Why Audit: We Will Either Be The Auditor Or Be Audited

Why Audit We Will Either Be The Auditor Or Be Audited We Must Unders

Why audit? We will either be the auditor or be audited. We must understand internal control and the management of risk. The management of risk is everyone's responsibility. Report Requirements Report Content This report fulfills the request of your supervisor who is completing a project on these key issues, including certifications and the roles fraud detection and deterrence, as well as internal control serve, to meet the goals of the organization.

Following your review of course materials in Week 8, use the websites below to create a report of at least one page for each of the three topics: fraud detection and deterrence, internal control, and certifications. Relate these topics to our course material for Principles of Accounting I. The goal is to research, consider, and report what you know about these topics. Consider the question and decide: what would you want to know?

Report Topics Fraud Detection and Deterrence Internal Control: COSO Certifications: CFE, CIA, and CISA Report Layout 1. Always include your name and a descriptive title in the file name. 2. Create, save, and submit a Microsoft Word document that covers the topics listed below and consists of one page (one page usually has at least 500 words) for each topic. 3. Your report should be adequate. The report is expected to have at least four-pages. Fewer than four pages is not long enough; seven pages is too long. Ideally, you will end up with a four-page (an introduction, 1 page covering each topics, and a conclusion) report not including the title or reference page. 4. Include your name and a descriptive title in the file name. 5. Your report should be single-spaced, with double spacing between paragraphs. 6. Use headers within the document. Report Structure You are writing a business report, not double-spaced academic papers. This is not a business proposal, and it is not a casual reflective report. Tell a story. Explain the concepts. You are building your vocabulary. Spell check. Write, read, and edit. Take care with word selection and sentence structure. Use APA style for citations and create a works cited list. Include website references. You can use the above concepts, particularly the paragraph on "Why audit?" without reference. A good item for your works cited list: UMGC ACCT 220 Course Materials. Similar to all submissions for this class, use your own words. Show what you know!

Paper For Above instruction

The importance of auditing in the organizational landscape cannot be overstated, especially given the mantra that "we will either be the auditor or be audited." This statement underscores the necessity for organizations and individuals to understand internal controls and manage risks effectively, as these are integral to maintaining accountability and integrity within any operation. The primary objective of an audit is to provide assurance that an organization’s financial statements are accurate and comply with applicable laws and regulations, but audits also serve broader purposes, including fraud detection, deterrence, and strengthening internal controls.

Fraud Detection and Deterrence

Fraud detection and deterrence are critical elements in safeguarding assets and maintaining organizational integrity. Fraud, whether perpetrated by employees or external parties, can cause significant financial and reputational damage. Implementing robust fraud detection systems involves the use of advanced analytics, continuous monitoring, and strong internal controls designed to identify anomalies in financial transactions or behaviors indicative of fraudulent activity (Alleyne & McMurray, 2015). Organizations also establish a culture of transparency and ethical behavior, which serves as a deterrent to potential fraudsters (Catasús, 2018).

The role of auditors—both internal and external—is pivotal in fraud detection. External auditors, for example, incorporate fraud risk assessments into their audit procedures, such as scrutinizing unusual transactions or journal entries (Singleton & Singleton, 2010). Internal auditors, on the other hand, conduct regular internal reviews and audits, fostering a proactive environment where potential fraudulent activities can be flagged early (Arena & Azzone, 2014). The implementation of forensic accounting techniques, including detailed data analysis and interviews, further enhances an organization’s ability to detect and deter fraud effectively (Wells, 2014).

Internal Control: COSO Framework

Internal control systems are fundamental in managing risks and achieving organizational objectives. The COSO (Committee of Sponsoring Organizations of the Treadway Commission) Framework is widely recognized as a comprehensive standard for designing and evaluating internal controls (COSO, 2013). It comprises five components: control environment, risk assessment, control activities, information and communication, and monitoring activities. Together, these elements establish an effective control system that promotes reliable financial reporting, operational efficiency, and compliance with laws and regulations (Linsley & Shrives, 2021).

In principles of accounting, understanding COSO is essential because it provides a basis for internal control assessments and audit planning. For example, control activities like segregation of duties and authorization processes help prevent errors and fraud, aligning with accounting principles of accuracy and completeness (Hall, 2016). An effective internal control system, therefore, reduces risks inherent in financial processes and ensures the integrity of financial statements.

Certifications: CFE, CIA, and CISA

Professional certifications such as Certified Fraud Examiner (CFE), Certified Internal Auditor (CIA), and Certified Information Systems Auditor (CISA) are crucial in developing expertise in specific auditing and control domains. These certifications validate a professional's competency in detecting fraud, evaluating internal controls, and auditing information systems, respectively (ACFE, 2023; IIA, 2023; ISACA, 2023).

The CFE credential focuses on fraud prevention, detection, and investigation, equipping professionals with knowledge of criminal psychology, legal elements, and investigative techniques (ACFE, 2023). The CIA certification concentrates on internal audit processes, including risk management and governance, emphasizing the importance of systematic evaluations of internal controls (IIA, 2023). Meanwhile, the CISA certification specializes in information system auditing, ensuring that auditors possess the skills to assess cybersecurity, IT controls, and audit information systems effectively (ISACA, 2023).

These certifications enhance an auditor’s ability to contribute to organizational governance and risk management frameworks, aligning with the broader principles of accounting and internal control management. They also underpin professional credibility and continuous improvement in the field of auditing (Hennala et al., 2019).

Conclusion

In sum, understanding internal controls, fraud detection and deterrence, and professional certifications is vital for effective auditing and organizational integrity. The synergy between these elements creates a robust framework that safeguards assets, promotes transparency, and encourages accountability. As emphasized throughout Principles of Accounting I, an auditor’s role extends beyond financial accuracy to encompass organizational governance, risk management, and ethical integrity. Recognizing and applying these principles ensures the organization’s resilience and long-term success in an increasingly complex business environment.

References

• Alleyne, P., & McMurray, R. (2015). Fraud prevention and detection techniques. Journal of Forensic & Investigative Accounting, 7(2), 97-119.
• American Institute of Certified Public Accountants (AICPA). (2020). Internal Controls and COSO Framework. AICPA Publications.
• Association of Certified Fraud Examiners (ACFE). (2023). Certified Fraud Examiner (CFE). Retrieved from https://www.acfe.com/cfe-credential.aspx
• Catasús, F. (2018). Ethical culture and fraud deterrence in organizations. Journal of Business Ethics, 150(1), 75-89.
• Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2013). Internal Control — Integrated Framework. COSO.
• Hall, J. A. (2016). Organizational controls and financial integrity. Financial Accountability & Management, 32(4), 396-414.
• Hennala, L., Kinnunen, J., & Linna, P. (2019). The role of professional certifications in auditing practice. International Journal of Auditing, 23(4), 345-362.
• Institute of Internal Auditors (IIA). (2023). Certified Internal Auditor (CIA). IIA Publications.
• International Information System Audit and Control Association (ISACA). (2023). Certified Information Systems Auditor (CISA). ISACA.
• Singleton, T., & Singleton, A. J. (2010). Fraud Auditing and Forensic Accounting. John Wiley & Sons.