Internal audit is an independent and objective activity whose aim is to add value and improve operational
activity of an organisation. Its role comes down to systematic and disciplined evaluation of ...risk management processes, of control and organisational governance. The final effect should be improvement of their activity. The article discusses the first part of research on internal audit functioning in selected units of public finance sector and in entities among the biggest limited companies in Poland. The aim of the article is to present the types of internal audit, to discuss internal audit as an instrument improving management of an entity and to indicate problems of implementing and benefits of its use. The results of the conducted research in the area of implementing and functioning of internal
audit in selected entities indicated that the organization and operating of internal audit in most cases conformed with the relevant law, and the measures adopted generally enabled auditors to act independently. The analysed entities were and still are interested in internal auditing. In their opinion, the implementation of recommendations of an internal auditor improves the efficiency of their activities and the conduction of activities verifying the implementation by an auditor indicates the correctness of his observations. However, the respondents also indicated in some cases low efficiency and effectiveness of audit.
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Since audit has a great importance in preventing, consulting and finding cases of funds misuse, it was thought of analyzing the factors that contribute to increasing the efficiency of internal audit ...in the public sector which would help to set proper and more transparent governance of public financial resources. This study investigated the relationship between effectiveness and contributing factors. The data for the study were collected through an online questionnaire and direct hand-outs of such. The results of the empirical analysis proved that effectiveness has a positive relationship with internal audit quality, the competence of the internal audit team, the independence of internal audit, as well as with the support of internal audit from the management. Moreover, it was confirmed that audit quality is the fundamental element of the effectiveness of internal audit since it was among the most influential factors in the sample.
Purpose
Detecting and preventing fraud are challenging and risky tasks, especially in a fast developing economy such as Nigeria. The efforts become crucial in the government sectors, as they involve ...public’s trust and resources. The purpose of this study is to examine the relationships between the fraud incidence and the elements of fraud triangle theory (FTT) with the aim of combating current fraud outrages in the Nigerian public sector.
Design/methodology/approach
A survey was conducted and 302 questionnaires were distributed to the staff of the departments of accounting, internal auditing and investigation of ten selected ministries, departments and agencies of Kano State, Nigeria. Structural equation modeling (SEM) was used to analyze the data.
Findings
The study reveals a significant relationship between three elements of FTT and fraud incidences in the Nigerian public sectors (p-value < 0.001 for pressure and opportunity and p-value = 0.024 for rationalization).
Practical implications
The findings of the study are useful for forensic accountants and the Nigerian anti-graft bodies to enhance existing control mechanisms in fraud prevention initiatives. The research also contributes to bridge the gap in academic theory and empirical study related to FTT.
Social implications
Fraud scandals can cause public’s frustration, damage the reputation and integrity of the ruling government and result in negative image of the public sector.
Originality/value
Accordingly, the study suggests a salary scale reform (SSR) in the Nigerian public sector and improvement in fringe benefits to increase employees’ standard of living. The study concludes with recommendations to enhance fraud awareness and training programs to the government employees.
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Purpose
The objective of this paper is to analyze how the COBIT framework, integrated within the internal control framework, enables improvement in the quality of financial reporting, while helping ...to reduce or eliminate the material weaknesses (MWs) of internal control over financial reporting (ICFR). The Control Objectives for Information and Related Technology (COBIT) model is a framework for information technology (IT) management and IT governance. It is a supporting toolset that allows managers to bridge the gap between control requirements, technical issues and business risks. Preliminarily, the analysis in this paper illustrates how the COSO framework impacts on the MWs, highlighting strengths and weaknesses. This paper shows how these limits can be overcome with the use of the COBIT framework.
Design/methodology/approach
This is a conceptual paper that aims to highlight the relationship between COBIT and COSO, by illustrating how the IT processes reduce or eliminate the main MW categories.
Findings
The analysis indicates that the implementation of the COBIT framework, or more generally the adoption of effective IT controls, provides important benefits to the entire company or organization. IT control objectives have a direct impact on the IT control weaknesses and indirectly on the other categories of material weaknesses.
Practical implications
The adoption of the framework allows managers to implement effective internal control over financial reporting. In particular, the COBIT approach provides managers with a more evolved tool in terms of compliance with the SOX requirements. This framework also improves the reliability of financial reporting in relation to the requirements of PCAOB's Auditing Standards no. 2 and 5.
Originality/value
The analysis provides an interdisciplinary approach, connecting accounting and information systems themes, and suggest solutions and tools than can help managers to address the internal control weaknesses. This paper addresses an area of relevance to both practitioners and academics and expands existing accounting literature.
The internal audit function (IAF) has taken on a major role in the regulation of corporate governance. In this sense, the quality of financial information is essential in order to supervise the ...reliability of financial reporting. This paper examines whether the structure and characteristics of the IAF affect the quality of financial reporting. An analysis has been made on the internal audit departments of Spanish banks, using a sample of 47 entities. The results show that the financial reporting quality has a positive and significant relationship with some characteristics of IAF quality that contribute to the entities presenting higher quality financial information, namely, qualified and independent internal auditors. / Laauditoríainterna (AI)hacobradoun papeltrascendentalenla regulación sobreelgobiernocorporativo. En este sentido, se le otorga un papel fundamental en la calidad de la información financiera como supervisora de la fiabilidad de la misma. El presente trabajo analiza si la estructura y las características de la AI afectan a las deficiencias de la información contable. Para ello hemos analizado los departamentos de AI de las entidades financieras españolas, utilizando una muestra de 47 entidades, para el periodo 2006-2010. Nuestros resultados muestran que existen unas características de la AI que contribuyen a que la entidad presente menos deficiencias de la información financiera: la formación de los auditores internos y la independencia de la AI.
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497.
REAL ESTATE FRAUD Jiao, Jason
Internal Auditing,
07/2023, Volume:
38, Issue:
4
Trade Publication Article
John was sharing his experience at his company's new real estate agent meeting. "1 In the 1970s, criminologist Donald R. Cressey published a model of the Fraud Triangle, which lists the three ...conditions that must coexist for fraud to occur: pressure, rationalization, and opportunity.2 Jim, the seller, was under the pressure of selling his house at a higher price to settle in Texas. ...for most people, a real estate transaction probably represents one of the most expensive deals in their lifetimes. ...fraud occurs in real estate businesses, and the significant amount of money involved provides an irresistible incentive to abuse opportunities for personal gain.
ABSTRACT Failure of the internal audit function (IAF) to detect a significant deficiency in internal controls is a significant shortcoming in the IAF's work performance. This shortcoming in the IAF's ...work performance reduces external auditors' willingness to rely on the IAF's work. Using a two-stage experiment, we investigate how the implementation of three different internal control testing remediation strategies (akin to CCM, ACL, and periodic manual testing), which vary in their automation and frequency, affect external auditors' perceptions of IAF strength and planned reliance on the IAF's work. We find that automated remediation strategies fully remediate external auditors' perceptions of poor IAF work performance and low degree of reliance on the IAF, whereas manual remediation strategies result in only partial remediation. Counterintuitively, less frequent remediation strategies are more effective at improving perceptions of poor IAF work performance and low levels of reliance on the IAF, relative to continuous remediation strategies.
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A tanulmány az állam gazdaságban betöltött szerepével és annak ellenőrizhetőségével, e tevékenységek utólagos kontrolljával foglalkozik. A cikk középpontjában az állami szerepvállalás hatékonyságának ...mérhetősége, magyarországi jellemzői, aktuális tendenciái állnak, amelyhez szervesen kapcsolódik az átlátható költségvetési gazdálkodás eszménye, az elszámoltathatóság követelménye. A tanulmány bemutatja az állami szerepvállalás helyét, formáit elméleti megközelítésben, majd ennek teljesítménymérésére, ellenőrizhetőségére, kontrolljára vonatkozóan ismertet elméleti javaslatokat, értékes módszertanokat és lehetőségeket. A tanulmány összefoglalja az elmélet és a hazai gyakorlat egymáshoz való viszonyát, és ütközteti a magyarországi többségi állami tulajdonú társaságok körében végzett felmérés eredményeit ezen elméletekkel. A saját felmérés eredményeiből levont gyakorlati következtetések és kritikai észrevételek zárják az írást.