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27 Cards in this Set

  • Front
  • Back
Broad Concept of Accounting
Examining and Evaluating the accounting records, financial statements, operational and managerial issues of an enterprise, and REPORTING on relevant findings and recommendations to concerned parties.
Auditing combines the three functions of: (3)
SCIENCE-based on concepts, theories, and methods.
ART - req's the creation of designing and development of auditing systems, documents, records, plans, flow charts, org charts, ect.
PROFESSION - practiced by thousands of Americans and is regulated by several professional organizations that set its professional and ethical standards, rules and regulations.
Name two types of reporting functions
Internal and External
Name three types of Operating Functions
Financial, Operational, and Mangement
Name ten ways that Internal and External Auditing can be contrasted.
Preformance Responsibility
Preformance Frequency
Nature of Activities
Scope of Activities
Main Concern
Legal Liability
The Auditor's Qualification
Definition of Internal Auditing
An independent apraisal function...established within and EXAMINE & EVALUATE...FINANCIAL, OPERATIONAL, AND MANAGERIAL, activities, and to report the relevant findings to concerned parties.


Financial Internal Auditing
Deals with the appraisal of Rev., Exp., A, L, and Eq.

Operational Internal Auditing
Appraisal of the operational activities, such as: Production, Marketing, Transportation, Financial, Personal.

Management Internal Auditing
Appraisal of management issues, such as:
economic function, org. structure, pref. eff., general policies, executive evaluation.
Five factors that led to the creation of auditing
In. in vol. of acct. transactions.
Inc. in complexity of trans.
Extensive expansion in geo. scope of busi. trans.
Inc. in unethical practices.
Compliance with Fed. Req.'s
Internal auditing functions
Design, develop, implement, organize, prepare plans, implement plans, monitor and control, examine and evaluate, investigate fraud, coordinate auditing activities, report.
Define concept of coordination activities between internal and external auditors.
Periodic meetings
Access to each others audit plans, programs, working papers
Exchange of auditing repts
Understanding of audit techniques, methods, terms.
Internal auditing goals
control the financial, operational and managerial activities
prevent and detect fraud
comply with legal, business, and professional req's.
highlight concerns and alert management.
Importance of Internal Auditing
-Protects the financial interests of the comp
-Protects interests of concerned parties
-guides mangerial decisions
-enhances the operational efficiency.
Qualifications of the Professional Internal Auditor
-social personality
-prof. knowledge
-prof. experience
-prof. ethics
-good communication
-good observation
-sound analytical skills
-ability to express fair opinion
-acquaintance with modern reporting techniques.
Name Two Authorities of the Internal Auditor
Staff Authority - within org. structure of his or her employer.
Line Authority - within internal auditing dept.
Name five responsibilities of the Internal Auditor

Cannot delegate responsibility to subordinates
Define: Goals
Pre-set objectives to be achieved by an enterprise
Define: Plans
Courses of action to be taken by an enterprise in order to schieve its goals.
Define: Programs
A detailed breakdown of the contents of its plans.
Define: Policies
Guidelines that govern the performance of all types of activities performed by an enterprise.
Define: Strategies
Plans, programs, policies and tactics that deal with the competitiveness situation.
Define: Decision Making
The process of taking a course of action by managers in a givin situation.
Define: Directing
The process of having work done through others.
Define: Planning
The process of seleting the best alternative goal, plan, policy, program, or procedure among alternative ones available to managers in a given situation.
Define: Organizing
The process of creating, identifying or modifying the orgnization structure of an enterprise.
Define: Controlling
The process of comparing achieved goals and performances' with planned ones, in order to identify and justify related differences, and also to take corrective measures whenever required.