Standard-setters believe high-quality internal audit functions (IAFs) serve as a key resource to audit committees for monitoring senior management. However, regulators do not enforce IAF quality or ...require disclosures relating to IAF quality, which is in stark contrast to regulatory requirements placed on boards, audit committees, and external auditors. Using proprietary data, I find that a composite measure of IAF quality is negatively associated with the likelihood of management misconduct even after controlling for board, audit committee, and external auditor quality. This result is robust to a variety of other specifications, including controlling for internal control quality and separate estimation during the pre- and post-SOX time periods. A difference-in-differences analysis indicates that misconduct firms have low IAF quality and competence during misconduct years and improve IAF quality and competence in the post-misconduct years. These findings suggest that regulators, audit committees, and other stakeholders should consider ways to improve IAF quality.
Internal auditing is an important part of the ISO/IEC 17025:2017 standard. Clause 8.8 of the ISO/IEC 17025:2017 standard describes the requirements that the testing and calibration laboratories need ...to follow in the area of internal auditing. However, the standard does not describe which technique to use when conducting internal audits and the ISO 19011:2018 standard (Guidelines for Auditing Management Systems) only mentions the audit methods that can be used by an auditor, lacking practical aspects. Based on the internal auditing technique used, non-conformities that are present may or may not be detected. For example, technical competency of an analyst cannot be completely ascertained by just thoroughly reviewing the related documents such as training records. Therefore, it is important that internal auditors utilize appropriate techniques during an internal audit for it to be an effective one. Different internal auditors use different techniques during the audit. The commonest way internal auditors use is to develop a checklist (usually the one used by the accreditation body to which the laboratory is affiliated) for auditing the compliance to the ISO/IEC 17025:2017 management system and witnessing the technical competence of the technical staff. The aim of this article is to share the techniques utilized by the author during the internal auditing of ISO/IEC 17025:2017 accredited testing laboratories.
Abstract What ethical challenges do internal auditors (IAs) encounter in their professional role, and how do they navigate these hurdles, especially when weaving risks into their ethical judgments? ...Anchored in philosophical concepts distinguishing norms from values, and the notion that risk is intrinsically moral, this research delves into interviews of 33 Canadian public sector IAs across various government strata. This primary data are enriched by insights from archival documents and an ethics training session attended by 11 internal audit executives. Our analysis reveals two primary ethical challenges faced by IAs—ethical issues and dilemmas—which unfold in the various contexts we explicate in this study. To address them, IAs tend to favor axiological logic (values driven) over deontological logic (norms driven). However, in some situations, a prudential logic centered on risk becomes their touchstone. Our key takeaways are threefold: (1) a highlight of the ethical quandaries IAs grapple with; (2) evidence that prudential logic, with its merits and flaws, is used to bridge the gap that sometimes exists between professional norms and individual values; and (3) an emphasis on the weak reliance of IAs on the Institute of Internal Auditors Code of Ethics, hinting at avenues for its enhanced outreach and pedagogy.
In light of the growing importance of internal audit functions (IAF) and the limited archival evidence on internal audit quality, we examine an interactive model of IAF quality (comprised of ...competence and independence) to better understand the determinants of IAF effectiveness as a financial reporting monitor. Our tests support the hypothesis that the joint presence of competence and independence is a necessary antecedent to effective IAF financial reporting monitoring. In sum, our results show that, the answer to "what is the effect of internal audit competence (independence) on financial reporting quality?" is "it depends on the independence (competence) of the internal auditor." Our study extends the understanding of IAF quality determinants in the realm of financial reporting as it relates to ongoing discussions by researchers, standard setters, regulators, and practitioners.
Internal auditing (IA) has become an indispensable control mechanism in both public and private organisations. Yet very few academic studies have been conducted on the effectiveness of IA. The ...current exploratory study aims to build a conceptual understanding of the effectiveness of IA in organisations. Towards this end it develops a scale to measure the effectiveness of IA and a model of its determinants. One hundred and eight Israeli organisations that employ IA participated in the study (a 37% response rate). Data on the effectiveness of IA were collected from the organisations’ general managers and data on the determinants from their internal auditors. The findings reveal good psychometric properties for the scale developed in this study. The correlation and regression analyses show support from top management to be the main determinant of IA effectiveness, with some effect also found for the organisational independence of IA. The effect of the predictors was consistent between the public and private sectors. The research model explained a large amount of variance of IA effectiveness. The findings are discussed in terms of how they can help guide and encourage the continuation of research on this issue.
Over the years, many organisations adopted several types of Three Lines models for optimising risk management coordination and control. According to these models, first line risk ownership is ...required for routinely applying risk management in all of the organisation’s activities, which seems highly underdeveloped. From an exploratory and development research, which builds on conventional risk management approaches, three pragmatic suggestions are derived: (1) simplifying risk management by asking three specific OUD-questions about Objectives, Uncertainties and what to Do, (2) clarification of objectives at all organisational levels, and (3) connecting responsibility for objectives to risk responsibility. Routinely applying these suggestions by second line controllers and third line internal auditors may support first line risk ownership.
Šiuo tyrimu siekiama pateikti išsamią vidaus audito funkcijos charakteristikų ir vietos valdžios institucijų administravimo veiklos Indonezijoje analizę. Tyrime naudoti oficialūs antriniai duomenys ...iš Indonezijos valstybinių reguliavimo institucijų, kuriose generuojami nesubalansuoti duomenys su 5038 stebėjimais, analizuotais taikant duomenų regresijos metodą. Analizė atskleidė, kad Indonezijoje nuo 2015 m. daugumoje regionų buvo pasiekta aukšto lygio administravimo rezultatų, o kai kuriuose regionuose (vietos savivaldos lygmeniu, taikant veiklos auditą) Javoje ir Balyje tie rezultatai buvo aukštesni, palyginti su Borneo, Sumatros, Sulavesio ir Rytų Indonezijos regionais. Taip pat darbe atskleidžiama, kad vidaus audito funkcijų pajėgumai, branda ir kompetencija teigiamai veikia vietos valdžios institucijų administravimo veiklą Indonezijoje. Tinkamos vidaus audito charakteristikos yra būtinos optimizuojant vietos valdymo priežiūrą, siekiant geresnio administravimo. Taip pat siūloma už vidaus audito įgyvendinimo plėtrą atsakingai Indonezijos Finansų ir plėtros priežiūros agentūrai (BPKP) tinkamai įgyvendinti nuolatinės plėtros programas. Tinkamas žmogiškųjų išteklių paskirstymas ir technologijų naudojimas yra būtini, kad administravimo priežiūra būtų kokybiškesnė ir užtikrintų viešąją atskaitomybę.
SUMMARY
The auditing landscape has changed dramatically in the last 20 years due to new standards, improved technology, internal shared services centers, and more. These institutional advances have ...altered the responsibilities of novice auditors. However, our knowledge of novice auditor task responsibilities and experiences has not been systematically updated in the 21st century. This study provides empirical evidence on the tasks and experiences of novice auditors by reporting survey responses from 104 audit interns, more than 30 intern supervisors, and 89 staff auditors. Our results shed light on the evolution of the roles of novice auditors by documenting the significant number and variety of tasks that they perform, as well as the interpersonal interactions, formal training, and other activities they commonly experience.
Data Availbility: Please contact the authors.
Metodos Se realizo una encuesta de auditoria interna en un hospital de atencion terciaria en Finlandia de 2013 a 2018. Las enfermeras de control de infecciones observaron las practicas de higiene de ...las manos segun la estrategia de la Organizacion Mundial de la Salud para la higiene de las manos. Se estimo que el cumplimiento de la higiene de las manos equivalia a dividir el numero de las observaciones en las que era necesario practicar la higiene de las manos por el numero total de observaciones en las que se requeria la higiene de las manos. Se determino la incidencia de las infecciones relacionadas con la atencion medica mediante un programa semiautomatizado y electronico de vigilancia de la incidencia. Se calculo la correlacion de Pearson (r) para evaluar la relacion entre la incidencia de las infecciones relacionadas con la atencion medica y el cumplimiento de la higiene de las manos. phrase omitted
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