Question:
- Auditors have come into a department as part of a company-wide audit prior to issuing an audit opinion for the company’s financial reports. In a one- to two-page paper (not including the title and reference pages), explain what the staff should expect the auditors to do. Be sure to include the requirements of the Sarbanes Oxley Act in your explanation.
- Your paper must be formatted according to APA style as outlined in the Writing Center, and it must include citations and references for the text and at least two scholarly sources from the University of Arizona Global Campus Library.
- Carefully review the Grading Rubric Links to an external site. For the criteria that will be used to evaluate your assignment.
Answer:
Auditors play a significant role in assessing a company’s financial performance to help investors understand the true financial health of the company. The role of an auditor is to provide an objective opinion on the true financial position of a company. Auditing is necessary for creditors, shareholders, and other users of financial information to ascertain whether a company’s financial reports are accurate and can be used to make investment decisions. In this regard, a firm’s staff expect auditors to check the company’s financial transactions to identify possible fraud, errors or misrepresentation of facts in the firm’s financial statements.
Employees within specific departments expect the auditor to access the company’s files, books of account, and other sources that could reveal financial transactions. Auditors are also expected to check an organization’s internal controls. Usually, a company implements certain controls to ensure that their financial information is accurate. Therefore, the internal controls of the company provide auditors with evidence regarding the accuracy of financial statements.
A company’s staff within specific departments also expect the auditor to assess the procedures, processes and control system adopted in the company. The Sarbanes Oxley Act requires auditors to check the roles and competencies of employees who are given the responsibility to perform internal controls. Based on this Act, auditors should examines various documents and files within the department to see whether there are control issues that could affect the accuracy of the company’s financial reports and disclosures.
Based on Sarbanes Oxley Act, auditing is used to check documents and files within departments to see whether the company has implemented the required controls and documentations related to financial matters. Employees expect auditors to check documents for any material changes in the company’s procedures and control activities that may affect its financial position. Generally, employees should keep their internal controls and accounting procedures accurate and consistent with the organization’s accounting practices and business objectives.
