Just as financial statement auditing varies by industry, so too does internal auditing, in part because the risks vary from industry to industry. For example, the risks related to accounting estimates are quite different in the airline industry (i.e., frequent-flier liabilities), the construction industry (i.e., percentage of completion), and the health care industry (i.e., third-party reimbursements). However, although the professional literature is replete with guidance about financial statement audits in several major industries— for example, the AICPA's Audit and Accounting Guides—the literature is less forthcoming about industry-specific operational auditing.

Required: 

Select an AICPA Audit and Accounting Guide for an industry that interests you (e.g., airlines, casinos, construction contractors, finance companies, property and liability insurance companies, providers of health care) and a recent annual report for a publicly traded company within the industry. Draft a report that:

1. Discusses how a public accounting firm could use the company's internal audit department to accomplish the audit of audit-and-accounting issues identified within the Audit Guide.

2. Discusses the company's internal audit department using information accessed from:

a. The company's World Wide Web home page,

b. The company directly (a mailing address and telephone number are typically included in an annual report).