The out of control accounting system used by Applebye Downs must be corrected to prevent any number of occurrences that would infringe not only on the ability of the organization to remain profitable but also to remain in business. The recommendation is to consider hiring an internal auditor in an effort to prevent or lessen the impact of inquiries from governmental bodies regarding financial statements. The auditor would make concerted efforts to improve the accounting system with the organization primarily through a renewed focus on what is needed or expected to remain and or to become in compliance with the latest governmental regulations. Among the benefits that an internal auditor would offer the organization would be the ability to determine if there have been activities of fraud, internal waste and would be able to ascertain whether the organizations internal controls needed and improvements.
An internal auditor on staff would also mean the organization would have a wide range of audit types at their disposal. Some of the more frequently used audits include financial statement audits, fraud audits, operational audits and perhaps most important is the compliance audit.
The financial statement audit would be important to the organization because it adds credibility to the financial performance and position of the business and is required by the Securities and Exchange Commission for any publicly traded company (“Accounting Tools,” n.d.). According to Mancino (1197) the auditor would be required to report fraud in all types of audit procedures. In light of the organizations current issues, the greatest benefit would occur from an operational audit because this includes a review of how an organizations management and operating procedures are functioning with respect to their effectiveness and efficiency in meeting the objectives of the organization