Discuss why it is crucial that internal auditors report solely to the audit committee of the board of directors and answer to no other group.

Solutions

Expert Solution

The internal auditors are responsible for detecting and pursuing fraud within the firm. If management-level employees are involved, the internal auditors may fear losing their jobs if they blow the whistle on such activities. Thus, the internal auditors should report to the board of directors so that they do not fear any repercussions of their actions from top management.

They do not fear any repercussions of their actions from top management.

Junaid answered 2 months ago

Next > < Previous

Related Solutions

Discuss the difference between the Audit Committee Report and Auditors Report.

Why is an active board of directors audit committee important to an organization?

Practice questions 1.Internal auditors perform the audit at the request of the board of directors to...

Practice questions 1.Internal auditors perform the audit at the request of the board of directors to protect investor interests. * True False 2.A sole proprietorship is a business owned by one or more persons. * True False 3.The timeliness principle assumes that an organization's activities can be divided into specific periods. * True False 4.Withdrawals are a type of transaction that affects equity. * True False 5.Ownership of a corporation is divided into units called shares. * True False 6.The...

What is the role of the audit committee of the board of directors?

The audit committee reports directly to the external auditor. board of directors. internal auditor. chief executive...

The audit committee reports directly to the external auditor. board of directors. internal auditor. chief executive officer. The treasurer of a company is responsible for identifying areas where a firm might incur substantial losses. preparing financial statements for the annual report. making sure a firm has adequate cash available. managing a firm’s risk exposure in financial and commodity markets. Which of the following is an example of frivolous agency costs? Providing lunch for the employees. Excessive perks. Hiring external auditors...

the audit committee of board of directors of the oil field supply company engaged the audit...

the audit committee of board of directors of the oil field supply company engaged the audit firm of Martinez and James LLP to preform an audit of the company for years ended May 31 2016 and May 31 2017 the CPA firm completed the audit and issued a standard un modified report for a non public entity dated September 30 2017 Prepare the audit report

Describe the role and responsibilities of the audit committee of an organization’s board of directors? Find...

Describe the role and responsibilities of the audit committee of an organization’s board of directors? Find an example of an actual company’s audit committee charter and refer to this in your discussion of the audit committee’s duties.

an audit committee must be comprised of "outside" members that sit on the board of directors,...

an audit committee must be comprised of "outside" members that sit on the board of directors, must be "financially literate" and have at least one "financial expert". With this in mind I want you to find a publicly traded company and review their audit committee. Pick whatever company you wish! Please report as your discussion topic the following: Company you selected (along with company url) Names of individuals on the audit committee Which member of the audit committee would you...

(Auditing Principles & Procedures) Define corporate governance, the board of directors, and the audit committee and...

(Auditing Principles & Procedures) Define corporate governance, the board of directors, and the audit committee and explain how they relate to each other.

The Sarbanes-Oxley Act mandates that the audit committee of the board of directors of public companies...

The Sarbanes-Oxley Act mandates that the audit committee of the board of directors of public companies be directly responsible for the appointment, compensation, and oversight of the external auditors. In addition, the audit committee must pre-approve all non-audit services that might be performed by the audit firm. Discuss the rationale for this mandate as opposed to the alternative of letting the shareholders, CEO, or CFO have these responsibilities. What factors should the audit committee consider in evaluating the independence of...

Subjects