Business Commons^™

Securing Big Data Provenance For Auditors The Big Data Provenance Black Box As Reliable Evidence, Deniz Appelbaum

Department of Accounting and Finance Faculty Scholarship and Creative Works

The purpose of this article is to highlight a main issue regarding reliable audit evidence derived from Big Data—that of secure data provenance. Traditionally, audit evidence external to the client has been regarded as superior to other forms of evidence. However, regarding external “messy” Big Data sources that may be material to aspects of the audit, these sources may lack provenance and verifiability. That is, the origins of the data may be unclear and its log files incomplete. According to the standards, such evidence should be considered as less reliable for audit evidence. External auditors, as outsiders of the client, …

Ipo Firms' Voluntary Compliance With Sox 404 As Evidence On The Value Relevance Of Internal Control Quality, Qianyun Huang, Kimberly Gleason, Leonard Rosenthal, Deborah Smith

Business Faculty Publications

Newly public firms are not required to comply with SOX 404 for their initial public offerings. This provides a unique setting in which to investigate the benefits of voluntary disclosure with SOX 404 and the value of information revealed as a consequence of compliance. We investigate whether voluntary compliance with SOX 404, either fully or partially, impacts the perceived risk of firms conducting IPOs on the first day of trading (reflected in underpricing) or following the IPO. Our results indicate that neither full compliance with SOX 404 at the time of the IPO, nor a managerial discussion of internal controls …

The Effect Of Hypothesis Framing, Prior Expectation And Professional Trait Scepticism On Experts’ And Novices’ Evidence Selected In A Complex Task, Abhijit Das

Theses: Doctorates and Masters

This study examines evidence selection strategy among external auditors (i.e. professionals) and accounting students (i.e. novices) in a going concern assessment task considering three factors; hypothesis framing, prior expectation and professional “trait” scepticism as measured by Hurtt (2010) scale. Within this context, the study sets out to accomplish three goals: (1) to re-examine evidence selection strategy based on hypothesis framing and prior expectation, (2) to validate the Hurtt (2010) scale using expert reviews and confirmatory factor analysis and (3) to investigate whether professional trait scepticism influences selection strategy.

Owing to the incidence of high-profile accounting and auditing scandals worldwide, the …

Continuous Monitoring Of Enterprise Risks: A Delphi Feasibility Study, Robert Baksa

Dissertations

A constantly evolving regulatory environment, increasing market pressure to improve operations, and rapidly changing business conditions are creating the need for ongoing assurance that organizational risks are continually and adequately mitigated. Enterprises are perpetually exposed to fraud, poor decision making and/or other inefficiencies that can lead to significant financial loss and/or increased levels of operating risk. Increasingly, Information Systems are being harnessed to reinvent the risk management process. One promising technology is Continuous Auditing, which seeks to transform the audit process from periodic reviews of a few transactions to a continuous review of all transactions. However, the highly integrated, rapidly …

The Service-Quality Audit: A Hotel Case Study, James Y. Luchars, Timothy R. Hinkin

Timothy R. Hinkin

A service audit that quantifies the cost of everyday errors can help a hotel manager pinpoint which quality problems to address first.

Evidence On The Audit Risk Model: Do Auditors Increase Audit Fees In The Presence Of Internal Control Deficiencies?, Chris Hogan, Michael Wilkins

Michael S Wilkins

The article discusses the study of determining whether audit risk model is descriptive of what occurs in the auditing practice or if the relationship between fees and internal control deficiencies (ICDs) suggest that audit enterprises exert more effort in auditing firms that impart ICDs. The study examines the internal controls over financial reporting (ICOFR), generally accepted accounting principles (GAAP), audit risk model, audit fees and sections of Sarbanes-Oxley Act. The study found out that audit fees are significantly higher for firms disclosing material weakness.

Auditor Perceptions Of Audit Workloads, Audit Quality, And The Auditing Profession, Julie Persellin, Jaime Schmidt, Michael Wilkins

Michael S Wilkins

In this study, we use a survey instrument to obtain perspectives from over 700 auditors about present-day audit workloads, the relationship between audit workloads and audit quality, and auditing as a career. Our findings indicate that auditors are working, on average, five hours per week above the threshold at which they believe audit quality begins to deteriorate and often 20 hours above this threshold at the peak of busy season. We find that auditors perceive workload fatigue as having the largest negative impact on morale, and understaffing and staff turnover as being two of the biggest impediments to delivering a …

From Legally Confidential To Financially Confident: Resolving The Tension Between Lawyers And Auditors Over Contingent Liability Disclosure, Samantha Nicole Kunz

CMC Senior Theses

Auditors review documented financial figures to test for their accuracy and materiality. Lawyers analyze evidential facts and records to build sound legal arguments. These parties work toward a mutual purpose: to present their clients as legitimate and compliant businesses. But what happens when the concrete facts upon which lawyers and auditors base their work are obscured by their inability to see into the future? In other words, how can these professions conjunctively handle potential future obligations brought about by contingent liabilities?

This study will attempt to resolve the tensions that emerge between lawyers and auditors when tasked with estimating the …

Narrowing The Gap Of Financial Fraud Detection In Corporations, Solomon Aborbie

Walden Dissertations and Doctoral Studies

Business leaders remain exposed to financial and accounting fraud as well as loss of profitability, despite the dictates of the SOX Act of 2002. The most challenging aspect of corporate management is the unexpected nature of an emerging, existing, or an inherent financial risk. Guided by the evolution of fraud theory, this exploratory case study's purpose was to identify and explore the financial management strategies that corporate financial managers need to adequately protect investors. Twenty participants from a population group of corporate auditors of Fortune 1000 corporations within 70 miles of Columbus, Ohio provided input for this study. Data from …

Proposed Statement On Auditing Standards, An Audit Of Internal Control Over Financial Reporting That Is Integrated With An Audit Of Financial Statements, September 10, 2014, Comments Are Requested By December 10, 2014; Exposure Draft (American Institute Of Certified Public Accountants), 2014, September 10, American Institute Of Certified Public Accountants. Auditing Standards Board

Exposure Drafts, Comment Letters, and Statements of Position

No abstract provided.

Comment Letters On Proposed Statement On Auditing Standards, An Audit Of Internal Control Over Financial Reporting That Is Integrated With An Audit Of Financial Statements, September 10, 2014, American Institute Of Certified Public Accountants. Auditing Standards Board

Exposure Drafts, Comment Letters, and Statements of Position

No abstract provided.

Interviewing The Client, Michael D. Akers, Robert Yahr

Michael D. Akers

This paper examines an assignment where students taking either an introductory auditing students or an accounting communications course interview a client to gain an understanding of internal control and the interview process. Students document the results of the interview in a memorandum. The paper provides detailed information regarding the design and implementation of a portion of the internal control system. The three main objectives of the assignment are 1) to provide students with the opportunity to demonstrate, develop, and enhance their communication skills; 2) to convey a realistic picture of the accounting environment; and 3) to familiarize students with a …

Do Clients Avoid ‘Contaminated’ Offices? The Economic Consequences Of Low Quality Audits, Robert Lowell Whited

Doctoral Dissertations

This study investigates whether local audit offices suffer financially following their association with low-quality audits. The announcement of a restatement indicates that the contracting auditor failed to detect and correct a material misstatement. Therefore, I predict that office reputation suffers following restatements of previously audited financial information. As the frequency of restatement announcements increases, the perceived pervasiveness of systematic audit failures (‘contamination’) within the office will increase accordingly. I document that contaminated offices (Big 4 and non-Big 4) suffer a decline in market share relative to their peers. Furthermore, when examining auditor retention decisions at the individual client level, I …

A Comparison Of Audit Fee Trends For East Tennessee Based Companies And Similar Companies Based In Similar Regions, William J. Saulsbury

Undergraduate Honors Theses

Research examines audit fee trends for a decade. The research focuses on audit fees of companies in the East Tennessee Area and compares the audit fees of these companies to similar companies based in similar regions of the United States. Possible causes for the fluctuations of audit fees during the decade are also discussed.

Using The Work Of Internal Auditors; Statement Of Auditing Standards No. 128, American Institute Of Certified Public Accountants. Auditing Standards Board

Statements on Auditing Standards

No abstract provided.

Audit Quality: A Cross-National Comparison Of Audit Regulatory Regimes, Gary Kleinman, Beixin Lin, Dan Palmon

Department of Accounting and Finance Faculty Scholarship and Creative Works

The importance of fostering more accurate audits has been heightened by a series of highprofile accounting scandals at the beginning of the millennium. These scandals prompted more stringent regulations over corporate governance and financial reporting and the creation of audit oversight bodies as the Public Company Accounting Oversight Board (PCAOB) in the United States and the Public Oversight Board (POB) in the United Kingdom. In parallel, the growing globalization of business has brought forth calls for adherence to a common set of International Financial Reporting Standards (IFRS). Even if a common standard is promulgated, it will not lead to similar …

The Role Of Independence In The Effectiveness Of Continuous Auditing, Dereck D. Barr

Electronic Theses and Dissertations

In this study, I examine whether and how the frequency of internal audits (continuous vs. periodic), functional independence (separate vs. combined internal audit assurance and consulting functions), and the type of earnings management (accrual-based vs. real) affect internal auditors' perception of the likelihood managers will manipulate earnings. I find that earnings management is less likely when the internal audit function uses continuous auditing, regardless of the level of independence. However, the effect of independence is context-dependent such that internal auditors expect that real (accrual-based) earnings management is less likely when the internal audit function is independent (not independent), regardless of …

Redefining Internal Audit Performance: Impact On Corporate Governance, Razimah Binti Abdullah

Theses: Doctorates and Masters

One of the preventive measures to situations akin to world financial crises increasingly forwarded is effective internal audit function (IAF) (e.g., Imhoff, 2003; Mohamad & Muhamad Sori, 2011). Internal audit, a component of corporate governance, continues to evolve due to changes in business strategies and requirements placed on it by legislators. The roles of internal auditors and audit committees (ACs), the key personnel in IAFs, are changing to a more value-added approach as business strategies move towards corporate sustainability and organisational excellence. Suggestions forwarded to improve the performance or determining the quality of IAF include effective involvement of ACs in …

Proposed Statement On Auditing Standards, Using The Work Of Internal Auditors, April 15, 2013, Comments Are Requested By July 15, 2013; Exposure Draft (American Institute Of Certified Public Accountants), 2013, April 15, American Institute Of Certified Public Accountants. Auditing Standards Board

Exposure Drafts, Comment Letters, and Statements of Position

No abstract provided.

Comment Letters On Proposed Statement On Auditing Standards, Using The Work Of Internal Auditors, April 15, 2013, American Institute Of Certified Public Accountants. Auditing Standards Board

Exposure Drafts, Comment Letters, and Statements of Position

No abstract provided.

Ballots For Proposed Statement On Auditing Standards, Using The Work Of Internal Auditors, April 15, 2013, American Institute Of Certified Public Accountants. Accounting Standards Board

Exposure Drafts, Comment Letters, and Statements of Position

No abstract provided.

Budgeting, Auditing And Governance: Implementing The Accountability Framework, Professor Ben C Osisioma

Prof Ben Chuka Osisioma

Good public governance involves the management of public resources in a manner that guarantees sustainable development in an atmosphere of due process and rule of law, free from wastage and corruption. The goal is to guarantee a people’s right to health, adequate housing, sufficient food and fibre provision, quality education, fair justice and personal security. Good governance is rooted in quality institutions, informed and adequately motivated citizenry, and structures and processes that endure. The budget and audit tools are critical to the process, and within the requirements of accountability framework can bring the so-called dividends of democracy to citizens. In …

Auditor Industry Specialization, Board Governance, And Earnings Management, Jerry Sun, Guoping Liu

Odette School of Business Publications

No abstract provided.

Fair Value Measurements, Nathan Hatch Cannon

2013

This dissertation consists of two empirical studies that investigate fair value measurement issues currently facing the accounting profession--one from the perspective of the auditor, and the other from the perspective of the financial statement user. The results of each study are described below.

This first study examines experienced auditors' descriptions of specific client experiences in which auditing fair value measurements (FVMs) was particularly challenging. Based on a field survey of high-level engagement team personnel from several large firms, we identify a number of key issues currently facing the profession in auditing FVMs. First, when asked about challenges faced in auditing …

Biztech Winter 2013, Southern Adventist University

BizTech – School of Business Newsletter

The winter 2013 edition of BizTech features articles on internships, auditing, ENACTUS, and a message from the dean.

Changes In Auditing: A Three Part Investigation, Denise R. Hanes

2013

This dissertation consists of three studies investigating changes in auditing. This abstract summarizes each study, including purpose, methodology, and findings.

The first study synthesizes the extant literature examining geographically distributed work arrangements in other disciplines such as management and social psychology. Focusing on communication and coordination, knowledge sharing, work design, and social identity in geographically distributed teams, I identify opportunities for future research to expand our understanding of how geographically distributing audit work impacts auditors, the audit process, and audit quality.

My second paper explores a key contributor to the success of geographically distributed work highlighted in my literature review: …

Detecting Deception In Client Inquiries, D. Kip Holderness Jr.

2013

Auditors frequently gather information by conducting client inquiries (Bennett and Hatfield 2013; Hirst and Koonce 1996; Trompeter and Wright 2010). When clients are attempting to hide frauds and irregularities, auditors need to be alert during inquiries to verbal and nonverbal cues emanating from clients that might be indicative of intentional deception. This dissertation consists of two studies investigating the detection of deception in client inquiries. The first study provides a summary of extant literature examining deception detection, with an emphasis on those studies that have implications for client inquiries. I propose several avenues for future research that will contribute to …

Using A Soc 1sm Report In A Financial Statement Audit; Practice Aid Series, American Institute Of Certified Public Accountants (Aicpa)

Guides, Handbooks and Manuals

No abstract provided.

Internal Control For Today's Smart Business, Jeremy Dillard

Guides, Handbooks and Manuals

No abstract provided.

Performance Auditing: The Jurisdiction Of The Australian Auditor General - De Jure Or De Facto? A Comment, John Glynn

John J Glynn

As Parker and Guthrie (1991) state, the question of the Australian Auditor- General’s performance audit mandate has become an issue of much debate over the last two decades.

The initial development of performance auditing by the Australian Audit Office (AAO) can be traced back to the early 1970s. In part this was due to the application of existing powers provided by Section 54 of the Audit Act 1901. These investigations were termed by the AAO ‘project audits’. Amendments to the Act, in 1979, additionally permitted the AAO to undertake efficiency audits in addition to fiscal regularity audits. The problem, since …