Financial Auditing for Internal Auditors
Financial auditing is key for an organization and its earnings, as it boosts its productivity. Conducting financial internal audits on a regular basis allows the organization to identify some aspects of the business units that have to be addressed. The results of the internal audit will also determine whether the company’s financial statements are accurate, complete, and compliant with the established regulations, which is critical for the organization to avoid fines if publicly traded.
The Securities and Exchange Commission filed 760 total enforcement actions in fiscal year 2022, a 9 percent increase over the prior year, totaling 6.439 billion dollars in fines. Is your organization prepared to pay fines?
In this course, participants will learn how key business processes relate to financial statements, as well as the impact of technology on financial auditing. The course will walk participants through an analysis of an organization’s financial statements using scenarios, where participants will calculate key ratios and analyze trends over time. By engaging in discussions on both historic and current fraud cases, participants will learn how to recognize key “red flags” in financial statement reporting.
Who will benefit from this course?
By exploring concepts that go beyond basic financial auditing, this course enables participants to have additional understanding of the approaches used in financial auditing. This course is intended for internal auditors and audit managers who want to understand and expand their knowledge related to financial reporting.
Course Objectives
- Understand key accounting terms, accounting rules, equations, and basic principles.
- Demonstrate how journal entries are used for accounting purposes.
- Discuss the Financial Accounting Standards Board’s GAAP hierarchy according to FASB Statement No. 162.
- Review the characteristics of key financial statements.
- Calculate key ratios from a company’s financial statements.
- Differentiate between management-level reporting and consolidated financial statement-level reporting.
- Analyze data using horizontal and vertical analysis.
- Describe revenue process activities and associated rules.
- Practice using a risk assessment template to analyze risks, and design, and test controls.
- Identify the basic elements of accounting fraud.
- Discuss how Enterprise Resource Planning (ERP) supports and automates business processes.
- Identify audit techniques to use in performing an application review of a financial audit.
Course Topics
Accounting and Auditing Review
- Define key accounting terms.
- Understand accounting rules, equations, and basic principles.
- Demonstrate how journal entries are used for accounting purposes.
- Discuss the Financial Accounting Standards Board’s (FASB’s) GAAP hierarchy according to FASB Statement No. 162.
- Perform a risk assessment using the financial auditing process.
- Evaluate controls in the audit process by using finance-related management assertions.
- Review an IIA Practice Guide about formulating and expressing internal audit opinions.
Financial Statements – Overview
- Review the characteristics of key financial statements.
- Recognize the flow of information from source documents to financial statements.
- Identify the components of a financial balance sheet.
- Distinguish where in an income statement financial accounts should appear.
- Calculate key ratios from a company’s financial statements.
Business Processes and Accounting
- Differentiate between management-level reporting and consolidated financial statement-level reporting.
- Analyze data using horizontal and vertical analysis.
- Describe revenue process activities and associated rules.
- Describe procurement process activities and associated rules.
- Describe fixed asset process activities and associated rules.
- Recall key revenue, liability, and inventory-related ratios.
- Practice using a risk assessment template to analyze risks, and design and test controls.
Recipe for Cooking the Books
- Identify the basic elements of an accounting scandal (fraud).
- Discuss the five most common financial “games.”
- Calculate financial indices to use in analyzing data.
Technology and Accounting
- Discuss the risks and control breakdowns of User-developed Applications (UDAs) and best practices for controls over UDAs.
- Describe how to minimize risk and limit exposure in using spreadsheets.
- Discuss how Enterprise Resource Planning (ERP) supports and automates business processes.
- Identify audit techniques to use in performing an application review of a financial audit.
Summary Info
NASBA Knowledge Level: Basic
NASBA Field of Study: Auditing
Competency Level: General Awareness
Prerequisites: None
Advance Preparation: None
Topic(s): Audit Methodology
Location: The venue will be decided prior to the course date
