Companies today must ensure that operational processes
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Companies today must ensure that operational processes are performing efficiently and effectively in compliance with current regulations. Accountants must adhere to domestic standards set by organizations—such as the Public Company Accounting Oversight Board and the Financial Accounting and Standards Board—as well as global standards, such as the International Financial Reporting Standards, requiring appropriate implementation and assessment of internal controls.
Whether developing appropriate processes internally or preparing substantive testing, external auditors must be able to quickly and completely assess the financial processes, determine weaknesses, and provide recommendations for improvement.
The ability to transcribe formalized or narrative processes into functional workflows allows an auditor to identify potential gaps in accounting systems. These gaps can result in material audit findings necessitating changes in the company’s control structure. However, it is not only the process and flow of transactions that requires scrutiny. Companies evolve into sophisticated, computerized systems that require an in-depth understanding of administrative rights, electronic process flows, and end user reporting.
In this case study, you will apply all of these skills in developing recommendations for Trinity Industries. Though the Sarbanes–Oxley Act of 2002 (SOX) promulgated many internal control structure changes, the company is unsure as to whether they are applying too few or too many internal controls. Unnecessary controls place added burden on staff and cost the company thousands of dollars in monitoring and maintenance.
For Milestone One, prepare an overview of Trinity Industries. Provide an overview of the company and its market industry. Include background, key market demographics,...