Objectives Of Internal Audit

Q 1.A,

Internal Audit: The Internal Audit processes within large Limited companies to ensure all operation are running correctly and effectively. Using internal auditors ensures the company has the ability to survive in a competitive business environment, and continue to prosper. The Internal audit department will examine the internal controls within an organisation to helping directors to take their right decision within right time.

External Audit: Company Law requires the Directors of a company to prepare a set of financial statement at the end of each financial year. These financial statements are produced to show proper business view and position to all share holder and stake holder. Government agency such as revenue commissioner also

The objectives are different, as well as other processes. These are the differences, and demonstrate the enhanced effectiveness of an internal audit over an external one:

• An external auditor reports to shareholders who are outside the governing structure of an organization, while an internal auditor reports to those within the governing structure. More direct change and good can be done for the organization when those involved in running it get the information from the auditor.

• The objective of an external audit is to give reliability and credibility to the financial reports that go to shareholders. The objective of an internal audit is to educate management and employees about how they can operate the business better and more effectively. This allows a business to prosper, both financially and in employee satisfaction.

• External auditors have no responsibility to the organization other than reporting on financial findings. An internal auditor is also a consultant, and has the responsibility of advising management and the upper authorities in the company as to how to implement their suggestions to make the company thrive

It makes financial information more accurate and more reliable.

Q.1D, The Accountants Role within organisation:

1. Preparation and presentation of timely accurate financial/Management accounts to management to help management interpret the financial information.

2. An accountant may also be responsible for ensuring that all financial reporting deadlines are met, internally and externally.

3. Investigation of fraud within the organisation, this is the Key role of the accountant in preparation of an audit at the year end.

4. The accountant assist the organisation to avoid rather than evade tax by using his/her knowledge of the tax laws(tax evasion is illegal)

Q.1E,

Financial Accounting:

Financial accounting is used to present the financial position of an organization to its external stakeholders. Board of directors, stockholders, financial institutions and other investors are the audience for financial accounting reports. Financial accounting presents a specific period of time in the past and enables the audience to see how the company has performed. Financial accounting reports must be filed on an annual basis, and for publically traded companies, the annual report must be made part of the public