Opportunities for the Coordination of the Activities of the Internal Auditor and the Independent Public Accountant
by HOMER E. SAYAD Partner, Saint Louis Office
Presented before the Public Utilities Group at the 32nd Annual International Conference of the Financial
Executives Institute, Boston — October 1963
ANY DISCUSSION of opportunities for coördination of the activities of the internal auditor and the independent Certified Public Accountant
should commence with a clear definition of their objectives and responsibilities in the area of business management. For the rest of this paper I shall refer to the independent Certified Public Accountant
simply as "independent accountant" and shall restrict the discussion
to his role in the examination of financial statements. His activities in the fields of taxes and management advisory services are not germane to this discussion, except as may be noted later.
OBJECTIVES AND RESPONSIBILITIES
Both the independent accountant and the internal auditor make audits or examinations of the financial data of a business enterprise. Their objectives, however, are different. The Codification of Statements
on Auditing Procedures published by the American Institute of Certified Public Accountants has this to say about the purpose of the examination by the independent accountant:
The primary purpose of an examination of financial statements by an independent Certified Public Accountant is to enable him to express an opinion as to the fairness of the statements, their compliance with generally accepted accounting principles, and the consistency of the application of those principles with that of the preceding period.
His examination must be carried out in accordance with well-defined guidelines and standards prescribed by the accounting profession.
The financial statements on which the independent accountant expresses his opinion may be used for reporting to shareholders, granting of credit, reporting to the Securities and Exchange Commission
or other regulatory bodies, or for any number of other business purposes.
The purpose of an examination by the internal auditor is to assure