Key Elements of Audits for Accounting Majors
Accounting majors take heed: recent federal reporting regulations affecting America's businesses have fueled job opportunities for those with auditing skills. Enacted as a response to corporate boardroom scandals, the Sarbanes-Oxley Act of 2002 now requires tough, new reporting requirements for all public companies.
The act created the Public Company Accounting Oversight Board, charged with oversight of accounting firms and requiring independent external audits of companies throughout the land. As a result, there are thousands more jobs for accounting program graduates to assist or direct independent, impartial audits of company books.
According to Bea Sanders of the American Institute of Certified Public Accountants, U.S. public companies are "looking to external auditors to help them" comply with the new standards.
If you're enrolled in an accounting degree program, you may want to take courses that focus on internal auditing procedures for publicly traded companies to examine an organization's information systems, management procedures, and financial record-keeping controls.
Internal audits especially examine potential fraud, financial reporting methodology, the safeguarding of assets and regulatory compliance.
Here are some key elements involved in performing an audit:
Audit Scope and Objectives
You'll be asked to assess the length of audit, the key elements for the examination, the process required for gathering and assessing data, and the regulatory requirements of the audit.
Identify Business Area
Which segment or sectors of the business are under review? You'll determine key stakeholders to interview and which specific records are under examination. Identify transactions to evaluate.
Establish Controls and Tests
Identify and establish monitoring procedure and policies for gathering and evaluating transactions. Complete risk sampling to assess validity of monitoring procedure.
Generate and File Reports
Gather findings into a detailed assessment of practices and procedures, identifying problem areas and recommending immediate actions to assist management in remedying them.
External, independent audits have now become a critical, commonplace procedure in American corporate life. Getting your degree with a specialization in the process can improve your career opportunities.