Internal and Public Auditing: Accounting Assignment

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Complete 1-12 (p. 25). Remember to complete all parts of the problems. Do not forget to
show the necessary steps and explain how you attained that outcome.
Spacecraft, Inc., is a large corporation that is audited regularly by a public accounting
firm but also maintains an internal auditing staff. Explain briefly how the relationship of
the public accounting firm to Spacecraft differs from the relationship of the internal
auditing staff to Spacecraft.
The main goal of internal auditors is to examine and evaluate the efficiency of business
operations within the organization which they are employed. The internal auditors at
Spacecraft, Inc. are employees of Spacecraft, Inc. and are still required to follow all rules
– including the possibility of manipulation by upper management or department heads to
make improper accounting alterations (Whittington & Pany, 2010).
A public accounting firm is a liberated entity from Spacecraft, Inc. which places them in a
position that cannot be controlled by corporate management. The primary focus of a
public accounting firm is to assess the impartiality of Spacecraft, Inc.’s financial
information. As Whittington & Pany (2010) state, “the fairness of reported earnings
became of prime importance” (p. 8).
References
Whittington, O. R. & Pany, K. (2010). Principles of auditing & other assurance
services (17 ed.). Boston, MA: McGraw-Hill Irwin.