Guide To Internal Auditing | What is an Internal Audit | Good Accountants

internal audit

internal audit

An internal audit can be defined as an independent evaluation of an organization to add more value to it and improve its operations. An internal audit helps organizations adapt a more sound approach, and fine-tune its progress to increase the effectiveness of corporate governance, control, and risk management. An internal audit makes all this possible by providing suggestions based on the analysis of business data and procedures. Professionals who are qualified for internal auditing are hired by organizations to analyze and refine all the procedures.

Organizational Independence

Internal auditors hired by organizations are not really independent of the organization, but organizational independence plays a key role in enabling the internal auditor to perform a more unbiased evaluation. An audit committee, which is usually a sub-committee of board of directors, provides the authority and independence to internal auditors and they can only be hired or replaced via an audit committee’s decisions. This allows the internal auditors to perform their role more effectively.

Role Of Internal Auditing

Internal audits are primarily directed at assessing internal control of the organization. The board of

what is an audit

what is an audit

directors, management, and other authoritative personnel are the creators of an organization’s internal control procedures, which is designed to achieve primary objectives for which most organizations aim. Some of the core objectives are:

  • Acquiescence with rules, regulations and laws
  • Conservation of assets
  • Consistency and reporting of financial management
  • Efficacy and efficiency of organizational operations

Internal auditors assess whether the following five critical management components are being used effectively to achieve the organizational goals mentioned above:

  • Activities to monitor growth and profitability
  • Communication and information procedures
  • Risk evaluation
  • Risk- focused managing activities
  • The control environment

Execution Of Internal Audits

A typical and normal internal audit usually consists of the following steps:

  1. Create and convey the scope and purpose of the audit to the respective management authority
  2. Develop an understanding of the business under review, these normally include:
  • Objectives
                • Performance measurement techniques
                • Review of all documents regarding organizational procedures and reporting
                • Review of all the interviews
                • The core transactions of the business
                • Identify the major risks being faced by the business

3. Understand the currently used management practices to ensure each of the risk is adequately controlled and supervised. Internal auditors usually form a checklist to identify and evaluate usual risks in the organization or industry being audited
4. Execute a risk-oriented sampling process to evaluate the highly important management controls and that they are working as they should
5. Reporting the problems and challenges concluded to the management and negotiate action plans and procedures
6. Internal audit departments also maintain a follow up database to identify if the reviewed and refined procedures are working effectively

It is not necessary that an internal audit be performed in the same step-wise procedures as described above; therefore, the time and length of the audit depends on the nature of the processes and organization being audited.

Internal Audit Reporting

At the end of an audit, internal auditors usually summarize their findings, suggestions, and any other plans they have for the management. An audit should at least consist of adequate information on the 5 C’s:

The Condition – What are the issues identified?

The Criteria– What was the benchmark that wasn’t met because of the issue?

The Cause – Why did the organization face the issue?

The Consequence – What is negative result of the problem?

The Corrective action plan– What steps should the management adopt towards eliminating the problem at hand?

The recommendations and advice an internal auditor provides at the end of the report are aimed at fine-tuning the organizational processes or the corrective procedures which can be employed to optimize governance and risk control processes. It is important for the auditor to be aware of the organizational goals and objectives, and the approach should be parallel to the company’s.

How To Know If The Audit Report Is Beneficial?

Simplicity– The technical language used and the terms should be expressed in clear, simple, and straight forward words.

Precision– The information used in the audit and the results should be precise and accurate.

Objectivity– The suggestions, opinions, and observations in the audit should be completely impartial and objective.

Deadlines– The audit report should be presented immediately after the auditor successfully analyzes the information, and it should be presented within the time constraints provided.

Concise– The end report should be concise, brief, and to-the-point.

Benefits Of An Internal Audit

An internal auditor can provide an organization with independent assurance on a wide array of tasks. Their abilities aren’t only limited to tuning financial management procedures.

Most importantly, an internal audit can help identify the risks an organization is exposed to due to their existing management procedures. This not only helps strengthen the management processes but enables the organization to achieve its goals and objectives of profitability and other benchmarks more effectively.

 

Featured Accountant James Sherman CPA | Naperville Illinois Accountant

James-Sherman-CPA

James-Sherman-CPA

Sometimes it is so difficult to find an accountant. Good Accountants, strives to make this process as easy as possible for you. In our featured accountant series, we want to shine light on various public accountants around the nation, for doing such great work. These accountants were selected by the GoodAccountants staff, based on user submission. To continue our featured accountant series – we would like to present to you, James Sherman, a Naperville Illinois Accountant. James Sherman has been in the accounting industry for many years, and has worked with $300 billion dollar conglomerate companies; down to providing professional accounting services for small businesses. His flexibility and wide range of accounting skills, is why James A. Sherman is our newest featured accountant.

James A. Sherman CPA – Featured Naperville Illinois Accountant

James Sherman is located in downtown Naperville, IL and is only thirty minutes southwest of downtown Chicago. He has provided accounting services for small businesses around the greater Chicago area and can help you out today with your accounting needs. Beyond accounting duties, James also provides his clients with Business Consulting, Business Plan Assistance, and Business Valuations. His experience in the industry, makes him a true thought leader and perfect person to reach out to when needing help with your finances or accounting.

 

5 Reasons Why A Business Accountant Is So Important

business accountant

business accountant

When running a business it is quite tempting to cut down on costs and save up by managing the finances yourself. Most business owners do this and sooner or later they realize that it was wrong to do this. Financial aspects and matters of a business are delicate matters and they require a dedicated person to handle them. One person whose sole job is to manage, record, and give advice to the business owner about finances, should be there. It goes without saying that a business accountant is crucial for a business’s success and growth.

Why is a business accountant important?

1. An Accountant Helps Manage Expenses

This is by far the most essential role a business accountant plays. They help owners keep an eye on all the outgoing and overheads. Having a business accountant to do this can help business owners save a lot of time which they can use to work on growth and expansion.

Particularly in the first few months, a business accountant is vital for a business and they help it survive and excel towards maturity.

2. An Accountant Helps Cut Down Costs

Hiring a professional business accountant obviously means you will have to spend a substantial chunk of money. Look at it as an investment in the long term profitability and life of your business. Accountants are aware of the best legal loop holes from which businesses can benefit immensely to cut down on costs. They are also skilled at advising businesses from year-end accounts to tax returns and preparations which can significantly help you save large amounts of money.

If hiring an accountant as a full time employee is difficult for you, you can decide on a pay-for-services model initially, to keep track of how an accountant’s services can possibly excel your

business growth in the long-term.

3. An Accountant Gives Professional Advice

small business accountant

small business accountant

A good business accountant does much more than just keeping records. Knowing your business’s finances to the core, they can offer you valuable advice. Professional business accountants are experts at offering an unbiased and objective view of your business.

A business accountant can serve as an invaluable asset for startups and small business owners by offering the right financial advice that can help you stay in business for the long term.

4. An Accountant Will Save Your Time

Look at all the things an accountant can help you accomplish, and then look at your duties and the time constraints. It is often quite tempting and motivational for business owners to manage their own accounts but it is always advisable to delegate things to reliable specialists if you are serious about your business. This gives you a lot of time which you can spend on other business growth aspects.

5. An Accountant Helps You in Audits and Legal Issues

Getting audited and checked by government authorities is a nightmare for businesses whose accounts are managed by the owners. A professional business accountant will handle all your audit related issues in a better way. Given that they are efficient and well aware of all the records, you don’t have to worry about tax season or audits. Skilled accountants also offer you great advice on legal financial issues.

Finding the best suitable business accountant might seem like a difficult task. Once you do, your business is bound to prosper!

Featured Accountant Nancy J. Williamson | Austin Texas Accountant

nancy j williamson austin texas

nancy j williamson austin texas

For our next segment of Good Accountants, featured accountant post; we would like to extend our congratulations to Nancy J. Williamson. Nancy is a Certified Public Accountant in the Austin, Texas area, where she does amazing work for her clients. Her public accounting skills provide her clients with expert work that truly helps them these businesses grow. Her standout strategic planning, makes her a great local Austin Texas Accountant.

Featured Accountant Nancy Williamson, CPA – Austin Texas Accountant

Some of the areas where Nancy Williamson specializes in are; bank reconciliations, business tax returns, business plans, amended returns, business consulting, and many other services. If you are in Austin, or a surrounding area in Texas, you should reach out to Nancy for accountancy help. We received so much positive feedback from our last two featured accountant posts, so we hope that you enjoy this continued segment on our blog. It’s always great for us, to be able to feature those in our industry that do such great work. Nancy Williamson has been an Austin Texas accountant, for many years, and she plans on continuing to deliver great work for years to come!

For more information on Nancy J Williamson CPA, her company, and to find an Austin Texas accountant; check out her Good Accountants profile.

 

Featured Accountant Susan Haase | South San Francisco Accountant

The Good Accountants Blog Presents our Second Featured Accountant…

Susan Haase,  CPA – Good Accountant in South San Francisco

Susan Haase CPA

Southern San Francisco Public Accountant Susan Haase

Here is our second installment of our featured accountant post! We are proud to present Susan Haase with this honor. Susan prides herself on being more than just a South San Francisco accountant, she is a problem solver. Her passion for giving her clients insightful solutions to their problems is something that isn’t easily replicated. Her team of experts at Peninsula Accounting provide a large range of services for non profit groups, individuals, and businesses alike.

The great thing about working with Susan and the team at Peninsula in South San Francisco California, is that instead of working with a single accountant, Peninsula offers their full team to help better serve you. This offers their clients a wide range of expert knowledge to tackle any problem thrown at them. Coupled with their expert knowledge is many years of experience and attention to detail. This level of attention delivers a one of a kind, close and personal experience that deals with your problems. You can feel confident that at any time, there is always someone who can both help you as well as understanding your business. The alignment of your business goals and Susan Haase’s expertise, offers you a one stop shop for any accounting solution.

If you would like further information about Susan Haase CPA or are in need of a top South San Francisco Accountant, you can view her profile page on Good Accountants.

Featured Accountant Nita Roopchand | Find an accountant in Plantation, Florida

Accountant in Plantation Florida - Nita Roopchand

Without further ado, here is the kick-off post to our newest featured accountant series: Nita Roopchand, CPA, MBA. Nita is an accountant in Plantation, Florida. She practices at a full service accounting firm, which is conveniently located in the Plantation area of Fort Lauderdale in sunny South Florida. It is vital to the success of yourself and your business that you chose the right person to work with. Taxation is a serious thing, that if left unattended or to the wrong person, could prove to have a very negative on your credit score and financial standing.

Good Accountants Presents our Featured Accountant in Plantation, Florida

Along with her great consulting work, Nita is dedicated to helping small businesses with bookkeeping, tax planning, audit services, and more! It is a great service to her community that she provides her services to local businesses and people. Good Accountants, would like to shine a light on the great work Nita has been doing with her firm, and wish her nothing but continued success. To ensure that we continue to highlight the great efforts of these accountant’s, we will continue this as an on-going series. Please be sure to check back soon, to see what new profiles we are going to feature!

For more information on Nita Roopchand CPA, or to find a great accountant in South Florida, visit her Good Accountants profile.

Goodaccountants.com Continues to Offer Tax Payers the Best Accounting Professionals

Suzanne LoBiondo, CPA: Merrick, NY

The online accounting network known as GoodAccountants.com has made it its mission to provide customers with free access to a database of the top accounting professionals in the world. The online accounting network strives to help users find accountants who possess the highest level of skill in order to meet a broad range of business and personal accounting needs. A team of professional business consultants that aid with the process help customers to breathe easy knowing they’re getting the best accountants and tax advisors in the country to attend to their finances.

The accountants featured on this site are screened for personal expertise, level of experience, professional affiliations as well as for their customer service records. All information is kept confidential and there is no obligation to continue working with any accountant that does not appear to be a good match. It has never been easier to find and hire the perfect accountant or financial professional for your business and or personal needs.

Since accountants offer a variety of specialized services it is important to be sure the accountant or accounting firm you select is the best one for your precise needs. From services as basic as filing an individual tax return to more elaborate record keeping and financial management your accountant can make a difference in whether you fail or succeed.

GoodAccountants.com recruits only top accountants to join their national network and is proud to welcome Suzanne LoBiondo, of C&L Tax and Accounting Services LLP, a boutique accounting firm located in Merrick, NY. Suzanne LoBiondo and her firm have many years of experience helping business owners, and provide full service accounting solutions for all size businesses as well as private individuals.

For more information about Suzanne LoBiondo, please log onto GoodAccountants.com or call 1 (800) 505-7861. You’ll be thrilled with the ease of use this free web-based service offers.

Everyone Can Benefit from a Good Accountant – Athletes are no Exception!

Just about everyone can benefit from the skills of a good accountant. Not only do these professionals help with tax time, they also provide plenty of valuable financial information all year long. Unfortunately, many people, including celebrity athletes, do not make use of the best accountants available to them, and end up in dire straits because they simply do not know how to appropriately handle their money.

The article written by Steve Berman “Top 10 Athletes Who Should Have Hired a Good Accountant” details the outcome of poor financial choices. It mentions how professional athletes like Evander Holyfield failing to take time to find a good accountant.

You may have noticed that Holyfield continues to climb into the ring even though he is getting up there in years. All tolled, the four time heavyweight champ has made about $250 million, so one would think he would never have to fight again. Since Holyfield neglected to search for a proper financial expert to help him throughout the years, had eleven children, and made very extravagant purchases, he is actually somewhat cash strapped. In fact, the article states how Holyfield has not been able to pay his bills for the last few years. This has led to lawsuits over back child support, which led to loans to pay for day to day expenses and even more lawsuits over those loans. A good accountant could have managed the fighter’s finances and possibly prevented this type of financial devastation.

Another famous athlete mentioned in the Berman’s article well known for financial trouble is LaTrell Sprewell. After completing his five year, $62 million contract, Sprewell turned down a $21 million extension from the Minnesota Timberwolves. The ball player stated this offer was insulting and after turning down several other lower offers from competing teams, never played again. This series of events led to financial ruin for Sprewell, who ended up losing his yacht, his home, and his automotive business.

As you can see, no one, not even those with multi-million dollar salaries, is exempt from making mistakes when handling their own finances. Taking the time to find a good accountant can help head off problems before they begin, and keep you on the right track to financial success.

Best Accountants Vs. Cheap Accountants

When you’re looking for a business or personal accountant, you’re usually concerned about two very important factors- cost and quality.  Accountants can be expensive so for some it’s difficult finding one that you can afford.  But remember that the best accountants aren’t always the most affordable ones.  This might be one time you don’t want to limit yourself too much on how much you want to spend because sometimes you really do get what you pay for.  Splurging a little bit more on the person or company who is the best accountant for you is probably completely worth the cost.

It’s understandable that you probably don’t want to spend as much as you’d like on an accountant.  After all, you most likely have a budget you need to follow.  The best accountants will help you maximize your spending in all areas though so spending a little more than you’d like on a reliable and knowledgeable accountant may be worth it because of how much they’ll end up saving you in the long run.  Go too “cheap” on your accountant and you could end up costing yourself much more.  A less expensive and therefore usually less experienced accountant may not know all of the ins and outs of your business and may not be aware of all of the ways to save you money.

When it comes to finding the best accountants, sometimes you can find one for cheaper that is still a good, high quality accountant but usually you need to be willing to spend a little more for quality.  Investing in a reputable and knowledgeable accounting firm will never be a bad investment.  After all, every business needs an accountant and if you’re going to invest in one, make sure that they’re going to help you optimize your spending and business costs as much as possible.  Moderately priced accountants are usually the best option and offer you the expertise and affordability that you’re after.