5.

Audit Committee Function : Oversight of the integrity of HP’s financial statements,

disclosures, internal control system, and information security policies, compliance with legal
and regulatory requirements, relationships with the independent public accounting firm and
HP’s internal audit function, risk assessment and risk management, and treasury matters
such as loans, loan guarantees and outsourcings.
Compensations Committee Function : Oversight of HP’s human resources strategies,
workforce management programs, and compensation structures, including HP’s equity
compensation plans, benefits programs, and severance arrangements.

6. Capital Investment Decisions

Capital investment decisions are long-term corporate finance decisions relating to fixed
assets and capital structure. Decisions are based on several inter-related criteria.
The role of financial managers is Financial managers ensure the financial health of an
organization through investment activities and long-term financing strategies.
7. The Differences between internal and external auditors :
a. Internal auditors are company employees, while external auditors work for an outside
audit firm.
b. Internal auditors are hired by the company, while external auditors are appointed by a
shareholder vote.
c. Internal auditors do not have to be CPAs, while a CPA must direct the activities of the
external auditors.
d. Internal auditors are responsible to management, while external auditors are responsible
to the shareholders.
e. Internal auditors can issue their findings in any type of report format, while external
auditors must use specific formats for their audit opinions and management letters.
f. Internal audit reports are used by management, while external audit reports are used by
stakeholders, such as investors, creditors, and lenders.
g. Internal auditors can be used to provide advice and other consulting assistance to
employees, while external auditors are constrained from supporting an audit client too
closely.
h. Internal auditors will examine issues related to company business practices and risks,
while external auditors examine the financial records and issue an opinion regarding the
financial statements of the company.
i. Internal audits are conducted throughout the year, while external auditors conduct a
single annual audit. If a client is publicly-held, external auditors will also provide review
services three times per year
8. A financial audit is conducted to provide an opinion whether "financial statements" (the
information being verified) are stated in accordance with specified criteria. Normally, the
criteria are international accounting standards, although auditors may conduct audits of
financial statements prepared using the cash basis or some other basis of accounting
appropriate for the organisation. In providing an opinion whether financial statements are
fairly stated in accordance with accounting standards, the auditor gathers evidence to
determine whether the statements contain material errors or other misstatements
Compliance audit is an audit done to ascertain the preparation or compliance with the
regulatory guidelines. Regulations can be imposed by government entities, international
standard and best practice setting organization like ISO , particular Industry governing
federations like NASSCOM,INSTITUTE OF CHARTERED ACCOUNTS OF INDIA or others
etc.Independent accountants, security or IT consultants evaluate the strength and
thoroughness of compliance preparations and then accordingly give non conformance
report which needs to be closed on time for obtaining or continuing certification.There also
can be monetary penalty including imprisonment, and nullification of certification to remain
in business etc for noncompliance observed.
Performance audit refers to an independent examination of a program, function, operation
or the management systems and procedures .This is usually applicable for governmental or
non-profit entity to assess whether the entity is achieving economy, efficiency and
effectiveness in the utilization of available resources.