanding a CPA practice while avoiding conflicts of interest. This is a common topic in the news, which I have analyzed utilizing the techniques and information in this week’s reading assignments. The specific conflict that intrigues me is whether it is appropriate for a CPA to perform an “internal audit” on a company and later perform an “external audit” for the same company. Failure to accept contracts for both internal and external audits can reduce business revenue and client satisfaction, however accepting such contract could result in a conflict of interest; I have analyzed this conflict utilizing the Root Cause analysis tool.
This internal conflict regarding if a CPA should do both external and internal audits for a company stems from a lack of consistent and clear regulations. In The Bahamas, where I reside, the law does not limit a CPA’s right to do both types of audits (The Government of the Bahamas, 2001). However, in the United State the government does bar CPAs from providing both types of audits due to concerns about conflicts of interest (The Economist 2010). Meanwhile, in Britain the government specifically states that firms may do both types of audits for a single company, since there is little to no risk of interest conflicts (The Economist 2010).
One can see both sides of the issue. By doing an internal audit, a CPA gains an enormous familiarity with the company. This could make that CPA most qualified to conduct an external audit because he or she already knows what to look for. Nonetheless, one could also consider that, since the CPA has been previously paid by the company, he or she may be bias...


... middle of paper ...


...oned. I would do this by explicitly citing the reasons for all my conclusions in all my reports. The risks with implementing this are:
a. Clients may not like the long reports
b. The solution may consume a significant amount of my time.
In the long term, I would take on the responsibility of actively lobbying for development of regulations to clarify this issue, similar to that in the United States or Great Britain. These efforts would be implemented by submittal of reports on the issue to The Government of the Bahamas. T he risks of implementing this are:
a. Being seen negatively in the industry as a complainer
b. Spending time lobbying with no return on my investment
Upon analysis of this issue, it is clear that the best course of action would be to conduct both types of audits, while meticulously documenting my actions and lobbying for advisory regulations.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay on A Short Note On The Internal And External Audit

- 1. People failure points : Although people do not seem to be the primary failure point, the top management could have addressed IT security as a business issue and raised security awareness among its employees. This would have made the TJX employees more vigilant in their day to day tasks and aware of the security threats to the organization. Both the internal and external auditors failed to notice the key problems with TJX systems like absence of logs, absence of network monitoring, presence of unencrypted data and retention of customer data years after it should have been purged....   [tags: Computer security, Security, Data security]

Better Essays
1214 words (3.5 pages)

A Brief Note On The Soc 2 Report Essay

- The SOC-2 Report What if a university has an outside company that provides database services to the universities’ admissions department. The university will want assurance that the service provider has adequate controls in place to keep their information confidential and secure. Unfortunately, the SOC-1 report falls short of providing this kind of assurance because it only provides assurance about the processes directly linked to the financial statements. This is where the SOC-2 report fills in the gap....   [tags: Auditing, Audit, Service provider, Service]

Better Essays
1011 words (2.9 pages)

Evaluation Of The Internal Audit Essay

- The purpose of the internal audit is to protect Costco 's assets through evaluating the acceptability and efficiency of internal controls; recognizing areas of possible risk, revenue improvement and/or cost reductions; and making sure transactions are authorized, completed, and logged as proposed. The internal auditors are accountable for guiding audits of all Costco’s local and global activities, its affiliates, and other entities Costco conducts business with as deemed necessary by management....   [tags: Auditing, Internal control, Audit]

Better Essays
723 words (2.1 pages)

State Of Indian Internal Audit Charter Essay

- STATE OF INDIANA Internal Audit Charter Introduction Internal Audit is an independent, objective, assurance, and consulting activity designed to add value and improve operations. It helps accomplish objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of governance, risk management, and control processes. Internal Audit is organized to examine and evaluate current and proposed processes and controls. The objectives of Internal Audit are to: 1. Promote effective and efficient controls through audits, reviews and objective consulting arrangements....   [tags: Internal audit, Auditing, Internal control, Audit]

Better Essays
1014 words (2.9 pages)

Roles And Responsibilities Of An Internal Audit Function Essay

- 1) According to the article authored by Mark Rupert, what are the seven best practices in the roles and responsibilities of an internal audit function. a. The seven best practices in the roles and responsibilities of an internal audit function include: i. Perform a risk assessment and determine the level of risk
 ii. Understand laws and regulations
 iii. Obtain and/or establish policies for specific issues and areas
 iv. Educate on the policies and procedures and communicate awareness v. Monitor compliance with laws, regulations, and policies vi. Audit the highest risk areas
 vii. Re-educate staff on regulations and issues identified in the audit 2) Describe some general differences betw...   [tags: Auditing, Audit, Internal control, Internal audit]

Better Essays
1665 words (4.8 pages)

Internal Audit And Non Financial Audits Essay

- Internal auditing is a function that is responsible for performing financial and non-financial audits within a wide range of areas of a business, as directed by the annual audit plan. It operates independently from other departments and reports directly to the audit committee, reside within an organization (i.e. they are company employees). Internal audit look at key risks facing the business and what is being done to manage those risks effectively, to help the organization achieve its objectives....   [tags: Auditing, Internal audit, Audit, Financial audit]

Better Essays
718 words (2.1 pages)

A Short Note On Accidental Damage Of Tablets And Computers By Onsite And Offsite Users

- (A) The threats (natural, human, etc.) to specific components of the system; As a general security assessment of the existing system possible threats include, theft of all equipment, to include computer software, computers, and IPads. The unintentional and intentional alteration of data by non-clinical staff, providers, pranksters, or hackers via the direct terminal link, the hospital’s computer system, and all LAN enabled devices. Computer viruses pose a threat to computerized patient data and all health care applications....   [tags: Computer security, Access control, Computer, Risk]

Better Essays
747 words (2.1 pages)

Internal Audit Team At Ventra Ionia Essay

- Internal Audit Team at Ventra Ionia Introduction Everyone scrambles and hides; it is audit time. Tension seems to be high during an internal audit as employees tend to feel as if they are being judged or set-up for failure. Automotive companies require suppliers to use internal auditors to verify various internal systems such as quality (Smith, Munro & Bowen, 2016). An internal auditor is trained to monitor, analyze and assess various processes within an organization (DeRose, 2015). An effective internal audit team is one of the best tools a quality department has; If Ventra Ionia can develop an effective internal audit team the company and employees will benefit....   [tags: Auditing, Financial audit, Internal control]

Better Essays
1738 words (5 pages)

Essay about Internal Audit : An Objective Assurance And Consulting Activity

- Introduction Internal Audit is an independent objective assurance and consulting activity designed to add value and improve operations. It helps accomplish objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of governance, risk management, and control processes. Internal Audit is organized to examine and evaluate current and proposed processes and controls. The objectives of Internal Audit are to: 1. Promote effective and efficient controls through audits, reviews and objective consulting arrangements....   [tags: Internal audit, Auditing, Management]

Better Essays
1038 words (3 pages)

Essay on Audit Plan For An Internal Audit

- BACKGROUND According to the audit plan approved by GARC for 2016, an internal audit was undertaken of the IT function in Auckland in April 2016. For KVB Group, most of the IT services are delegated to BancLogix System Co. Limited in Hong Kong, a fully-owned subsidiary of KVB Kunlun Holdings Limited. BancLogix provides both IT operations and application development services for the whole KVB Group. A small IT operation team is based in KVB Kunlun International (HK) Limited to provide an infrastructure level and partial application level support to the listed company and its subsidiaries....   [tags: Audit, Financial audit, Auditing, Access control]

Better Essays
1183 words (3.4 pages)