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Book part
Publication date: 15 June 2022

Zaozao Zhao

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…

Abstract

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.

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Auditing Practices in Local Governments: An International Comparison
Type: Book
ISBN: 978-1-80117-085-7

Keywords

Book part
Publication date: 28 December 2006

Christopher Humphrey, Peter Moizer and Stuart Turley

This paper reviews key aspects of the regulatory response in the UK and the USA to the apparent crisis of confidence in auditing stimulated by Enron and other recent corporate…

Abstract

This paper reviews key aspects of the regulatory response in the UK and the USA to the apparent crisis of confidence in auditing stimulated by Enron and other recent corporate scandals. Drawing on a consideration of the nature of the market for auditing services and the regulatory and corporate governance structures in which auditing is embedded, the paper argues that the bulk of recent regulatory attention appears to have been on matters of auditor independence rather than auditor competence. Such a focus is seen to have parallels with former ‘crisis’ eras in the auditing arena, while the analysis presented also raises questions about the status of the auditing function within accounting firms and the capacity of regulatory reform to deliver a fundamentally enhanced auditing function. The paper concludes by stressing the importance of making more transparent what is being done in the name of auditing and audit regulation.

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Independent Accounts
Type: Book
ISBN: 978-0-76231-382-2

Book part
Publication date: 18 January 2021

Yusuf Kaya and Mehmet Utku

Financial crises in the international markets, which have global effects, have increased the importance of internal auditing especially in the banking sector in recent years…

Abstract

Financial crises in the international markets, which have global effects, have increased the importance of internal auditing especially in the banking sector in recent years. Minimizing the negative effects of crises is closely related to the establishment and functioning of an effective internal control system. International internal audit standards (IIAS) issued by the International Internal Audit Standards Boards are internationally applicable standards that contain the basic requirements for the professional implementation and evaluation of the effectiveness of internal auditing. In developing countries where the effects of crises are intensely felt, public banks are one of the most important actors of the financial system. An effective internal control structure in public banks and in compliance with international standards is necessary for a strong and fragile financial system. The purpose of this study is to examine the internal audit activities in public banks in terms of compliance with international standards. In this study conducted at one of the leading state-owned bank in Turkey, the bank’s internal control procedures and internal control activities reports were examined. In addition, the Bank’s internal audit activities were analyzed by conducting interviews with bank officials for a better understanding of the internal control system. The IIAS, which are grouped under two main headings, are related to the internal audit activities of the related bank. It is thought that the study will guide banks and auditors in terms of demonstrating the application of IIAS, which usually consist of abstract statements.

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Contemporary Issues in Public Sector Accounting and Auditing
Type: Book
ISBN: 978-1-83909-508-5

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Book part
Publication date: 18 January 2021

Esra Atabay

On the one hand, the auditing of the public hospitals regarding their financial information is carried out by the State Audit Court which is the Supreme Auditing Institution in…

Abstract

On the one hand, the auditing of the public hospitals regarding their financial information is carried out by the State Audit Court which is the Supreme Auditing Institution in our country, on the other hand it is carried out by the auditors of the Ministry of Health. While the audits made by the Ministry of Health are generally about compatibility and medical controls, the financial information of the hospitals needs to be made by the external independent auditors and their impact on the general budget needs to be determined.

In this study, the subject matter of financial auditing has been elaborated on within the specificity of the public health sector and evaluated as to whether the conducted auditing is effective in determining the mistakes in the financial information of the organizations. For the purpose of conducting the evaluation, the six-year auditing reports between the years of 2012 and 2017 of the Supreme Auditing Institution (State Audit Court) conducting the financial auditing of the public health sector regarding the Public Hospitals Administration of Turkey (Türkiye Kamu Hastaneleri Kurumu). The auditing reports are addressed within the framework of the types and numbers of findings determined by the State Audit Court, the responses that the Public Hospitals Administration of Turkey has given against those findings and the opinion of auditing. In the consequence of the conducted evaluation, it was concluded that the Court of Accounts was effective in determining the mistakes in the financial reports and increasing the correctness and reliability of the financial information of the Administration.

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Contemporary Issues in Public Sector Accounting and Auditing
Type: Book
ISBN: 978-1-83909-508-5

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Abstract

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Quality Control Procedure for Statutory Financial Audit
Type: Book
ISBN: 978-1-78714-226-8

Book part
Publication date: 27 October 2016

James C. Lampe, Andy Garcia and Kerri L. Tassin

This article is the third in a trilogy of articles that discuss the professionalism (or deprofessionalism) of the accounting profession. The first examines the slow uphill climb…

Abstract

This article is the third in a trilogy of articles that discuss the professionalism (or deprofessionalism) of the accounting profession. The first examines the slow uphill climb of accounting and auditing practice to the level of being recognized as a highly trusted profession. The second examines the stagnation in professionalism leading to deprofessionalization of the accounting profession. This third article looks at the resulting directionless efforts of accounting and auditing firms in the wake of major deprofessionalization events. The interest in this study is the time period immediately following the passage of the Sarbanes–Oxley Act (SOX) of 2002 which is described in this paper as the “Post-SOX” history of public accountancy in the United States. During this time period, nearly equally mixed activities of professionalism and deprofessionalism have resulted in a status quo with directionless efforts doing little if anything to reverse decline in professionalism. Public accountants continued to experience conflict with the Securities and Exchange Commission (SEC) over independence rules. The large Certified Public Accountant firms generated controversies and squabbles concerning “auditing and consulting,” while at the same time they faced questions regarding the marketing and selling of aggressive tax shelters. In addition, most of the self-regulating aspects of the profession declined dramatically following passage of SOX. While initially both tax fees and audit fees of CPA firms increased during this time period, concerns are again arising as the large CPA firms more recently have renewed the emphasis on advisory services. While revenues have both increased and changed in composition during the post-SOX era, public opinion has maintained a status quo. The post-SOX era has also seen a weakening in the Code of Conduct, providing more liberties for CPAs to maximize self-interest. Meanwhile, the PCAOB faced constitutional challenges, while at the same time the AICPA experienced strong divisions in its membership. To provide some sense to these directionless efforts, this study, similar to the prior two articles in this trilogy, concludes with a summary analysis based on the nine SOCRECELIST criteria, and the question whether public accountants have learned their history lesson.

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Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-78560-973-2

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Book part
Publication date: 28 December 2006

Robin W. Roberts

The purpose of this essay is to discuss the involvement of the U.S. public accounting profession in federal politics and to focus attention on the extent to which the profession…

Abstract

The purpose of this essay is to discuss the involvement of the U.S. public accounting profession in federal politics and to focus attention on the extent to which the profession engages with federal legislators and other policymakers to influence public policy. In the essay, I discuss and present evidence regarding the profession's use of political strategies such as making political campaign contributions and lobbying federal legislators and regulators. The profession's political efforts are then examined within the context of their self-proclaimed commitment to the public interest. I conclude that the public accounting profession's extensive involvement in federal politics works principally to protect its own professional interests and favors conservative, pro-business agendas. As a result, broader public interest responsibilities are often neglected. Although the profession deserves the right to participate in public policy debates, its parochial and patronage orientation does not resonate well with its self-proclaimed professional cornerstones of independence and integrity.

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Independent Accounts
Type: Book
ISBN: 978-0-76231-382-2

Book part
Publication date: 17 July 2014

Kamil Omoteso and Musa Obalola

This chapter adopts Porter’s ‘audit trinity’ approach comprising internal audit, external audit and audit committee to discuss the role auditing can play in the management of…

Abstract

Purpose

This chapter adopts Porter’s ‘audit trinity’ approach comprising internal audit, external audit and audit committee to discuss the role auditing can play in the management of corporate fraud.

Design/methodology/approach

The chapter maps the historical background of and the developments in external audit as an assurance service, the internal audit function and the audit committee. Based on this, it explains the nature, types and possible causes of corporate fraud within the context of business risk with a view to establishing how auditing can help in managing such frauds.

Findings

The chapter highlights the relationships that should exist between the three audit types in order to support a sound internal control system as a tool for preventing and detecting corporate fraud.

Research limitations/implications

The chapter identifies cost, opportunity, connivance and managerial override as factors that could limit the ability of auditing to manage corporate fraud. It also suggests ways of addressing these limitations.

Practical implications

As the current upward trend in IT adoption for corporate operations continue to open new sets of corporate fraud windows, this chapter examines how an entity’s internal controls can be used to prevent and detect these growing fraud schemes.

Originality/value

The chapter’s unique strength is its adoption of a holistic approach to auditing to suggest ways of managing corporate fraud – a novelty in the corporate fraud literature. It is hoped that future research in the area will bring empirical insights to the issues raised and perspectives covered in the chapter.

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Ethics, Governance and Corporate Crime: Challenges and Consequences
Type: Book
ISBN: 978-1-78350-674-3

Keywords

Book part
Publication date: 10 February 2020

Glen Borg, Peter J. Baldacchino, Sandra Buttigieg, Engin Boztepe and Simon Grima

This study challenges the conventional theoretical approach of the ‘Three Lines of Defence’ Model adopted by most of the Maltese credit institutions. The authors propose a…

Abstract

This study challenges the conventional theoretical approach of the ‘Three Lines of Defence’ Model adopted by most of the Maltese credit institutions. The authors propose a paradigm shifting conceptualised framework that would alter the corporate governance structures of banks. The objective is to test the feasibility and willingness of credit institutions to adopt such an approach.

This study challenges the current practices of the internal auditing profession and organisations and invites them to evaluate their structures whilst recognising the benefits of adopting a combined assurance function.

In order to test this hypothesis, the authors sought out semi-structured interviews with controllers (Internal Auditors, Risk Managers and Compliance Officers) within Maltese Credit Institutions, varying in size from significant, medium-sized and small institutions; personal from the Malta Financial Services Authority – The regulator, the Big four audit firms and members of the Malta Forum of Internal Auditors, and practitioners working both within and outside the financial industry.

There were two contrasting opinions regarding the suggested proposition. On the one hand, those operating within the credit institutions, as well as the regulator and the external auditors, do not believe that the proposition of integrating risk, compliance and internal audit functions (IAF) in one team would be possible; the reason being that independence, which is the cornerstone of every IAF, would be severely impacted. On the other hand, there were those practitioners working outside the banking industry but with sufficient experience and knowledge in the field, who challenged the traditional concept of independence. They argue that the functions should not be separate from each other because they have much in common.

Four themes emerged from the study: (1) challenges as a concept, (2) benefits, (3) risks and (4) condition for successful implementation. All interviewees, from risk departments, boards, external auditors and regulators agree that a strong, knowledgeable and independent IAF is fundamental to every organisation but more so within the financial industry. Nevertheless, this study revealed two schools of thought that emerged from the findings in relation to the IAF and its regulation, and specifically, when the authors presented the proposition of an integrated function.

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Contemporary Issues in Audit Management and Forensic Accounting
Type: Book
ISBN: 978-1-83867-636-0

Keywords

Abstract

Details

Quality Control Procedure for Statutory Financial Audit
Type: Book
ISBN: 978-1-78714-226-8

1 – 10 of over 3000