Audit Essay

Topics: Auditing, Internal control, Financial audit Pages: 4 (1079 words) Published: February 24, 2013
AL and MO is a building contractor, it is a middle sized company with turnover of nearly £15 million, but internal company has lots of problems, it will discover the fraud. As an accountant in this company, it is necessary to find the weakness in company and help the company to solve the current problem to consummate the system. It will make the company do batter in the future.

(a) Weaknesses in internal control and improve
Weakness 1 :This company has no internal audit function, its internal control systems is very basic. 1) The internal audit evaluates the all kinds of business and control to organization. It makes sure the organization whether compliance with the police and procedures, whether it meet a regulations and a criterion, whether use the sources effectively and economically as well as whether or not it achieves the organizations goals.

But this company of AL and MO, they have no internal audit function. They cannot look at how the company will manage. They cannot identify the company’s potential problem. They are unable to evaluate the risk management processes and give the recommendations for reaching the objective of organization.

The company should establish the internal auditing organization or the full-time internal auditor. For example, the internal audit can control and supervise MO in operational activities. It can evaluate the all procurement whether satisfy the regulations, whether meet the requirement of company, and the quote with the sales staff whether confirm to the stipulated price and so on. To AL, it can assess the factuality, legality and validity of finance revenues or legal problem on dealing with transactions. In a word, internal audit to evaluate the risk of management and to suggest for achieving the company’s target.

2) The internal control,’ internal control internal control is not simply a set of procedures and check but instead includes a whole range of activities...
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