Analysis
Due to the lack of qualified and engaged auditors, Ventra Ionia needs to evaluate their current audit program. There are many structures the audit team can take. Does Ventra want to hire a few full-time employees whose only responsibility would be to audit the various processes within the factory? Does Ventra want to conduct an internal auditor training to develop current employees? Does Ventra want to create a partnership with other factories in the area or sister plants to create a co-sourcing or consortium arrangement? Does Ventra want to hire an outside company to conduct all internal audits and outsource the process? There are many options Ventra could choose. The following two options are suggestions Ventra could use to develop their internal audit program.
Develop New Nontraditional Audit Team
The first option would include using an audit team similar to what Ventra Ionia is using now with planned audits through the year. All auditors would be requested to audit in addition to other job responsibilities and would be required to perform at least five audits a year in areas they are independent of responsibility in. Current auditors, with an exception of the gentleman that is slated to retire, will be asked to be a member of the audit
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A discussion of customer requirements will be conducted in every meeting with each meeting focusing on one customer. The audit team will also discuss ways to improve the current audit process. New auditors will meet with the lead auditor once a quarter to discuss development and areas they would like to work on to customize their training plan for their success. The team would be assessed in the number of customer concerns or problems that arise out of the facility and the score of external audits. The audit team meetings are scheduled for October 2016, January 2017, April 2017 and July
Arens, Alvin A., Elder, Randall J., and Beasley, Mark S. (2012). Auditing and Assurance Services:
At twelve fifteen the firm have their quarterly meeting called WE Incorporated, the meeting starts out with birthdays and work anniversaries. The accounting manager states TARGETS for each individual department. The different departments state commissions and other new accounts. The different departments vary as such: Commercial Lines, Personal Lines, Claims, Accountant, Administrative, Procedures, Rewards and Recognition and Events.
Objectivity also needs to be evaluated to make sure the internal audit is reliable. The internal audit needs to be free of conflicting responsibilities as well
According to the article authored by Mark Rupert, what are the seven best practices in the roles and responsibilities of an internal audit function?
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
...ions and to provide a thorough analysis of the reports and statements prepared by the internal auditors before certifying their validity. Auditing in order to be an efficient form of corporate governance needs to be pro-active and watchful. Satyam’s case provides us with very useful practical lessons that can be applied to ensure efficient corporate governance. Useful practices to reduce the risk of poor auditing performance may include (a) periodic rotation of audit firms and audit firm partners, in order to avoid collusion between the to entities and reduce dependency; (b) regular peer review, to expose possible fraudulent activities or negligence; (c) evaluation of reports of audits, transparent corrective actions and clarity in reports, which can enhance and ensure trustworthiness in the auditing system as an efficient and effective form of corporate governance.
For instance, through introducing a disciplined approach IA can enhance and assess the efficiency of risk management, control and governance processes. The requirement for establishment of IA differs from the requirement for external auditors. However, The UK Corporate Governance code demand all listed companies to obtain an IA department. In order to found an efficient internal audit department, there are several factors that must be considered. Therefore in this text we are going to discuss in brief some of the factors that Dust& Rolls ' finance director must consider prior establishing such department (Millichamp and
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
The value chain analysis would allow me to assess the organization; functionality, resources, customers, marketing, purchasing, research and development, and human resources. (Coulter, 2013, p. 99-100) The internal audit would analyze the organization’s resources and capabilities. (Coulter, 2013, p. 101) This would allow me to see if we could expose the strengths and weaknesses of the production, marketing, research and development, financials, management, technology, board of directors, organizations structure and the culture. (Coulter, 2013, p. 102-104) Based on the case study I think I would find areas in the management, technology, and the structure of Avon that would need improvements. I think being able to understand what is going on internally should be the focus. I do think you can tackle external issues until you have your house in order. I do not think lay offs are a solution. I think an organization should exhaust all other tactics before going that
This topic was selected among a series of topics of general interest in the area of strategic audit for a corporation, as a class requisite. The different aspects of development and research studies findings are discussed in detail or briefly. The subject of “Strategic Audit of a Corporation” is what this paper is about. Some of these topics are briefly discussed. Ford Motor Company
The article discusses the role and objective of auditor in corporate governance. It discusses and analysis the composition of the audit committee and also includes the recommonation of various committes. It also talks about the audit committee, its relation with the auditor and corporate governance. Moreover, before concluding the artcile the author discusses the “Governance in today’s Parlance” in which the author analysis the current parlance of the corporate governance in regards to legality and other compliance. The author has discussed the data of 2002 of the percentage of the companies having audit committee and also the number of independent directors required in a audit
Internal auditing has become an important part of corporate governance. Internal auditors are tasked with protecting an entity’s assets and producing reliable accounting reports used in decision-making processes. However, the most vital role of today’s internal auditor is testing the efficiency and effectiveness of all aspects of an entity’s operations (e.g., financial and nonfinancial; In’airat, 2015). According to In’airat, the components of corporate governance must cooperate with each other to ensure the efficiency of a functioning business. These components of corporate governance include, but are not limited to, the audit committee, internal auditor, executive management, financial management, and external auditors. Of these components,
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.
that needs to be audited. This research will help the team to get familiar with the
The major characters of the tradition audit are all information what is needed by auditors are on the paper and the manual calculators and without high communication technology. Auditors usually were limited by the place in the paper time. When a several people are working on the same auditing project for a client with offices in cities across the country, even worldwide, it takes a lots all time those auditors get the information which they need from the client, even there is risk paper information disappear for many reasons. on the another hand, mail paper information increase the auditing cost. The mistake caused by the manual calculators inevitably, no matter how fixed auditors concentrate on recalculate is, after all auditors are human. The global business become major in the modern business world, some example, several auditors who are in different locations are working a same auditing project, or auditors are in different city even country with the client, when there is issue among these auditors or between auditors and client, they only can communicate with each other by phone or be together and have meeting. Phone call can not make sure information been watched in the same time when the voice is talking about the issue, but having a meeting takes time and money make all people together, it increases auditing cost.