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Activity 1 Research and make a list of financial auditors role and
responsibility.
Role
The Auditor Generals role is to audit the finances and activities for Australian public
sector. In undertaking this task, the Auditor General will scrutinise the public sector
for potential instances of wastage, inefficiency or ineffectiveness, and report his
findings to Parliament.
Reporting directly to the Parliament, the Auditor General is an ally of the people
and Parliament. He must act independently in carrying out all his powers and
duties.
Independence is the cornerstone of public sector audit. The Auditor General must be
free from pressure, influence or interference from any source that may erode that
independence.
Responsibilities
The Auditor General is responsible for:
conducting financial statement, KPI and control audits and issuing audit
opinions for over 200 public sector agencies
little impact upon internal auditors ability to act ethically when presented with a
workplace dilemma. Given five corporate governance support factors, internal
auditors only appear to regard the strength of the external audit function as having
a positive effect on ethical decision making. The existence of an effective audit
committee, a strong organizational code of conduct and high management integrity
do not appear to assist internal auditors to act more ethically when faced with a
dilemma. We also found a significant experience effect in three of the five
scenarios, with more experienced internal auditors adopting a more ethical stance
than less experienced auditors. The results of our study have implications for the
internal audit profession with respect to training and the
provision of support
mechanisms to strengthen the ability of the internal auditor to withstand pressure
when faced with ethical dilemmas. There are a number of limitations of our study.
First, our sample was a self-selected sample drawn from internal auditors attending
a conference. Given that those attending the conference are likely to be highly
motivated members of their profession, and that those responding to the survey are
likely to be those with an interest in ethical issues, the sample may not be
representative of internal auditors in general. Second, the sample comprises mainly
Australian males and thus we are unable to explore the possibility of both gender
and country differences in ethical decision making. Third, our failure to find
significant corporate governance effects may be due to a lack of variability in our
manipulations given the between-subjects design. For example, those in the weak
audit committee treatment group may still have perceived the audit committee to
offer some protection to the internal auditor. Similarly, the weaker code of conduct
treatment may have been perceived as offering some guidance to the internal
auditor.
There are many opportunities for further research in this area. Similar studies can
be undertaken using a broader sample of internal auditors.
The corporate
governance mechanisms examined in this study could be manipulated in a more
extreme manner and different ethical scenarios could be developed. The impact of
other mechanisms such as board independence, CEO/board chair duality, risk
management procedures and whistle-blowing policies could also be explored.
Finally, studies could incorporate other contextual and individual factors such as
national culture, organisational culture, and level of moral development,
organisational commitment and gender.
Methodology
The methodology section of the audit describes the methods, procedures and tests
used to assess the financial data. For example, if the audit sets out to confirm the
company complies with financial reporting laws, the methodology will state which
laws the auditors used as a benchmark and how they tested compliance. Auditors
need to state carefully the methods and tools they use so a third party can assess
their results independently.
Budgets and Financial Statements
A judicious business has a set of budgets and financial statements that allows them
to monitor and measure the financial health of the company through year-end.
Budgets should be put together at the beginning of each year for targeted income
and expenses, then monitored monthly. Four primary financial statements, the
balance sheet, income statement, statement of owners' equity and statement of
cash flows, should be reviewed for accuracy, completeness and compliance with
generally accepted accounting principles.
Transaction Documentation
All financial transactions should be documented in the company's general ledger.
Whether documented in manual form or with an electronic system, each transaction
should be consistently recorded with enough information to identify who created it
and for what purpose. Each should be stamped with the transaction date.
Revenue and Sale Costs
Audit staff should conduct tests of the revenue and cost-of-sales entries in the
general ledger and subsequent financial statements. Sales entries should be
confirmed by proving shipment of products; delivery of services; or percentage-ofcompletion accounting calculations, which allow businesses to record periodic
Bylaws adopted by the board of directors for the benefit of the business and
stakeholders should be documented and reviewed to verify compliance with all
directives. The minutes from corporate meetings should also be reviewed to confirm
appropriate actions have been taken to address any issues discussed during these
meetings.
Confirm Regulatory Compliance
Audits should be performed to confirm compliance with all regulatory agencies that
govern the business. This should include the filing of local, state or federal taxes. It
should also include compliance with agencies that require periodic reporting of
statistics or other actions to reduce physical risks or maintain a financially sound
business environment.
Level of assurance
A review only provides limited assurance (comfort). The reviewer states that they do
not know of anything to suggest your charitys financial report is non-compliant. A
review is a lower level of assurance than an audit. An audit is a direct opinion as to
whether your charitys financial report meets the requirements of the ACNC Act.
Review process
A reviewer will look at your charitys financial statements and accounts but in less
detail than an audit. A reviewer will speak to your charitys staff, including those
responsible for finance and accounting.
an audit firm
Reviewers report
state whether anything has come to their attention that causes them to
believe your charitys financial report does not meet the requirements of the
ACNC Act. If the reviewer believes the report does not meet the Act, they
must:
o
explain why
state any problems in the assistance they received from the charity
when conducting the review, or any issues with the records kept by the
charity as identified above, and
an introduction covering the basics of the engagement and what has been
reviewed