Assignment: Establishing Internal Controls & Government Auditing Standards

Using the fictitious entity created in the assignments for the first two weeks, you will continue to work with that agency for this week. Your fictitious agency has decided to start an internal audit function and hire an auditor. As the budget director of the agency, you need to determine the standards that will guide the auditor's actions. Become familiar with the possible standards and their sources and legal requirements for auditing.

Write a 4- to 5-page paper describing the necessary internal financial and management controls you would like to include for your fictitious entity.

1. Consider the controls to ensure valid financial statements, protect assets, comply with regulations, use resources efficiently, and achieve objectives.

2. Consider the feasibility of such controls. Provide an example and calculate some numbers to facilitate the auditing process to back up your analysis. Evaluate alternative controls.

3. The standards you will need to adopt and evaluate options, including standards by Government Accountability Office (GAO).

4. Include information on what benefits the standards will have on the credibility and responsibility of the auditor. Report on how this audit will impact your budget.