Question

First, you will prepare a memo to be reviewed by the chief financial officer (CFO) of your chosen company that summarizes the audit process conducted. Then, you will assume the role of CFO of the company and prepare a memo to the Board of Directors as to what potential issues the external audit team might find and what the company's response should be.

Answer 1

Auditing is a valuable skill in accounting and business, as the odds are very high that you or your organization will be subject to a compliance, federal, IRS, internal, government, or revenue audit at one point in your career. Accountants are required to make professional judgments on both the financial accounting issues and internal accounting forecasts within their organization. The auditor must provide fair, unbiased, materially correct information for investors, employers, employees, and independent stakeholders

Specifically, the following critical elements must be addressed:

A. A memo to be reviewed by the chief financial officer (CFO) that summarizes the audit process.

1. Explain any sampling or other audit work that could be done, and if you would recommend the company pursue this additional work.

2. Make recommendations to the CFO on how to mitigate potential risk factors for major business transactions identified in the audit report.

B. Assume you are CFO.

A memo to the Board of Directors as to what potential issues the external audit team might find and what the company’s response should be.

1. Evaluate the findings from the audit report. Be sure to view these findings from the CFO’s point of view.

2. Develop a strategy to mitigate risks identified in the audit report. 3. Describe how the company might implement the strategy based on the findings from the audit report