How to synergize the works of internal auditors and external auditors to listed companies

Joseph K.

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How to synergize the works of internal auditors and external auditors to listed companies

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Themes

Synergize the works of Internal Auditors, auditors, companies, Audit process, accounting procedures

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Abstract

Internal and external auditors have been used over the years to promote transparency and compliance with the accounting procedures in listed companies. The external and internal auditors have had separate duties in the audit process. However, conflicts have been witnessed between the internal and external auditors and this has therefore greatly undermined their effectiveness. Due to this, there has been the need to come up with ways to improve the overall efficiency of the whole process. This research paper explores how to synergize the works of Internal Auditors and External Auditors in listed companies. To achieve the objectives of the research, secondary sources were used to obtain data. The data obtained was analyzed and discussed. Finally a conclusion was made in response to the research question.

Auditing
The roles and responsibilities of internal auditors
Reporting structure of internal audit functions and duties
Roles and responsibilities of external auditors
How internal and external auditors benefit a listed company
Relationship between internal auditors and external auditors
How the internal and external auditors can work together
Internal control
Reporting the financial statements
Fraud and corruption
Risk management
Role of the audit committee

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[...] A constructive relationship between internal and external audit teams can also assist in external audits by encouraging the involvement of the top managers of the business in the process. This will help in making the audit more effective and efficient and will in turn benefit the publicly traded company. It is very beneficial if external auditors and internal auditors meet periodically. This will go a long way in ensuring that they avoid redundancy and duplication of duties. In addition, such meetings allow each party to know the duties and roles performed by another. [...]

[...] Without the external and the internal auditors, the board of directors will not be able to have the need information and insights on how well people within the organization are managing risks. The external and internal auditors add credibility and reliability to reports from the organizations to the share holders. They provide assurance to the listed company shareholders that the members of the management team are able to fulfill their duties (Hake p 45). The internal auditors operate within the governance structures of the organization. As such, they benefit the company by providing assurance on the internal control systems that are in place and thereby helping the organization improve. [...]

[...] The evaluation and examinations of the operation procedures will also be done effectively, independently and objectively (Moeller p. 56) : Roles Of External Auditors External auditors are not employees of the organization where they are carrying out the auditing. The primary interest of external auditors is the determination of whether the existing business activities of a company are consistent with the results in the statement (Moeller p. 56). The external auditors therefore examine the bookkeeping records of the firm so as to determine whether they are consistent with the accepted accounting practices. [...]

[...] & Yiannaka, A ‘Outsourcing of internal audit function: a survey of the UK public and private sector', International Journal of Auditing, Vol.4, pp. 213-226. Stefaniak, C &Cornell,R ‘Social identification and differences in internal and external auditor objectives', American Auditing Association,Vol.5,No pp9-14. Thornton, G 2010, Evaluating the internal and external audit function. the audit committee guide series, John Wiley & Sons, Hoboken.Available form http://mpra.ub.uni-muenchen.de/44954/1/MPRA_paper_44954.pdf William, T. & Parish, J 2009, ‘Co-sourcing: what's in it for me?,' Journal of Accountancy.Available from http://www.journalofaccountancy.com/issues/1999/may/thomas.htm Zaharia,D., Lalar, A. &Tilea, D role of internal audit regarding the corporate governance and current crisis', Social Behavioral Science,pp4819-4823. [...]

[...] It is obvious that it is both beneficial for the internal and external auditor if they corporate in the working process. The internal auditor has more insight into the operations of the company and they can help the external auditor in carrying out the audit. In the same way the external auditor can help the internal auditor in determine the best available internal control strategies that can be used in the organization. In addition to that, both the internal and external auditor can collaborate in coming in carrying out joint audit task that can be beneficial to both the internal audit and external, audit process. [...]

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