Including Communicating Critical Audit I Have To

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Including Communicating Critical Audit I Have To

My class is Accounting for Healthcare.

The discussion board is

  1. (The Role of the Outside Auditor- Chapter 9) The outside reading entitled, “ Sarbanes-Oxley: Impetus for Enterprise Risk Management by Edward Giniat, and Joseph Saporito, suggest that making SOX compliance a part of a larger enterprise risk management program can help not-for-profits to streamline and coordinate their approach to all risk-be it financial, operational, or strategic. Briefly comment on how this action, if adopted, may impact the auditors internal control letter (management letter) given to the healthcare organizations top management.
  2. (The Role of the Outside Auditor – Chapter 9) Briefly discuss the role of the Public Company Accounting Oversight Board as it applies to not-for-profit organizations and their independent auditors.

I have to Reply to at least two of my classmates (appx. 100 words).

My first classmate Discussion.

1. The impact by applying SOX compliance a part of a larger enterprise risk management program to a non for profit organization would mean putting more effort into protecting the shareholders and the general public from any accounting errors. But with more effort, that means more money being reallocated into those efforts whether it is for administration or background support to apply SOX appropriately. A non for profit organization needs to strategically and resourcefully apply the grants and any type of finances they have to sustain all financials are being put into the most effective places throughout the organization. With specific areas of the organization being covered by various inflow of financials, an accurate system has already been establish to ensure the non for profit standards are at bay for taxation purposes.

2. The Role of the Public Company Accounting Oversight Board (PCAOB) is a non for profit organization created by congress in order to oversee audits of public companies for protection purposes of the investors and/or other public entities. Due to non for profit organizations displaying their financial standings publicly, informative accounting audits then allows the organizations and stakeholders understand how compliant the organization is to secure federal laws.

My second classmate Discussion.

  1. (The Role of the Outside Auditor- Chapter 9) The outside reading entitled, “ Sarbanes-Oxley: Impetus for Enterprise Risk Management by Edward Giniat, and Joseph Saporito, suggest that making SOX compliance a part of a larger enterprise risk management program can help not-for-profits to streamline and coordinate their approach to all risk-be it financial, operational, or strategic. Briefly comment on how this action, if adopted, may impact the auditors internal control letter (management letter) given to the healthcare organizations top management.

Health care is a large industry. It processes many kinds of financial transactions on a daily basis, and proper control of those transactions is essential. In this case, an internal auditor will play a significant role because an integral part of proper accounting procedures rests in issues of control and begins with internal accountability structures. However, sometimes, the internal auditor may be negligent or fail to track errors or fraud. As the book on page 84 mentioned, the internal auditors focus more into errors than individuals. For this reason, the Sarbanes-Oxley Act (SOX) was intended to safeguard the economy since the healthcare industry is such a large and integral part of it. And SOX will consistently have an effect on all healthcare organizations because SOX compliance has considerable flexibility in how they structure their compliance activities. It increases the transparency of organizations’ financial reporting. It also formalizes a system of internal checks and balances. “By improving the integrity of financial reporting, voluntary compliance with the Sarbanes-Oxley Act can help a not-for-profit healthcare organization preserve its reputation within its community” (BlackStratus, 2018). Making SOX compliance a part of a larger enterprise risk management program can help not-for-profits to streamline and coordinate their approach to “all risk-be it financial, operational, or strategic” (BlackStratus, 2018).

  1. (The Role of the Outside Auditor – Chapter 9) Briefly discuss the role of the Public Company Accounting Oversight Board as it applies to not-for-profit organizations and their independent auditors.

The Public Company Accounting Oversight Board (PCAOB), is a private sector, nonprofit corporation created by the Sarbanes-Oxley Act of 2002. Its responsible for the requirement that independent auditors complete a required disclosure called the COSO Opinon, which is an assessment of a company’s internal controls. Even though health care organizations do not issue stocks, they still issue bonds that are registered with the SEC, meaning that the SOX is relevant to many not-for-profit health care providers. It also helps to establish auditing and quality controls. It conducts inspections, investigations, and disciplinary proceedings of registered accounting firms. It also enforces compliance with the SOA. The PCAOB adopted a new auditing standard to enhance the auditor’s report, including communicating critical audit matters and disclosure of auditor’s tenure ( Gill, 2003).