Case Analysis: Inside an IT audit by Meridith Levinson (CIO)
This case covers an audit on the IT department of Bluegreen Corporation; bluegreen corp. is a real estate developer and resort operator based in Florida, arranged by the company’s’ Vice President and CIO Sheila Beauchesne to achieve growth in the IT infrastructure of the company. The audit was carried out by the VP and CIO Sheila Beauchesne to understand the company’s overall spending and expenditure on its IT, GIP (Global information partners) were hired as the auditing team, Bluegreens IT financial auditor Krista Parker was made the audits main point of contact in case when the auditing team needs any information regarding the organization, and the IT manager of support Gary Kaul
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GIP initially anticipated this audit to be fairly easy but it appeared that it wasn’t as straightforward as it looked; the final analysis on the audit had all the results and findings which were presented to Sheila Beauchesne and her staff by GIP’s auditor David Burkett. The results indicated several points such as the quality of service provided by Bluegreen Corporation is fairly lower as compared to other organization which is why their costs are low. One of the key findings that the audit brought up were Bluegreen’s telecommunication rates which were classified as very competitive by the auditing team as they were spending a lot less annually than the other organizations which were taken as reference and the results also showed that there was need in improvement in the help desk support department. But there were several needs from Bluegreen Corporation which were not fulfilled, like costs relating to software licenses, hardware and costs relating to application development and testing were never …show more content…
Data acquisition and information management was one of the key factors of the project. There was not a lot of information available so GIP needed to dig in for the necessary details themselves. In my opinion, GIP relied a little too much towards the information that was fed by the Bluegreen associates, which resulted in discrepancies. Also, lack of data tempted GIP to generalize information based on the data from Indianapolis call
In order to ensure an organization’s financial order, auditors with international standards are a vital part. However, very few auditing companies exist in Afghanistan that can provide auditing services in compliance with international accounting standards. Fortunately, ACC is one of those few auditing firms that can confidently say that its auditing services are in the highe...
The oversight responsibilities of the board, the CAE lacking of expertise or broad understanding of financial controls and responsibilities, and the understaffed internal audit functions lacking of independence and direct access to the board of directors contributed to the absence of internal controls. To begin with, the board should be retrained to achieve financial literacy to review financial reporting. Other than attending formal meetings, the board of directors should be more involved with the management. For the Audit Committee, the two members who were recruited as acquaintances to Brennahan need be replaced with experts who are more sufficiently knowledgeable about accounting rules beyond merely “financially literate”. Furthermore, the internal audit functions need to expand with different expertise commensurate with the expanded activities of the organization, testing financial reporting rather than internal controls from an operational perspective. The CAE should be more independent and proactive to execute audit plans, instead of following orders from the CFO, and initiate a direct and efficient communication between internal audit and audit
This case assignment will discuss managerial accounting and different income statements a business owner may use internal to the company. Divided into two parts, part one will discuss and analyze the difference between managerial and financial accounting, the needs for financial information used for internal purposes. Additionally, it will focus on the managerial accounting profession and how its roles have changed in today’s business. Expanding on the profession, it will comment on the Certified Management Accountant (CMA) certification and how it differs from the CPA certification. Part two of this assignment
I have taken the time to review last year’s audit and made note of the minor problems dealing with human error and also noted that correction have been made. Because of this problem I would like to start my review here to test the controls for eliminating human errors. The IT specialist will be reviewing the internal controls of your electronic systems and
Evaluating is the strategy of investigating & examining any part of a business, whether money related or non-fiscal. Inspectors are completely prepared to spot regions of required change, potential dangers and occurrences of deceptive direct in their general vicinity of adroitness. Reviews can disturb the ordinary stream of business in an organization, yet the capability to spot and location potential shortcomings generally exceed any transitory misfortunes of gainfulness. Around the extent of issues reviews can audit are human assets approaches, operational strategies, and quality or security arrangements and, obviously, bookkeeping reviews.
The inspection by the PCAOB revealed many deficiencies with KPMG LLP. First, the Firm assumed that the controls over revenue and inventory were the same at all of the client’s locations, but they ended up being different (5). The Firm did not use enough professional skepticism in its decision to test less locations, since they thought all of the locations would be the same. This deficiency related to the audit of internal control. If the controls were different then items were reported differently, which goes against the principle of consistency.
or unwilling to take on the case. This could be due to the difficulty in prosecuting these types of cases, the limited resources available within the agency, the relatively small amount of money stolen (too low to devote resources), or any other number of reasons. If no criminal charges are filed, the organization may have to hire a lawyer to sue for the return of the stolen funds, which can be an expensive and time-consuming process.
Even though before this time period a company’s auditors were required to maintain an independent view since they were suppose to act as a protector to all end users it was not always the case. An environment was created with a Utilitarian approach that said company’s can offer package services that offer consulting services why at the same time audit the company’s financial statements. But when issue arose it became difficult to jeopardize the superior revenue that was obtained through consulting
Individual Article Review Lily Cobian LAW/421 March 31, 2014 Ramon E. Ortiz-Velez Individual Article Review Introduction My article review is based on Sarbanes-Oxley and audit failure, a critical examination why the Sarbanes-Oxley Act of 2002 was established and why it is not a guarantee to prevent failure of audits. Sarbanes-Oxley Act talks about scandals of Enron which occurred in 2001 and even more appalling the company’s auditor, Arthur Anderson, found guilty of shredding company documents after finding out Enron Company was going to be audited. The exorbitant amounts of money auditors get paid to hide audit discrepancies was also beyond belief. The article went on to explain many companies hire relatives or friends to do their audits, resulting in fraud, money embezzlement, corruption and even the demise of companies. Resulting in the public losing faith in the accounting profession, the Sarbanes-Oxley Act passed in 2002 by congress was designed to restrict what company owners and auditors can and cannot do. From what I gathered in the article, ever since the implementation of the Sarbanes- Oxley Act there has been somewhat of an improvement but questions are still being asked as to why there are still issues that are not being targeted in hopes of preventing more audit failures. The article also talked about four common causes of audit failure: unintentional auditor mistakes, fraud, fatigue and auditor client relationships. The American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct clearly states an independent auditor because it produces a credible audit, however, when there is conflict of interest, the relation of a former employer, or a relative or even the fear of getting fire...
Firstly, external auditors need inquiry the tone of the top, because it can affect the culture, ethical behaviors and management of company, and also have an influence on completing expected value and internal budget. The auditors and the company negotiated the audit objectives, including the focus of audit content. The company authorized to audit staff, through a dedicated data port on the system to do real-time monitoring. We found the problem, real-time notification of the Board of Directors. Besides, auditors should estimating the significance and likelihood of occurrence of the risks that mentioned in the last part. Auditors can separately establish a risk control model based on the type of transaction and project data may exist for projects focusing on monitoring. As for the control activities, auditors should check the accuracy and completeness of transactions in information processing and comparing actual finance to budget. When data is present and anticipated significant differences, the company needs to inform the auditor investigation. During the planning phase, called by the auditors customers ' financial information, analyze the customer 's financial status, risk may exist to predict. Entry tickets for all of the company and the project should be documented, to ensure that all are kept in the company safe. For the number of items and bills, funds and stocks, the staff has
The purpose of internal auditing and the professionals who provide internal auditing services according to the definition created by the Institute of Internal Auditors is to provide “an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.” Several guidelines and processes have been created to aid an internal auditor in providing the objective, value adding services they’re supposed to. The International Professional Practice Framework is the compass that provides internal auditors
Sometimes fraud may be created and concealed in a way that is so well-organized that it might be overlooked if auditors fail to perform reasonable care and skills. This always happens in entities that have knowledgeable people in accounting, finance and so on. Therefore, every auditor must maintain a questioning mind throughout the audit and set in his mind that material misstatement due to fraud may exist even though his past experience with the clients shows that the clients are indeed
The conversion reveals that Mr Ban, the ex CEO used to have frequent disputes with Janet, CA, the predecessor auditor. Janet was discharged after informing the ineffective the internal audit department. It reflects that management not willing to accept suggestion given by the predecessor auditor. Fraudulent activities such as incorrect or inappropriate transactions could not be detected effectively with a weak internal audit department..
Auditing has been the backbone of the complicated business world and has always changed with the times. As the business world grew strong, auditors’ roles grew more important. The auditors’ job became more difficult as the accounting principles changed. It also became easier with the use of internal controls, which introduced the need for testing, not a complete audit. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. Computers played an important role of changing the way audits were performed and also brought along some difficulties.
Overall, the company is having ineffective controls regarding different departments and in the whole organization. An effective internal audit department should be established within the organization which should test the effectiveness of these controls on regular basis and make it sure that all controls are working effectively and efficiently with the different departments of the organization. Also the Internal auditor should implement the most effective processes and measures to prevent and detect the fraud, corruption and non compliance with the laws and regulations in the organization. Establishment of internal audit committee would be helpful in this regard which comprises of executive and non executive directors.