Business Commons^™

Performance Auditing And Performance Improvement In Government: Public Sector Management Reform, Changing Accountabilities And The Role Of Performance Audit, John Glynn

John J Glynn

Public expenditure crises of the 1970s and 1980s led many governments to: - firstly, enforce stricter financial climates that included the use of cash limits and cash planning to motivate public servants towards greater economy and efficiency; and - secondly, to introduce a series of other reforms that gave pre-eminence to what has become colloquially termed the “new public management” (NPM). Key to many of these reforms was the belief that NPM would lead to more publicly accountable management and that limited resources would not only be used more efficiently but also more effectively in terms of intended policy objectives. …

Value For Money Auditing - An International Review And Comparison, J Glynn

John J Glynn

Value for money (VFM) auditing is not new, in many ways the United Kingdom is now only embarking explicitly upon a path that other countries have already followed. This paper reivews developments in six countries. The first country reviewed is the United Kingdom where two recent pieces of legislation have been introduced which have given statutory recognition to VFM auditing. In only a few years important moves have been made with respect to two important aspects of value for money: economy and efficiency. However, the third and most important element, that of effectiveness, appears so far to be only of …

The Development Of Performance Auditing In Australia, John Glynn

John J Glynn

No abstract provided.

Assessing And Responding To Audit Risk In A Financial Statement Audit, With Conforming Changes As Of March 1, 2012, American Institute Of Certified Public Accountants (Aicpa)

Industry Guides (AAGs), Risk Alerts, and Checklists

No abstract provided.

Analytical Procedures, With Conforming Changes As Of March 1, 2012; Audit And Accounting Guide, American Institute Of Certified Public Accountants (Aicpa)

Industry Guides (AAGs), Risk Alerts, and Checklists

No abstract provided.

An Examination Of Issues Related To Professional Skepticism In Auditing, Erin Burrell Nickell

Electronic Theses and Dissertations

The third general standard of fieldwork requires auditors to maintain a skeptical mindset with regards to the collection and critical assessment of audit evidence. While professional skepticism is frequently referenced by professional standards, a lack of precision in defining the concept presumably leads to variation in how skepticism is exercised in practice. Drawing on theories from the fields of psychology, economics and organizational justice, this dissertation considers different perspectives of what constitutes sufficient professional skepticism and examines how those perspectives differ between audit practitioners and regulators. First, I consider competing perspectives of professional skepticism – neutral versus presumptive doubt – …

Accounting Fraud At Cit Computer Leasing Group, Inc., Jeffrey Michelman

Jeffrey E Michelman

The case chronicles a newly promoted manager's search to uncover an inventory fraud that had been perpetrated by her supervisor at CIT, a publicly held company. During the ensuing investigation, CIT and the Florida Department of Law Enforcement identified 36 different transactions involving the diversion of nearly 2,500 computers, with a conservative estimated total loss to the company of $637,000. Students are also exposed to the importance of internal controls, red flags, the fraud triangle, and forensic accounting techniques. The case also lets the reader see what occurs when, due to management override of internal control, a subordinate no longer …

Industry Specialist Auditors, Outsider Directors, And Financial Analysts, Jerry Sun, Guoping Liu

Odette School of Business Publications

This study investigates the relationships among industry specialist auditors, outside directors, and financial analysts. Specifically, we examine the effect of analyst coverage on the association between auditor industry specialization and outside directorship. We find that outside directors are less likely to hire industry specialist auditors for firms with high analyst coverage than for firms with low analyst coverage. Our findings suggest that analyst coverage moderates outside directors' demand for industry specialist auditors, that is, financial analysts may compete with industry specialist auditors to some extent in monitoring financial reporting process.

Does Female Directorship On Independent Audit Committees Constrain Earnings Management?, Jerry Sun, Guoping Liu, George Lan

Odette School of Business Publications

This study examines whether the gender of the directors on fully independent audit committees affects the ability of the committees in constraining earnings management and thus their effectiveness in overseeing the financial reporting process. Using a sample of 525 firm-year observations over the period 2003 to 2005, we are unable to identify an association between the proportion of female directors on audit committees and the extent of earnings management.

Client-Specific Litigation Risk And Audit Quality Differentiation, Jerry Sun, Guoping Liu

Odette School of Business Publications

The purpose of this paper is to examine whether client-specific litigation risk affects the audit quality differentiation between Big N and non-Big N auditors. Specifically, the authors examine whether higher quality audits of Big N auditors relative to non-Big auditors is more pronounced for clients with high litigation risk than for clients with low litigation risk. The authors develop the hypothesis based on auditors' potential monetary and reputational losses, collect the data of US listed companies from the Compustat and CRSP databases, and conduct regression analyses. The authors find that the higher effectiveness of Big N auditors over non-Big N …

Environmental Risks: Doing Business In China, Jack R. Ethridge, Treba Marsh, Esther Bunn

Faculty Publications

Planning and conducting the audit of financial statements involves understanding the entity and the environment in which it operates. First and foremost this requires identifying the risks faced by the entity. Identifying these risks can be a complex and difficult task since the auditor needs to not only understand the entity’s risk process but also independently understand the risks facing the firm. Tackling this task will involve a comprehensive review of the external and internal factors affecting the business. It is possible many identified business risks are related to financial reporting risk and ultimately to audit risk. Therefore, the auditor …

Learning The “Craft Of Auditing”: Applications Of The Cognitive Apprenticeship Framework, Kimberly D. Westermann

2011

This dissertation consists of three studies examining component(s) of the cognitive apprenticeship (CA) model applied to on-the-job learning in auditing. This abstract summarizes each study, including purpose, methodology, and findings. The first study provides descriptive evidence on the importance and pervasiveness of CA as a model of on-the-job learning (OTJL) in auditing, investigates changes in its use over time, and assesses factors that promote or hinder auditors’ learning through apprenticeship. We conducted semi-structured interviews with 30 relatively new and more experienced audit partners at a Big 4 firm, seeking their impressions about past and current OTJL practices in public accounting. …

Audit Quality And Accrual Persistence: Evidence From The Pre- And Post-Sarbanes-Oxley Periods, Dennis Chambers, Jeff L. Payne

Faculty and Research Publications

Purpose – The purpose of this paper is two-fold: first, to examine whether the quality of accruals, as measured by accrual persistence, improved in the post-Sarbanes-Oxley (SOX) period, and second, to examine the degree to which SOX-related improvement in accrual persistence varies across companies depending on the degree of their auditor's independence.

Design/methodology/approach – The paper compares accrual persistence in the pre- and post-SOX periods to test the first question. Then, partitioning on relative client importance as a measure of auditor independence, the paper compares the SOX-based improvement for clients of low and high independence audit firms.

Findings – The …

Auditor Stress: Antecedents And Relationships To Audit Quality, Mohd Nazli Mohd Nor

Theses: Doctorates and Masters

Research on Reduced Audit Quality Practices (RAQP) has consistently shown serious negative consequences in the auditing profession. It has found that under certain pressure levels, auditors tend to engage in RAQP. However, most of the previous studies that had investigated RAQP failed to examine RAQP from a stress model perspective which incorporates stressors, stress measures and stress consequences into the model and to measure the interactions among these constructs. Previous research has mainly focused on the direct effect of stressors (e.g., time budget pressure, leadership styles, individual personality etc.) on RAQP; there is no single investigation that has simultaneously examined …

La Riforma Del Controllo Contabile Delle Societa’ In Italia: “Schede Di Lettura” Del Decreto Legislativo 39/2010 In Tema Di Svolgimento Della Revisione Legale Dei Conti, Claudio Sottoriva

Claudio Sottoriva

Il contributo offre una prima lettura delle novità apportate dal Decreto Legislativo n. 39/2010 attuativo della Direttiva 2006/43/CE, relativa alle revisioni legali dei conti annuali e dei conti consolidati. La disciplina dello svolgimento della attività di revisione legale dei conti trova quindi ora riferimenti normativi nelle norme del Codice Civile e in alcune norme speciali (principalmente nel T.U.F.) nonché per quanto non diversamente disciplinato nel Decreto 39/2010. La disciplina è destinata a trovare completamento con l'emanazione di specifici regolamenti attuativi del Decreto da parte del Ministero dell'Economia e delle finanze nonché da altre Autorità (Consob, Banca d'Italia, etc.). L'analisi consente …

Three Studies Investigating The Legal Liability Implications Of The Sarbanes-Oxley Act Of 2002, Jillian Phillips

Electronic Theses and Dissertations

This dissertation examines the litigation and legal liability exposure of auditors related to the Sarbanes-Oxley Act of 2002 (SOX). Three separate studies were conducted to examine how auditor's litigation exposure is evaluated by potential litigants (lawyers), and how auditor liability is evaluated by jurors, following the bankruptcy of a client. The first study examines whether the auditor's SOX Section 404 reporting decisions influence lawyers' assessments of their litigation exposure. The second study investigates whether voluntary disclosures of significant deficiencies in internal controls within the SOX Section 404 report, and the subjectivity of the internal control judgments made by the auditor, …

Dysfunctional Audit Behaviour: An Exploratory Study In Malaysia, Halil Paino, Zubaidah Ismail, Malcolm Smith

Research outputs pre 2011

The quality of the opinion provided by audit firms is an important determinant of their long-term survival, but audit quality is difficult to gauge, which makes it particularly sensitive to the behaviour of the individuals who carry on audit work. This paper seeks to identify the incidence of dysfunctional audit behaviours and audit quality reduction behaviours, actions taken by an auditor during engagement that reduce evidence-gathering effectiveness. The paper is based on a survey of 244 auditors working in small/medium and big audit firms in Malaysia. The paper identifies key variables leading to dysfunctional audit behaviour. The paper is subject …

Real-Time Corporate Tax Audits And Their Impact On Financial Reporting, M. Catherine Cleaveland, Kathryn K. Epps, Cassie F. Bradley

Faculty and Research Publications

The article focuses on the Compliance Assurance Process (CAP) program, a simultaneous auditing process that aims to potentially reduce audit procedures after the corporate tax filing date in the U.S. The process by which the program work is explained, which involves a corporation working an entire tax year with an account coordinator assigned by the Internal Revenue Service (IRS). Benefits of the CAP program include increased corporate tax compliance, while its disadvantages include resistance by a company to participate in a real-time audit program.

Auditor Type, Firm Ownership And Auditor Reporting Under A Joint Audit Requirement : Exploratory Evidence From India, Ting Zou

Theses & Dissertations

India is one of the largest developing countries in the world. Although many issues and phenomena arising from its transitional economy are worthy of research from an accounting perspective, the Indian accounting market is a field that remains relatively unexplored in the extant literature. One of the institutional features of India is that while it is mandatory for public sector companies and banks to have joint auditors, their appointment is voluntary for other companies. In a thesis motivated by this and other institutional features and the absence of related accounting and auditing studies conducted in an Indian setting, I examine …

Auditor Choice, Audit Fees And Internal Governance In Family Firms, Shaohua He

Theses & Dissertations

I study the role of auditing in mitigating agency concerns in family firms. Family firms face less severe agency problems due to the separation of ownership and control (Type 1) but more severe agency problems between controlling and noncontrolling shareholders (Type 2). As family firms make up a large part of most free enterprise economies it is important to examine these two agency problems with respect to auditor choice and audit effort. I find that family firms are more likely to choose a specialist auditor than nonfamily firms, consistent with the argument that family firms need to signal their non-expropriating …

Coso Internal Control - Integrated Framework: Guidance On Monitoring Internal Control Systems, Volume Ii: Application, Committee Of Sponsoring Organizations Of The Treadway Commission

Association Sections, Divisions, Boards, Teams

No abstract provided.

Assessing And Responding To Audit Risk In A Financial Statement Audit, Revised Edition As Of October 1, 2009; Audit And Accounting Guide, American Institute Of Certified Public Accountants. Risk Assessment Audit Guide Task Force

Guides, Handbooks and Manuals

No abstract provided.

Proposed Statement On Auditing Standards, Communicating Internal Control Related Matters Identified In An Audit (Redrafted), December 21, 2009, Comments Are Requested By April 30, 2010; Exposure Draft (American Institute Of Certified Public Accountants), 2009, December 21, 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, Communicating Internal Control Related Matters Identified In An Audit (Redrafted), December 21, 2009, American Institute Of Certified Public Accountants. Auditing Standards Board

Exposure Drafts, Comment Letters, and Statements of Position

No abstract provided.

Psychological Characteristics Contributing To Expertise In Audit Judgement, Pamela Kent, Lois Munro, Tony Gambling

Pamela Kent

Prior research has sought a better understanding of the relation between audit expertise and judgment of auditors. The motivation for this study is derived from the need to further understand psychological characteristics contributing to audit expertise. This paper adopts part of a framework derived from the decision-making literature in psychology and applies it to auditing. Shanteau proposes that expert decision makers inherently possess 14 psychological characteristics. The importance of these characteristics is assessed using the perceptions of 55 practising auditors from three national accounting firms in Australia within and across four phases of the audit using a survey instrument. The …

Early Evidence Of The Volatility Of Comprehensive Income And Its Components, Timothy L. Mccoy, James H. Thompson, Margaret A. Hoskins

All Faculty Scholarship for the College of Business

The Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 130 Reporting Comprehensive Income, in June 1997, effective for fiscal periods beginning after December 15, 1997. Early trends in reporting comprehensive income and its components for the Fortune 500 reveal an overwhelming preference for disclosure in the statement of changes in stockholders' equity, despite the FASB's recommendation of utilizing a combined statement of income/comprehensive income or a separate statement of comprehensive income. This disclosure tends to downplay the importance of other comprehensive income items and focus readers' attention on the traditional net income figure rather than comprehensive …

Quality Assurance In Auditing: A Recent Development In Professional Practice, Joseph Femi Adebisi Phd

Joseph Femi Adebisi PhD

No abstract provided.

Auditing Investigation And Assurance Services, Joseph Femi Adebisi Phd

Joseph Femi Adebisi PhD

No abstract provided.

Forensic Accounting, Carol L. Daniel

The Corinthian

Forensic Accounting is a special field of accounting that utilizes accounting, auditing, and investigative skills to identify and resolve legal issues. Forensic Accounting involves looking beyond the numbers, it is more than accounting work or detective work - it is a combination of the two. This paper will focus on the use of Forensic Accounting, the addition of Auditing Standards (SAS) No. 99’s 42 red flags, and the ten Statements on Auditing Standards (SAS) Nos. 102-111 and how they work together to detect fraudulent financial statements.

Compilation And Review Engagements; Statement On Standards For Accounting And Review Services 19, American Institute Of Certified Public Accountants. Accounting And Review Services Committee

AICPA Professional Standards

No abstract provided.