The paper investigates whether a supportive control environment is associated with the internal audit effectiveness and what characteristics of a control environment are important in this respect. A ...survey was conducted via a questionnaire on 54 mostly large companies in Croatia. Appropriate methods of statistical analysis were used in order to analyse the survey results. According to the research results, in the case of a supportive control environment there is a greater chance that the internal audit will be effective and that its recommendations will be taken into account to a greater extent. In addition, the survey results showed a statistically significant correlation between perceived internal audit effectiveness and a higher level of supportive control environment.
The intent of this study is to show why the internal audit function is the ideal source of executive talent in the organization. Using the Old Institutional Economics (OIE) component of institutional ...theory as a theoretical lens, this paper examines the impact of this management accounting change as a management accounting innovation in eight organizations. This research inquiry confirms prior research that the internal audit function can provide candidates with a robust set of skills and competencies that allow them to assume a multitude of different roles of increasing responsibility, while managing the conflict that arises (or potential conflict that may arise). Further, this study contributes to the literature by illustrating that management accounting changes can be influenced by external factors such as regulation, which have the propensity to create organizational change. Secondly, the organization's response to this change can be used as a way to institutionalize new practices and routines. Lastly, this study highlights the competencies that internal auditors possess that make them ideal candidates for executive leadership positions.
Purpose
– The purpose of this paper is to analyse and comment on recent enhanced pronouncements on internal auditing.
Design/methodology/approach
– The paper uses content analysis of five 2012-2013 ...sources of guidance, set out in the tables of this paper and summarised within the text, together with conceptual interpretations.
Findings
– Recent pronouncements respond, with considerable consensus, to stakeholder and public concerns and fill a partial vacuum left by The Institute of Internal Auditors' Standards. Principally this is about successfully enhancing the scope of internal audit and internal audit's independence from management.
Research limitations/implications
– While the paper is conceptual rather than empirical, it builds on the processes followed by the parties who developed the examples of enhanced guidance reviewed in this paper. Those processes included careful development by leaders in the field, public consultation of preliminary proposals, and final amended guidance based on feedback received.
Practical implications
– There are implications for staffing of internal audit functions and the seniority and calibre of chief audit executives.
Originality/value
– There has been no other attempt to map these developments. It has been done with a view to identifying possible ways forward for internal auditing, especially those which have a high degree of support and which are still to be incorporated into generally accepted internal auditing.
Celem rozważań jest przedstawienie audytu wewnętrznego jako narzędzia innowacyjnego, wspomagającego zarządzanie jednostką, w aspekcie nowych uregulowań prawnych wprowadzonych do sektora finansów ...publicznych. Na podstawie przyjętej praktyki w jednostkach samorządu terytorialnego, na przykładzie powiatu wałeckiego, w odpowiedzi na uregulowania prawne zawarte w ustawie o finansach publicznych dotyczące zakresu kontroli zarządczej i audytu wewnętrznego, zastosowaną metodą badawczą jest przegląd literatury oraz analiza wzajemnych powiązań i zależności. Audyt wewnętrzny miał posłużyć jako narzędzie innowacyjne w zarządzaniu jednostką samorządu terytorialnego, w związku z tym konieczna była zmiana jakościowa w sposobie podejścia do systemu organizacji i funkcjonowania administracji publicznej. Dotychczas w modelu administracji publicznej obowiązywało klasyczne ujęcie audytu wewnętrznego. Klasyfikowało to administrację państwową, w tym samorządową wyłącznie do władczego rozstrzygania o prawach i obowiązkach obywateli. Model ten zdezaktualizował się, tworząc tym samym nową jakość w pożądanych zmianach w procesie zarządzania jednostką. W artykule wskazano narzędzia w postaci informacji pochodzących z różnych źródeł dających przybliżony obraz funkcjonowania jednostki jej kierownikowi. Opisano sankcje prawne w przypadku nieprzestrzegania ustawy o finansach publicznych w zakresie prowadzenia audytu wewnętrznego. Zwrócono szczególną uwagę na rozwiązania zastosowane w powiecie wałeckim, mające na celu monitorowanie stopnia realizacji założonych celów, w związku z czym przedstawiono część prowadzonej dokumentacji w jednostce. Podniesiono rangę audytu wewnętrznego, który jako niezależne i obiektywne ciało doradcze kierownika jednostki, spełnia rolę narzędzia innowacyjnego w zarządzaniu jednostką. Artykuł ma charakter studium przypadku.
Scholars have suggested that corruption could serve as a substitute for property-protecting institutions in developing countries, but very few empirical studies have been conducted to test this ...theory. Most existing studies on the determinants of corruption are cross-national, rely on perception-based measures, and focus on economic development, regime type, and market structure as explanatory variables. Little is known about why corruption occurs in an authoritarian state at the micro level. We theorize bribery as a bargaining process between a firm and a rent-maximizing public official, and we assume that graft-paying firms face different sets of rules and regulations, which govern firms' costs and benefits of bribing. We test the hypothesis that firms' bribes are determined by the rigor of their internal auditing control and the quality of property-protecting institutions. We use entertainment and travel costs directly observed in a large-scale firm-level survey in China as a proxy for corruption. Our study implies that firms operating in a weak property rights regime rely on political connections as a substitute for formal legal protection. The findings shed light on the literature on property rights, corruption, and East Asian development.
This study examines the effect that client size has on the relation between industry-specialist auditors and fraudulent financial reporting. Most of the major accounting firms have organized their ...audit practices along industry lines, reflecting a belief that industry specialization leads to higher quality audits. Furthermore, regulatory bodies and extant research suggests that larger clients have greater bargaining power and are more likely to be able to convince the auditor to acquiesce to aggressive accounting. Also, it may be more difficult for an auditor to possess industry expertise for larger clients who are likely to be more complex and operate in more than one industry. Consistent with previous research, we generally find a significant negative relation between auditor industry specialization and client financial fraud. Also, as expected, the negative relation between auditor industry specialization and financial fraud is weaker for larger clients. This study provides evidence that the positive benefits of auditor industry specialization in deterring financial fraud is affected by client size.
Purpose - The paper aims to report research into ways by which companies identify risks and embed risk management and control procedures and also to report on interactions between internal audit and ...audit committees and their contributions to risk management.Design methodology approach - The first section of the paper comprises a review of the literature on risk management and the roles played by internal audit and audit committees. The paper then reports the results of a series of interviews with officers in UK plcs and external auditors on the issues identified from the literature.Findings - There was agreement that, while parent boards have ultimate responsibility, the ownership of risks must reside with management at lower levels. Companies tended to adopt a multi-procedural approach to developing consistent risk management procedures. Internal auditors were believed to have a role to play but concerns were expressed about expertise and independence. The paper recommends a split of the internal audit and risk management functions to preserve internal audit independence and clarify internal audit roles. Audit committees are increasingly involved in risk management but there are doubts as to whether they have the time and expertise to undertake more than high level risk reviews. The paper, therefore, recommends that separate risk committees should be established to direct risk management, with audit committees adopting a watching brief over the process.Originality value - The Turnbull Report emerged against a background of growing demand for assurance on risk management and control effectiveness and the approach adopted has been endorsed by the Turnbull Review Group. This paper is a timely evaluation of the work being done by UK plcs in this area and indicates that there are issues to be resolved before risk management is fully embedded in company operations.
The purpose of this article is to identify the actual features of the internal audit activities performed by Romanian auditors, respectively the frequency of the internal audit missions, the criteria ...based on which internal audit missions are planned, the objectives of internal audit missions, the relationship of the internal auditor with the company's management and with the members of the audited departments, as well as the present role of internal audit in local companies and in the future evolution of internal audit. The results of the research show that the evaluation of the risks of the audited company is the main criterion that internal auditors use in planning their activity, and the highest weight in the total internal auditors' activities is that of risk monitoring and evaluation, followed by the verification of the accounting processes and by drawing the financial statements. Also, all respondents agree to a great extent that the internal auditor's main role is to formulate recommendations in order to enhance the company's efficiency and that internal audit supports the reporting of information on the companies' social responsibility. In what concerns the future evolution of internal audit, the main tendencies in the field are improving the skills that the internal auditors must have and a focus on increasing the efficiency of risk management.
Non communicable chronic diseases (including respiratory ones) are the leading cause of death and disability. To cope with them we need to redesign the health system, improving primary prevention, ...screening, and outpatient services, while fully integrating different branches of the health service. The Italian Ministry of Health published extended guidelines on integrated COPD management (COPD-GL) in 2010. In2011 a condensed version was produced. These documents define appropriateness of management regarding both the specialist and the health service.
An internal audit on how clinical practice conforms to COPD-GL standards was implemented in one Italian region involving 29 respiratory units (RU) (65.8% of the total regional RU): data were collected from the clinical database at time zero and after 6 months. In the meantime, specialists of RU underwent education on COPD-GL.
At time zero, significant gaps between current practice and recommendations emerged both in medical practice (mean agreement 25%) and in the health organization (48%). At month 6 the gaps were reduced more in clinical practice (60.7%) than in organization (54.7%).
It is easier to resolve the gaps in specialist clinical practice than the organizational gaps, changing which is the politicians' task. Correcting specialists' inappropriateness may be worthless if this is not accompanied by improvement of the organizational obstacles. The search for appropriateness should not be limited only to specialists or to a strict control of drug prescription but should include all the organizational aspects. Implementation of COPD-GL calls for actions on the part of both specialists and the health system.
The fundamental reason for the examination is to explain the relationship between the Internal Audit Functions (IAF) and the nature of financial reporting quality in the segment of the Pakistan ...textile. Samples of 100 internal auditors of fifty different textile units which are located in the Punjab province are taken for this study. The data was collected by (Questionnaire).The study provided the findings that when the IAF and external audit have strong relationship with each other by having regular meetings and more collaboration in the preparation of the annual audit, the textile units showed high quality in the financial reporting. The results of the study propose that there is certain relationship exists between the IAF commitment during the time spent the money related accounting and the nature of the budgetary reporting. The discoveries of the study prescribe that IAFs play an essential part in the way of the financial reporting. The major limitations of this research are cost, time, research culture and the scarcity of the internal auditor.
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