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China has recently introduced a new audit law that aims to increase the scope of audit supervision and raise the standards for preventing risks in auditing national public projects. This paper presents a systematic research study on the causes of audit risks in national public projects and discusses the process by which these causes contribute to the emergence of such risks. Furthermore, the paper investigates the core risk sources in various types of national construction project audit. This paper aims to provide theoretical support for auditors of national construction projects in risk avoidance when conducting audits.

In this study, the authors carefully selected five national public audit projects from China and performed a comprehensive analysis of 85 relevant audit documentation. The textual analysis was conducted using Nvivo12 software, and the grounded theory approach was adopted for generalization purposes.

Based on the research results, the findings suggest that there are five key causes contributing to the audit risk of national construction projects: professional competence, risk awareness, management capacity, level of attention and deliberate fraud. The most critical factor identified is management capability, with 59.93% of the data supporting this view. This conclusion was based on an analysis of state-owned enterprises, administrative organs and public institutions. Building upon this, a framework titled “the mechanism of audit risk factors with management capability as the core” was constructed.

This paper employs qualitative analysis methods to examine national construction projects in China, contributing new literature to the theoretical study of audit risk management. The article also provides practical recommendations for auditors on how to mitigate audit risks and improve the quality of audit services in national project governance.

Reports on an audit of service organizations, clinical care and casemix. The sample included up to 40 consecutive cases of acute stroke (1CD10 161‐164) from each trust, admitted from 1 January to 31 March 1998 and 1 August to 31 October 1999. Feedback consisted of individualized reports showing participants’ own results compared to the national data, and regional multidisciplinary workshops between audit rounds. A total of 197 (81 per cent) trusts (6,894 cases) in England, Wales and Northern Ireland participated in the first round, and 175 (72 per cent) (5,823 cases) in the second. Of the 38 organisational standards, 29 improved between 1998 and 1999 (range 1‐20 per cent, median 5 per cent); 64 of the 71 process standards improved (range 1‐20 per cent, median 8 per cent). Inter‐rater reliability was good with kappa scores of 0.49 to 0.87. National multidisciplinary, cross sector audit is feasible and can promote service improvements. Comparison of participants’ results to national data is a useful way of identifying areas needing change at local level.

The formal adoption of internal auditing within the South African public sector was made compulsory by the Public Finance Management Act, No. 1 of 1999. Despite internal auditing’s primary role of adding value and assisting organisations to accomplish pre-defined strategic objectives, the increasing frequency of service delivery protests in South Africa, suggests that mandatory internal auditing may not have contributed to improving public sector performance and enhancing service delivery, as envisaged. This paper aims to identify the factors preventing internal audits from effectively contributing to improved public sector performance and service delivery.

The study adopted a sequential mixed-methods research approach. Firstly, a survey instrument was used to collect empirical data from survey respondents at South African national government departments. Secondly, semi-structured interviews and focus group discussions were held with a purposively selected sample of participants to explore the observations from the first phase. The observations from the first two phases were validated through an analysis of pertinent documents and records.

Despite all departments adopting internal auditing, management’s expectations of internal auditing and the services provided by the internal audit function diverged. The results suggest that the emergence of a compliance approach to organisational governance together with poor performance management skills has impaired internal auditing’s ability to effectively contribute to strategic and performance management.

Despite its South African orientation, as internal auditing is a global association and given that service delivery protests continue to occur in several countries around the world, increases the study’s international relevance. Moreover, the mandate of internal auditing requires it to add value to an organisation irrespective of its geographical location.

The study contributes to the existing body of knowledge on internal auditing, particularly its adoption and implementation in the South African public sector. In addition to identifying the factors inhibiting effective internal auditing, the study advances a suggested framework for the future of internal auditing.

This paper aims to report the results of a cross‐national cultural experiment on auditors' belief revision when evaluating internal control.

Hogarth and Einhorn's belief‐adjustment model (BAM) and Hofstede's national culture are employed. Two experimental conditions, created by crossing two levels of audit information: initial (un)favourable (UNFAV‐MODFAV) FAV‐MODFAV information, each followed by additional moderately favourable audit evidence and two levels of national culture dimensions of individualism (Australian auditors) and collectivism (Taiwanese auditors).

Consistent with BAM, the results of the experiment confirm that the evaluation task of internal control is an additive process. Collectivist culture auditors are found to revise their beliefs significantly upwards when encountering UNFAV‐MODFAV compared with FAV‐MODFAV, but not for individualist culture auditors. Collectivist culture auditors also revise their beliefs significantly upwards when they encounter UNFAV‐MODFAV compared with individualist culture auditors who do not revise their beliefs significantly upwards. However, neither collectivist nor individualist culture auditors revise their beliefs significantly upwards when encountering FAV‐MODFAV. Here, the multivariate regression shows that collectivist (individualist) culture auditors are (are not) concerned with “painting a good picture” to keep the client happy.

With globalisation, the national culture effect makes an important contribution to the disclosure of financial reporting. The findings of the research show that, in evaluating the internal control of an audit client, collectivist culture auditors revise their beliefs more favourably when encountering additional audit evidence which is relatively favourable (UNFAV‐MODFAV) compared with individualist culture auditors. In practice, the implications on auditors' reporting of the internal control (for example, Section 404 of the Sarbanes Oxley Act 2002) regulator need to take into consideration that the national culture of auditors is an important input in assessing control risk. In bridging the gap between research and practice, an urgent need has to be addressed, as it may impair the effectiveness of the audit. The collective culture auditor's concern to keep the client happy may be construed as not being independent.

The paper is the first to employ the BAM and Hofstede's national culture to test auditors of different national cultures in their belief revisions when evaluating the client's internal control.

Audit within China has developed since the 1980s in line with developments in Chinese society and political life more generally. The system of Chinese local government audit is deeply related to Chinese national audit. The Chinese National Audit Office sets the standards by which the systems work and each auditor both works for the national auditor and the appropriate tier of regional or local government. The system of audit is designed both to check the way in which the government operates financially and in some cases to examine the effective operation of the government.

The Chinese data setting allows researchers to explore the influence of local versus national (central) government ownership on companies. This study aims to examine the influence of government ownership (local versus national) and auditor choice (choosing larger or smaller firms) on audit pricing in China.

This study executed three panel data regressions to examine the two hypotheses using 19,626 observations from 2009 to 2017 in the Chinese data setting. This study also uses the Sobel test to investigate the moderating effect of auditor choice.

This study first examines whether choosing a large audit firm positively influences audit pricing and whether listed state-owned enterprises (SOEs) charge less audit fees to audit firms after controlling for various variables. However, the interaction influence of government ownership and audit firm size on audit pricing is positive, suggesting that a large audit firm charges a client company more, even if the client is an SOE. More importantly, when we divide SOEs into national- and local-SOEs, the results of the influence of auditor choice, government ownership and the interaction of government ownership on audit pricing are consistent (plus, minus, plus), and audit firms charge local-SOEs less than national-SOEs. Furthermore, from the additional analysis, this study finds that the strong auditor type has a moderate effect on the case of local-SOEs on audit pricing and local-SOEs choose smaller auditors.

Research on the differences between local and national government ownership is limited. This study adds empirical results from this perspective. In particular, the findings suggest a further audit pricing research direction to consider the influence of client companies’ ownership types and auditor choice, especially in countries with planned economies.

This study aims to examine whether national industry expertise in Italy is more dominant than local expertise. Prior studies from Australia, USA and UK show that audit fees for industry experts are priced at a higher premium at the local level than the national level. These countries have voluntary audit firm rotation, while Italy has mandatory audit firm rotation (MAFR). The authors predict that Italy has a stronger national than local level of industry expertise, to better retain and transfer industry expertise.

The authors compare audit fee premiums of national industry experts to local levels, using quantitative (multivariate tests) and qualitative (interviews) methodology.

Using hand-collected audit fees, the authors find that the audit fee premium for industry expertise is greater at the national level than the local level. The authors find corroborating results with audit hours. To provide further support, the authors conduct analysis for a neighboring country that does not have audit firm rotation. Using hand-collected data from Germany, the authors find that audit fee premiums from national industry expertise are no different from local industry expertise.

The present study study has theoretical and practical implications, for European Union countries, which recently adopted MAFR and for countries considering adoption in the future.

This chapter summarises the analysis of the preceding chapters. Whilst different countries use different models for their audit, some continuities do emerge. The audit explosion has led to the advance of both financial and performance audits. Inspection however remains an infrequent feature of the audit landscape. Many countries have a localised system of local audit in which the role and influence of audit is variable. Furthermore, the audit of local government lacks a clear democratic role at the moment.

To maintain auditor independence, Section 201 of the Sarbanes–Oxley Act of 2002 (SOX) imposes restrictions on audit firms in rendering management advisory services (MASs) to audit clients. Responding to the requirement, audit firms establish a strategic alliance with consulting companies to expand their scope of services to alleviate the impairment of auditor independence. Taiwan follows the spirit of SOX in related laws and regulations. To investigate the effects of SOX on Taiwanese auditing industry, this study aims to examine the relationship between MASs and operating performance of audit firms.

This study obtains empirical data from the 1989–2017 Survey Report of Audit Firms in Taiwan, published by the Financial Supervisory Commission (FSC). FSC administers the survey across all registered audit firms annually to collect business information on the auditing industry for macro-economic analysis and industrial policy development. The authors group audit firms into three categories: national, regional and local firms. Based on the structure-conduct-performance (S-C-P) theoretical framework, this study establishes the following cross-sectional regression equation to test the authors’ hypotheses.

Main results indicate that national firms have better post-SOX firm and alliance performance. Both firm and alliance MASs contribute more to the performance of national firms after SOX.

This study claims that national firms establish alliance with consulting companies for resource sharing but regional and local firms for tax-saving.

Consistent with the economic theory of regulation and resource-based theory, SOX matters in Taiwan.

This paper outlines the first stage in the development of the National Centre for Clinical Audit (NCCA), which is being established by a partnership of 14 professional organizations. Its purpose is to provide a national focus for clinical audit to ensure that those who are conducting local, regional, and national audits are informed about similar projects. The first key task for the centre is the development of criteria for excellence in clinical audit, which will form the foundation on which the NCCA will build the core information and dissemination services. The NCCA must work in cooperation and collaboration with potential users and professional organizations to ensure that the services it provides are relevant.