Audit Proposal

Audit Proposal

Abstract

An audit is crucial to a business and an auditor can identify areas of weakness in a company’s internal controls as well as make suggestions for improvements for future audits. The management at Kudler Fine Foods is requesting information on controls to implement and reduce the risks in the business.

Kudler Fine Foods management would like to see the proposed audit schedules for AP, AR, inventory management and payroll systems that we previously analyzed. We will distinguish between the types of audits that might be used for each process, recommend the audit most appropriate for each process, explain how the audits will be conducted and identify events that might prevent reliance on auditing through the computer.

Types of Audits

There are four main types of IT audits: 1) attestation; 2) findings and recommendations; 3) a SAS 70 audit; and 4) a SAS 94 audit (Hunton, Chapter 9, 2004). We will distinguish between the types of audits that might be used for each process.

Attestation

In an attest audit, an auditor will provide assurance on something for which the client is responsible. The responsible party is the client’s representative which could be the corporate controller. The responsible party makes an assertion by using some criteria. For example, the controller could make an assertion by a representation letter that the company’s internal control structure is effective using the standards of COSO. Following this the auditor performs an examination, review, or agreed-upon procedure (AUP) and then provides a written report or a “Report to Management” with the findings (Hunton, Chapter 9, 2004). The report states what it was asked to do and any findings or lack of findings to provide feedback to the user of the report.

Findings and Recommendations

A findings and recommendations report includes most reviews that are considered “consulting” or “advisory” services (Hunton, Chapter...