Audit - Ch1

Front 1

Define:
Broad Concept of Accounting

Back 1

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.

Front 2

Auditing combines the three functions of: (3)

Back 2

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.

Front 3

Name two types of reporting functions

Back 3

Internal and External

Front 4

Name three types of Operating Functions

Back 4

Financial, Operational, and Mangement

Front 5

Name ten ways that Internal and External Auditing can be contrasted.

Back 5

Preformance Responsibility
Preformance Frequency
Nature of Activities
Scope of Activities
Functions
Main Concern
Independence
Reporting
Legal Liability
The Auditor's Qualification

Front 6

Definition of Internal Auditing

Back 6

An independent apraisal function...established within and org...to EXAMINE & EVALUATE...FINANCIAL, OPERATIONAL, AND MANAGERIAL, activities, and to report the relevant findings to concerned parties.

Involves EXAMINATION, EVALUATION, AND REPORTING.

Front 7

Define:

Financial Internal Auditing

Back 7

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

Front 8

Define:

Operational Internal Auditing

Back 8

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

Front 9

Define:

Management Internal Auditing

Back 9

Appraisal of management issues, such as:
economic function, org. structure, pref. eff., general policies, executive evaluation.

Front 10

Five factors that led to the creation of auditing

Back 10

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

Front 11

Internal auditing functions

Back 11

Design, develop, implement, organize, prepare plans, implement plans, monitor and control, examine and evaluate, investigate fraud, coordinate auditing activities, report.

Front 12

Define concept of coordination activities between internal and external auditors.

Back 12

Periodic meetings
Access to each others audit plans, programs, working papers
Exchange of auditing repts
Understanding of audit techniques, methods, terms.

Front 13

Internal auditing goals

Back 13

control the financial, operational and managerial activities
prevent and detect fraud
comply with legal, business, and professional req's.
highlight concerns and alert management.

Front 14

Importance of Internal Auditing

Back 14

-Protects the financial interests of the comp
-Protects interests of concerned parties
-guides mangerial decisions
-enhances the operational efficiency.

Front 15

Qualifications of the Professional Internal Auditor

Back 15

-social personality
-education
-prof. knowledge
-prof. experience
-prof. ethics
-good communication
-good observation
-sound analytical skills
-ability to express fair opinion
-acquaintance with modern reporting techniques.

Front 16

Name Two Authorities of the Internal Auditor

Back 16

Staff Authority - within org. structure of his or her employer.
Line Authority - within internal auditing dept.

Front 17

Name five responsibilities of the Internal Auditor

Back 17

-Internal
-External
-Professional
-Ethical

Cannot delegate responsibility to subordinates
-Legal

Front 18

Define: Goals

Back 18

Pre-set objectives to be achieved by an enterprise

Front 19

Define: Plans

Back 19

Courses of action to be taken by an enterprise in order to schieve its goals.

Front 20

Define: Programs

Back 20

A detailed breakdown of the contents of its plans.

Front 21

Define: Policies

Back 21

Guidelines that govern the performance of all types of activities performed by an enterprise.

Front 22

Define: Strategies

Back 22

Plans, programs, policies and tactics that deal with the competitiveness situation.

Front 23

Define: Decision Making

Back 23

The process of taking a course of action by managers in a givin situation.

Front 24

Define: Directing

Back 24

The process of having work done through others.

Front 25

Define: Planning

Back 25

The process of seleting the best alternative goal, plan, policy, program, or procedure among alternative ones available to managers in a given situation.

Front 26

Define: Organizing

Back 26

The process of creating, identifying or modifying the orgnization structure of an enterprise.

Front 27

Define: Controlling

Back 27

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.