Internal Auditing Essay Example | Topics and Well Written Essays - 750 words

Internal Auditing - Essay Example Beyond the intent to commit a fraud intentionally to mislead shareholders and investors, accountants and top executives of a company can sometimes commit unintentional mistakes through a wrong interpretation of an accounting rule. This is why it is terribly important that auditors, accountants, chief executive officers and chief finance officers set the tone for an ethical working environment from start. There are many ways to commit wrongdoing in the accounting profession and the line between what is perfectly legal and an action that borders on the illegal is a very thin one. It is easy to cross over to the illegal side. In relation to this paper, accounting frauds are committed mostly by top executives of a company since they have access to the records and have a good view of how to manipulate the figures to suit their objectives to the detriment of stockholders. In other words, those in positions of trust and least suspected are the ones who commit fraud and it takes an average of two years before a crime is uncovered, sometimes accidentally only. An alarming 9% only of all frauds are discovered by external auditors (who are very good in forensic auditing), 20% discovered by accident and 46% uncovered due to tips given by the whistle blowers. The remainder of accounting frauds goes undetected, perhaps forever. Accountants are required by their professional associations to undertake continuing professional education (CPE) units to retain and renew their licenses. One of the subjects in CPE is a module on accounting ethics. The two most common problematic situations which accountants and auditors frequently encounter during the course of their work are conflict of interest and confidentiality of privileged information. This was what Cynthia Cooper had been dealing with since she was both a certified public accountant (CPA) and the certified internal auditor (CIA) of WorldCom. Her