Acc 544 Week 1

Topics: Auditing, Internal control, Internal audit Pages: 2 (668 words) Published: May 20, 2013
Today’s business environment is becoming increasingly complex. Companies are new constantly implementing new technologies processes to help with output and efficiencies. With every technology and process the correct controls must be put in place. In addition to these self implemented tools, companies are under increased government regulation to validate their internal processes and controls. All of this activity needs a point person. That point person is the internal auditor. The purpose of this brief is to define the role of the internal auditor. Why the role is necessary and to recommend a qualified candidate for the role. To understand how the addition of an internal auditor will help a business, the exact role and function of the internal auditor must be known. An internal auditor is an employee of a company that provides the organization with an independent assessment of the organization’s risk management and internal control. Additionally, the internal auditor ensures a company is in compliance with government regulations. This has been a point of emphasis in recent years with the passage of large-scale government regulations such as the Sarbanes-Oxley Act of 2002. Ultimately the findings and recommendations of the internal auditor seek to improve a company’s efficiencies and operations.

The need for an internal audit function cannot be understated. While the need to properly assess a company’s risk and controls has always been important, in today’s world it is mandatory. The accounting scandals, such as Enron and WorldCom and the early 2000’s led to the passage of the Sabanes-Oxley Act (SOX). SOX aimed to give the investing public confidence in the financial statements of company’s by offering guidelines and spelling out regulations that publicly traded companies must adhere to.

There are two sections of SOX that are of particular interest regarding a company’s internal controls. They are sections 302 and 404. Section 302 of SOX requires...
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