Internal and External Auditing
‘Timely and valid internal and external audits are a primary safeguard against unethical financial behaviour’. Assess the accuracy of the statement.
INTERNAL AND EXTERNAL AUDITING
Introduction by Emil Nacua
Timely and Valid internal and external audits are a primary safeguard which prevents unethical financial behaviour within a business. Audits examine the past and present financial records as they are important to maintain accuracy for those who use the records as they are an aspect of control which is used by the business. This business report will assess the effectiveness of audits as a primary safeguard against unethical and financial behaviour.
Audits
Types of Audits may consist of:
Internal Audits
Management Audits
And External Audits
Internal Audits
Internal audits is the control conducted by employees which involve helping businesses achieve their financial objectives which are aimed to identify how well risks are managed including whether the right processes are in place, or whether agreed procedures are followed, like class role calls. This process helps prevent the risk of unethical behaviour as it helps control the risk of accuracy and dishonesty, for instance, the purpose of a role call which is performed by a teacher (employee) to ensure that all students are in school today and those who are not. A business that doesn’t perform internal audits will likely have the case of fraud, theft, dishonesty, performance of accounting standards and accuracy being reported on financial reports for the position of a business. An example of a business that has committed unethical behaviour resulting in a $30 million net loss is ING because of a senior accountant who made 200 illegal transfers into her personal accounts, or directly to shops and real estate agents. By performing internal audits as a primary safeguard would prevent financial behaviour for ING.
Management Audits
Management audits are the process conducted to review the strategic
INTERNAL AND EXTERNAL AUDITING
Introduction by Emil Nacua
Timely and Valid internal and external audits are a primary safeguard which prevents unethical financial behaviour within a business. Audits examine the past and present financial records as they are important to maintain accuracy for those who use the records as they are an aspect of control which is used by the business. This business report will assess the effectiveness of audits as a primary safeguard against unethical and financial behaviour.
Audits
Types of Audits may consist of:
Internal Audits
Management Audits
And External Audits
Internal Audits
Internal audits is the control conducted by employees which involve helping businesses achieve their financial objectives which are aimed to identify how well risks are managed including whether the right processes are in place, or whether agreed procedures are followed, like class role calls. This process helps prevent the risk of unethical behaviour as it helps control the risk of accuracy and dishonesty, for instance, the purpose of a role call which is performed by a teacher (employee) to ensure that all students are in school today and those who are not. A business that doesn’t perform internal audits will likely have the case of fraud, theft, dishonesty, performance of accounting standards and accuracy being reported on financial reports for the position of a business. An example of a business that has committed unethical behaviour resulting in a $30 million net loss is ING because of a senior accountant who made 200 illegal transfers into her personal accounts, or directly to shops and real estate agents. By performing internal audits as a primary safeguard would prevent financial behaviour for ING.
Management Audits
Management audits are the process conducted to review the strategic