A company may want to hire a member of an external audit team simply for expertise for instance, if an audit manager has worked on a particular engagement for several years, that manager may know more about the operations of the audited entity than anyone else they could hire. Verification if you need credit, loans or investment money, an audit by an independent company, or external audit, lets anyone considering working with you know your bookkeeping is sound and the. A company would want to hire a member of its external audit team for the experience they have if they have been auditing your company for a while they know how the company works and what can be done to improve the internal audit department. Internal audit's independence of executive managements is achieved through its functional reporting line to the chair of the audit committee and an administrative reporting line to the chief executive, as the most senior executive. In a us publicly traded company, an audit committee is an operating committee of the board of directors charged with oversight of financial reporting and disclosure committee members are drawn from members of the company's board of directors, with a chairperson selected from among the committee.
Question #4 why would a company want to hire a member of its external audit team the auditor is familiar with the company the auditor is perceived as being highly motivated and competent with relevant accounting experience management has developed a strong working relationship with the auditor as a result of the audit. Search results for 'why company want to hire a member of external audit team cendant corporation' i want to become a member of papercampcom statement of purpose the decision to pursue my masters in computer science in america is the result of my search for a broader, more flexible, more interactive. Why would a company want to hire a member of its external audit team a company could gain insight into the auditor's process and better devise methods of hiding fraud if the client has hired former auditors, would this affect the independence of the existing external auditors.
Livent inc, the toronto-based producer of broadway shows, recently faced this exact problem when a former professional of its external audit firm joined livent as a member of the financial executive team, and allegedly became enmeshed in a financial reporting fraudalthough there are risks associated with hiring an individual from the external. An external auditor performs an audit, in accordance with specific laws or rules, of the financial statements of a company, government entity, other legal entity, or organization, and is independent of the entity being audited. In some cases, boards and audit committees may not want to ask the questions directly and prefer to ask the chief audit executive or management to include the topics or answers to the questions in the annual audit plan or other presentations to the committee. Having now articulated management's responsibility for internal controls and how internal audit might play a role in assisting management fulfill that responsibility, let's look at some specific benefits that an internal audit function can provide to an organization and its management. A company would want to hire a member of its external audit for a number of reasons the external auditor would have extensive knowledge of how the company works due to analyzing statements and performing many audit procedures and tests on the company and therefore would reduce time in order to become effective as an employee.
Professional served as a member of the audit team, the positions he or she held at the firm and has accepted at the client, the length of time that has elapsed since the professional left the firm, and the circumstances of his or her departure. Firms desiring to hire external audit engagement team mem-bers into accounting oversight positions for example, if a member of a company's audit engagement team is hired by a. Companies often hire external auditors in addition to auditing themselves external auditors are accountants who work independently of a particular company they examine company records and.
The objective of an external audit is to give reliability and credibility to the financial reports that go to shareholders the objective of an internal audit is to educate management and employees about how they can improve business operations and efficiency. During the audit, the outside auditor obtains an understanding of the company's internal controls and then applies auditing procedures, which may include inspection of the company's books and records, observation, inquiries, and confirmations. Why would company want to hire a member of its external audit team independent in light of investments by auditors or their family members in audit clients, employment relationships between auditors or their family members and audit clients, and the scope of services provided by audit firms to their audit clients.
External auditors generally have free reign to examine and assess every aspect of the system whilst management can pinpoint and highlight certain areas they want internal auditors to focus on there are various types of internal audit. A) why would a company want to hire a member of its external audit team a company may want to hire a member of its audit teams for a number of reasons: first the auditor is accustomed with the company, second the auditors usually have experience with a number of financial matters, and lastly management has had the chance to work closely with. A company may want to hire a member of their external auditing team for many reasons: they have experience with how the firm operates, they understand the financial statements, they have been working with other firms and may bring insight into how they operate, they can cut costs on training, they already have connections inside the firm, and. The act states that a company who hires members of its external audit team would be a conflict of interests therefore a public company should not hire a member of its audit team during a one (1) year period preceding the audit.