Auditing is mostly of two types: Internal and external audit. Internal audit team is a team appointed by the management of the company which aims at ensuring that the company is acting according to the rules and operations are in compliance to all type of internal and external rules. Internal audit prepares a company for external audit by evaluating the operations and checking for fraud within management levels. External audit on the other hand is conducted by independent authorities who have no personal concern or take in the company and are appointed by the SEC or legal authorities to check the company’s operations. When an internal audit team audits, the company does not face any fine or legislation in case of fraud detection but in case of external audit team, companies face legislations, fine and other legal processes in case of any fraud in their operations. Fraud in operations is one of the most occurring and costly issues faced by organizations. Studies show that US organizations have faced a very significant and increasing proportion of fraud in their operations every year. US economy faces the highest proportion of fraud in the period of economic downturn that is because employees and management does not get money enough for their survival or many other reasons contribute. It has also been observed that proportion of fraud had been increasing with significant percentage each year since 2001 (Howe, 2009). As proportion of fraud is increasing in the organizations, it has brought high concerns to the management. Organizations today strive their best to lessen fraud and corruption in their operations. For this purpose they rely heavily on the internal audit team and internal auditing activities. Internal auditor reports only to the board of directors he gets better control on fraud and corruption because of the fact that board of directors have stake in the company and hence they don’t tolerate any kind of fraud and don’t hold any other personal interest. Organizations believe that as internal auditors review the activities in depth and monitor the operations independently without any personal take in them, they usually stem well in the areas where fraud is taking place. Internal audit teams get a good knowledge of the operations and organizational process over time and this is what makes it easy for them to detect any fraud happening. The internal auditors are believed to have better knowledge of the risk areas, control systems, employee profiles and this is what helps in effectively dealing with fraud in the organization. It has been stated by ACFE US that the internal audit team has detected the highest proportion fraud in organizations. The survey elaborates that internal auditors have no concern or personal interest in the organization. Rather they are independent authorities. Contrary to them, management has personal interest of bonuses, rewards and promotions as well as job retention which given them the way to fraudulent behavior. Management has their own personal interests apart from the organization’s goals which is what leads them to create fake management
Table of Contents Introduction 3 Some cases that describe how the internal audit (IA) detect and prevent the fraud 14 Cases of relevance # 1 14 Cases of relevance # 2 16 Cases of relevance # 3 18 Analysis the problems of the cases and give some solution 20 Cases of relevance # 1 20 Cases of relevance # 2 20 Cases of relevance # 3 21 Conclusion 21 WorksReferences cited 25 Responsibility of Internal Audit in the Detection and Prevention of Fraud Introduction Audit is generally defined as the evaluation of a material be it a person, a system, an organization or a project…
The researcher will discuss a problem in a company in a certain industry. The researcher will provide a proposal in which he will argue about the problem, afterwards he will present researches on the effect of that problem on the company and ways on how to solve the problem, finally he will present the outcome of the research including ways on how to overcome this problem.
Public and political interests in corporate governance can be said to thrive in times of corporate scandals. The corporate scandals that rocked Enron Corporation and WorldCom heightened questions on the integrity and reliability of corporate governance. Background Corporate governance refers to set systems, principles, and processes through which companies are directed and controlled.
Such scandals include Enron, WorldCom, and Tyco International etc. These scandals have raised concerns and responsibilities of the accounting and auditing bodies all over the world which are now subject to thorough scrutiny. The auditors now owe greater responsibility towards general public and are considered as the savior of their investments.
Research Table of Contents Table of Contents 2 1. Introduction 3 2. Literature Review 3 2.1 New methodologies in use 3 2.1.1 Computer assisted audit techniques 4 2.1.2 Analytical Auditing 4 2.1.3 Expert System 5 2.2 Information System Auditing 5 3. Methodology 6 3.1 Research Objective 6 3.2 Research Methodology 7 3.3 Instruments Used 7 4.
One of the attractive features is that it provides a better opportunity to investors to sell their securities easily. Investment in stock market is much better investment as compared to the other investments such as real estate. For each transaction, stock market plays it role as a defrayal-house which means that it assembles and distributes the shares with assurance of imbursement to the customers.
he flow of information across all the stakeholders ensures that every one of them is kept updated on every operational aspect of the organization (Griffin & Moorhead, 2011). Positions, functions, and roles of the entire organizational team sum up to constitute organizational