Recommend an Internal Auditor Week 1 Acc544

ABC, Inc. Internal Auditor

Debie Aguilu

ACC 5424 / Internal Control Systems

October 3, 2011

Robert J. Cornett

ABC, Inc. Internal Auditor

As we know, ABC needs help with accounting practices and out of control systems. With ABC looking to go public next year, my recommendation is to have ABC hire an internal auditor to report to upper management providing evaluations of the financials and operations activities of ABC. This person will perform an in-depth review of operations and provide ideas improving the inefficiencies that ABC is incurring. The internal auditor is an employee of ABC but would provide an independent evaluations and reviews.

There are several benefits to have an internal auditor on staff at ABC. A big benefit for having acquired an internal auditor is the savings versus having to employ an outside service of an external auditor. ABC would obtain more for their money because an external auditor primary responsibility is to express an opinion of the financial statements not an opinion of the internal controls of the company. ABC would spend a fraction of the cost with an internal auditor.

Another benefit for having an internal auditor rather than an external auditor is an internal auditor becomes deeper involved in the business and becomes more knowable about the business. The internal auditor will have more access to confidential information providing management with more confidence in dealing with one person on day-to-day bases. The internal auditor provides overall more contribution to ABC and management versus an external auditor coming in for a short period of time.

The biggest benefit for ABC having an internal auditor is that the primary responsible for examining, evaluating, and monitoring the adequacy and effectiveness of their internal controls (Lehamn Brown, 2009). This would include the accounting system, business processes, financial reporting, and communications. The continuing monitoring of controls will...