Search results

Examines the role of professional associations, governmental agencies, and international accounting and auditing bodies in promulgating standards to foster auditor independence domestically and abroad. Focuses specifically on the role played by the American Institute of Certified Public Accountants, the Institute of Internal Auditors (IIA), the Securities and Exchange Commission and the US Government Accounting Office. Also looks at other professional associations in banking, industry, and manufacturing sectors dealing with sensitive issues of auditors′ involvement in such matters as management advisory services, operating responsibilities, outsourcing, opinion shopping, auditor rotation, and other conflicts of interest which may impair auditor independence.

In 2002, The Institute of Internal Auditors (IIA) observed the 25th anniversary of the publication of its first Systems, Auditability, & Control (SAC) study. This paper reviews the development of the SAC projects and their impact on Information Systems (IS) auditing in particular. Three different research methodologies were used for collecting the data for this research. First, a rigorous literature review was conducted. Second, an oral‐history methodology was used to collect data via interviews. Third, notes and minutes from many early committee meetings of IIA, including the SAC Committee, were studied. The early years (1954‐1977) saw a dearth of related literature. Thus individual accountants and auditors found it difficult to acquire or gather information on emerging issues. The Systems, Auditability, & Control (SAC) study published in 1977 was one of the major attempts to codify IS auditing knowledge. This study has been followed up by three other SAC projects in 1991, 1994, and 2001. These SAC projects have provided some of the best guidance for IS auditors over these last 25 years. From the beginning of IS auditing, there has been a continued acceleration of technology. In particular, the audit process has been impacted by the proliferation of microcomputers.

The Pathways Commission on Accounting Higher Education Report (2012) recommends turning the accounting profession into a learned profession through the purposeful integration of accounting research, education and practice. This paper develops an approach to identifying and quantifying the specific dimensions of the gap between the accounting academic and practice communities, thereby contributing to moving the accounting profession to a learned profession. For this we focus on audit research, because the discussion of the perceived gap between audit research and audit practice is extensive; yet no one has actually quantified that gap to date. While researchers have classified and quantified audit research, no one has done likewise for publications issued by the practice community. We choose the 38 distinct recommendations in the Advisory Committee on the Auditing Profession (ACAP) Final Report as an initial benchmark. We compare those recommendations to the 16 audit research themes from Lesage and Wechtler (2012) and to the publications spanning 33 years of audit research posted on the American Accounting Association website. Eight Lesage and Wechtler themes, comprising 50% of the themes, were not explicitly included in any ACAP distinct recommendation. Conversely, seven distinct recommendations had zero direct matches in the audit literature. This gap suggests future research opportunities in terms of exploring underrepresented topics and, maybe more importantly, the reasons why some topics are underrepresented.

The impact of recent corporate scandals has been serious and far‐reaching. The popular news coverage has been unequalled by any other business issue. The result is that the investment community has lost its trust in corporate governance and financial reporting systems that less than two years ago were the envy of the world. Shareholders are insisting on changes that include enhancements to corporate governance, adherence to ethical standards and strict accountability. In response, the government, the investment community and the public in general have focused greater scrutiny on the corporate financial reporting function.

Explores objectives, functions, roles and contributions of the audit committee in the context of its relationships with the board of directors, internal auditors and external auditors. Suggests that the audit committee is a step forward in the development of corporate control so long as it does not have unrealistic expectations. Concludes that the role of the audit committee should be in an advisory and oversight capacity with independence, but should remain an internal organ of the corporation.

The Department of Health has suggested that organizations should develop mechanisms to ensure successful input from patients and carers into clinical audit processes, advocating the involvement of consumers at all stages of the audit cycle. Two national surveys, of Trust Clinical Audit Committees and Medical Audit Advisory Groups respectively, explored the extent to which audit committees involve users, either as committee members or in relation to other methods of involvement in the audit process. The results indicate limited but increasing involvement of users as audit committee members, but there are benefits, limitations and barriers to user membership. Other reported activities suggest that the most widespread method of involving users is in user satisfaction surveys with little systematic evidence of input to the decision‐making stage and negotiation of topics for audit. The research suggests that guidance is needed on how to involve users effectively at different stages in the audit cycle.

Provides a response to a 1994 article in a Berlin daily newspaper reprimanding the German Federal Court of Audit (FCA) for allegedly exceeding its powers, since it is not a policy‐making body. Sets out to explain how the FCA, in spite of its obligations to exercise self‐restraint in matters of policy, may influence policy decisions. Cites the FCA′s reports on the Eurofighter 2000 and on the new Parliament building in Bonn as examples. Describes the FCA′s role in relation to Parliament and Government and explains its involvement in budget negotiations. Provides specific examples of matters in which the FCA has had an advisory role.

This study examines the impact of school-district governance characteristics, which include board and management entrenchment and budget and audit committee expertise, on fiscal measures. Despite the significant influence school boards have over the determination and use of the bulk of property taxes, virtually no empirical research exists that examines the influence of school-district governance structures on fiscal outcomes. We find a positive association between board entrenchment and spending and find a negative association between budget and audit committee expertise and spending. The findings of this study confirm that governance structure matters for fiscal outcomes and recommendations are provided to support efforts to improve fiscal efficiency of school-district governance.

We investigate whether council audit committees relate to municipal fiscal policies. We find that municipalities with audit committees are associated with greater levels of own-source revenue, in that they finance municipal operations with locally raised revenues driven by charges and fees compared to municipalities without audit committees. Furthermore, municipalities with audit committees are associated with less new debt than those without audit committees, indicating more conservative use of external financing. Overall, our results are consistent with municipal audit committees, in addition to monitoring the financial reporting function, playing an advisory role in fiscal decisions, especially when the cost of local government to citizens is high.

This study aims to examine whether the presence of advisory directors affects firm discretionary accruals (DACC), a widely used proxy for financial reporting quality. The authors argue that the advisory director weakens the board monitoring role and impairs the firm financial reporting quality by increasing DACC.

The sample consists of listed firms on the Australian Stock Exchange from 2001 to 2015 using 7,649 firm-year observations. The authors perform descriptive statistics, regression and propensity score matching analyses to examine the research hypothesis.

The research evidence that firms with a higher presence of advisory directors have more DACC, indicating poor financial reporting quality. Furthermore, the authors categorize the DACC and find that the firm has higher income-increasing DACC in the presence of higher advisory directors. The findings are robust concerning endogeneity issues.

The research evidence that firms with a higher presence of advisory directors have more DACC, indicating poor financial reporting quality. Furthermore, the authors categorize the DACC and find that the firm has higher income-increasing DACC in the presence of higher advisory directors. The findings are robust concerning endogeneity issues.

The research contributes valuable insights for regulators and policymakers seeking to comprehend the implications of firms using more advisory directors. Additionally, the authors recognize the potential significance of the findings for the institution of directors, as they can provide a nuanced understanding of the specific roles played by advisory directors in organizational dynamics.

While the extensive body of literature on corporate governance and financial reporting quality has been well-established, a noticeable void exists in academic research delving into the relationship between advisory directors and DACC management. This study seeks to fill this gap, making a distinctive and original contribution to the existing literature on corporate governance.