Got a tricky question? Receive an answer from students like you! Try us!

Internal Audit / Accounting - Essay Example

Only on StudentShare
Pages 4 (1004 words)


Capital investment decisions encompass two aspects of long-range profitability: first, estimating the future net increases in cash inflows or net savings in cash outlays which will result from the investment; and second, calculating the total cash outlays required to effect the investment…

Extract of sample
Internal Audit / Accounting

The risk is that the price are escalated to a defined formula, which means that even if economic situation in the country is changed significantly there is a risk that the defined formula will not satisfy the need of Global Power in three years. But, it will not have possibility to buy at another supplier. Another risks are unstable economic and political situation in the Eastern European countries. Low level of GDP and high inflation rate are the main risks for Global Power. It should be noted that for auditor it would be difficult to estimate long-term risk of investment because economic instability has a great impact on the industry in general. It is stipulated that opportunities arise under a government privatization program expected that in three years the electricity market is to be in place, but the auditor should assess the possible risk of this market change occurred in three years. The auditor of the company should pay a special attention to the period of expected surplus, and the rate of return during this period, and after it.
The internal audit for Global Power is seen as a cost effective way of providing reliable information in a consistent way using a mix of techniques for risk assessment.
The objectives of the auditor before financial close: to evaluate the situation and make calculations which will help the investor to make a decision about the project, taking into account possible risks, and calculate the sum of investment with the minimal risks. NPV can lead to the expected maximization of wealth. ...
Download paper
Not exactly what you need?

Related Essays

Audit Reports
Audit Report on financial statements of an entity is normally an independent auditor's report. Internal auditors also submit reports on assessment of internal controls installed by entities voluntarily or as statutory compliances.…
5 pages (1255 words)
Audit Strategy Report for Solid Bank Plc
The objective of this audit is to assess the risks to the Bank given the current economic environment in UK & the performance of the Bank and report to the board of directors. This audit strategy is first hand presentation and may be subject to change/modifications if deemed necessary during the audit process (proposed in accordance with the guidelines of ISA 300). This plan & all subsequent changes shall be documented & shared with all members of the customer charged with governance & management. The focus of the audit shall be on the following:…
6 pages (1506 words)
Internal Control System
Internal Auditing is defined as an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization to accomplish its objectives by evolving a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. The internal audit activity evaluates the adequacy and effectiveness of controls that encompass the organization's governance, operations, and information systems (Arens, Loebbecke, Lemon, & Splettstoesser, 2006). Internal audit reviews include…
13 pages (3263 words)