The Tyronco Foundation by The Tyronco Foundation°2013 Internal Auditing Academic

Question

The Tyronco Foundation by The Tyronco Foundation°2013 Internal Auditing Academic Advancement Fund Glenn E. Summers, DBA, CIA Tyronco Foundation operates worldwide to provide food and medicine to needy individuals in third The world countries. Thirteen countries currently receive assistance through the program. The number of individuals that have benefited has increased from 407,000 in 1990 to over 721,000 in 2010. Data for current years is still being tabulated for annual reporting. Contributions are received from foundations, agencies, governments and individuals. Tyronco outsources the marketing and collection processes. The marketing agency publicizes the benefits and collects the donations. The bylaws require that 75% of the funds collected be distributed to directly benefit the needy(benefit expenses). The administration expenses cannot exceed 25% of contributions. The CEO has recently determined that distribution costs should be reclassified from administrative expense to benefit costs since distribution is a benefit to the needy Tyronco's marketing efforts highlight the guaranteed high percent payoff to the needy. The governing agencies of several countries require that the attest auditors include the 75% goal in the financial audit. Background Information The results of your preliminary work are outlined below: Board-Audit Committee: The 13 board members are prominent celebrities, politicians, and business people. Bernie Lay serves as both the Chairman of the Board and CEO. Bernie was the CFO for five years before being appointed as the CEO. The board members are selected by the Chairman of the Board and approved by a majority of the Board. The five-member audit committee includes the Chairman of the Board and four members appointed by the Chairman for a three-year term. The Board also includes a nominating c risk committee and a compensation committee. ommittee, a The Board and the subcommittees meet for one day each quarter. The CFO is responsible for t and financial reports. The Chief Audit Executive (CAE) and the external audit partner share a one-hour slot on the agenda at each meeting. he agenda Chief Executive Officer: The CEO, Bernie Lay, has a military background and has established an autocratic management style. He feels that this approach will develop a more efficient and effective structure for a decentralized organization. Chief Financial Officer Scott Z. Best, the CFO, previously served as the supervisor of accounts payable and was promoted by the CEO. He was the manager in charge of the Tyronco account when he worked for the attest auditors. He maintains a good working relationship with Temple and Duncan, a small regional firm in Geneva.

Explanation / Answer

five major areas of concern as an internal auditor related to tyronco are-

1) CORRUPT PRACTICES

2) INDEPENDENCE OF AUDIT GROUP

3) TONE AT THE TOP

4) SEGREGATION OF DUTIES

5) SAFETY OF PURCHASING AGENTS IN FOREIGN COUNTRIES.

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