Search results

This paper aims to examine the association between the working relationship between internal and external auditors and the moral courage of internal auditors to report management fraud in the Tunisian setting.

Data are gathered from 163 internal auditors working in Tunisian companies and a partial least squares–structural equation model (PLS-SEM) is used to test the hypothesis regarding the effect of the cooperation between internal and external auditors on internal auditors’ moral courage.

The results of this study provide strong empirical support for the positive impact of the working relationship between internal and external auditors on internal auditors’ moral courage to report management fraud and unethical behaviors.

The reported results increase the awareness of Tunisian regulators to enact regulations that strengthen the collaboration between internal and external auditors to promote internal auditors’ moral courage and then limit fraud and improve organizational performance in the Tunisian setting.

This paper fills one of the major research gaps in internal audit and moral courage research streams by revealing that the courageous behavior of internal auditors can be fostered by specific means efficacy such as the working relationship between internal and external auditors.

While existing research explores the impact of audit market competition on audit fees and audit quality, there is limited investigation into how competition in the audit market influences auditors' writing style. This study examines the relationship between audit market competition and the readability of audit reports in Iran, where competition is particularly intense, especially among private audit firms.

The sample comprises 1,050 firm-year observations in Iran from 2012 to 2018. Readability measures, including the Fog index, Flesch-Reading-Ease (FRE) and Simple Measure of Gobbledygook (SMOG), are employed to assess the readability of auditors' reports. The Herfindahl–Hirschman Index (HHI) is utilized to measure audit market competition, with lower index values indicating higher auditor competition. The concentration measure is multiplied by −1 to obtain the competition measure (AudComp). Alternative readability measures, such as the Flesch–Kincaid (FK) and Automated Readability Index (ARI) are used in additional robustness tests. Data on textual features of audit reports, auditor characteristics and other control variables are manually collected from annual reports of firms listed on the Tehran Stock Exchange (TSE).

The regression analysis results indicate a significant and positive association between audit market competition and audit report readability. Furthermore, a stronger positive and significant association is observed among private audit firms, where competition is more intense compared to state audit firms. These findings remain robust when using alternative readability measures and other sensitivity checks. Additional analysis reveals that the positive effect of competition on audit report readability is more pronounced in situations where the auditor remains unchanged and the audit market size is small.

This paper expands the existing literature by examining the impact of audit market competition on audit report readability. It focuses on a unique audit market (Iran), where competition among audit firms is more intense than in developed countries due to the liberalization of the Iranian audit market in 2001 and the establishment of numerous private audit firms.

This study aims to understand independence in internal auditing by investigating how internal auditor independence is constructed when analysed in its corporate governance context.

A critical discourse analysis (CDA) of the corporate governance reports of Swedish large stock market listed non-financial companies, for three consecutive years, is undertaken, using a theoretical lens of organisational embeddedness and operational coupling to understand independence as a situated practice.

The study develops four archetypes of internal auditor independence – autarchic, instrumental, symbiotic and subservient – and discusses each archetype's implications for independence, related to tripartite relations with management and the audit committee, regarding who has the mandate to direct work and how the work is done. It finds that internal auditors always have a capacity to be independent. Although they are not independent in relation to agents in the subservient archetype, they are independent of those down the organisational chain of command, suggesting independence is both situational and relational.

The analysis contributes a novel approach to the literature and develops a conception of independence using the dimensions of embeddedness and coupling. The archetypes offer an analytical framework for future studies on independence.

Internal auditors may understand their practice differently through the archetypes that result from this study.

Internal auditors' power relations within corporate governance further an understanding of the pressures on internal auditors and their role.

This study contributes new knowledge on the situatedness of independence by showing how internal auditors are embedded and coupled helps build their independence.

This study aims to understand the behavior of internal auditors towards quality and analyze if some organizational and individual factors influence internal audit quality.

The sample is constituted by Portuguese internal auditors, and the methodology includes the use of partial least squares – structuring equation model (PLS-SEM) to test the hypothesis under study.

The results show that there is a negative relationship between reduced audit quality practices (RAQP) and organizational commitment and independence. The results found that time pressure positively affect RAQP. There is no evidence that perceived organizational support (POS) and risk profile are determinants of RAQP.

This work contributes by extending the literature about the determinants of internal audit quality, but also to the practice by understanding the factors that influence the behavior of internal auditors and by making recommendations that allow an improvement of the quality of internal auditing.

本研究擬瞭解內部審計師就保持內部審計質量所作出的行為，並探討是否有些組織或個人因素、會影響內部審計的質量。

研究的樣本由葡萄牙內部審計師構成，而研究方法則包括偏最小平方法的結構方程模型 (PLS-SEM) 的使用，以測試正在研究中的假設。

研究結果顯示、降低審計質量的慣常做法與組織承諾及獨立性是成負相關的; 研究結果亦顯示、時間壓力會對降低審計質量的慣常做法產生正面影響，沒有證據證實、組織支持感和風險概況是降低審計質量慣常做法的決定因素。

本研究的貢獻為、就研究內部審計質量決定因素的文獻方面、擴展了有關的學術探討; 研究亦對內部審計作出實務方面的貢獻，因研究結果幫助我們更瞭解影響內部審計師行為的因素，而且，研究人員提出了提升內部審計質量的建議。

內部審計質量、降低審計質量的慣常做法、組織決定因素、個人決定因素.

This paper aims to explore the impacts of remote auditing on auditors’ work and work-life balance.

This paper adopted a qualitative online survey approach using open-ended reflections from 98 highly experienced auditors. The survey design aligns with a “Big Q” approach to qualitative data. The reflections were interpreted through the theoretical lens of the social presence theory.

Auditors underscore that remote auditing has improved their work-life balance since it offers flexibility, greater autonomy and efficient use of time. However, they believe less social contact due to remote auditing can hurt their work.

This study aimed to holistically comprehend the concept of work-life balance in a remote auditing setting. Therefore, the study refrained from making comparisons based on demographic information (e.g. gender, experience and type of audit firm).

The findings highlight the need for adopting flexible work arrangements that prioritise auditors’ well-being. This is critical for making the audit profession attractive and enhancing overall audit quality. Updated regulatory guidance and controls are needed concerning the use of technologies in remote auditing to ensure high-quality audits.

The findings of this study can positively reshape public perception of the audit profession. Firstly, enhanced work-life balance can improve audit quality. Secondly, incorporating emerging technologies in auditing can result in society perceiving auditors as adaptive to innovation and technological advancement that has been touted for their potential for enhancing the efficiency and effectiveness of audit and audit quality, potentially enhancing societal trust in auditing.

The findings of this study complement the auditing literature that has mainly focused on the traditional work paradigm, requiring in-person presence. The authors identify potential challenges emanating from auditors’ remote work and propose solutions for audit firms to improve work-life balance in a remote work setting.

In this research, using an analytical framework on factors affecting the quality of auditing services, we consider factors that affect an expectations gap in providers and users of auditing services related to factors affecting auditing quality. Effective factors studied in this regard are professional features, including the professional role of individuals in the auditing process (auditors against preparers of financial statements), professional experience of individuals, professional rating and size of auditing firms. The first statistical society consists of certified public accountants (CPAs) working in the auditing organization and audit firms in Iran, and the second statistical society consists of all investment companies that operate under the supervision of the Tehran Stock Exchange Organization. Based on the results of the research, the role of professionals in the auditing process is not effective as an independent auditor or financial statements provider, as well as the professional experience of individuals in the expectations gap from factors affecting auditing quality, while the size and qualities of the auditing firms were influenced by the expectations gap of individuals in the field of auditing regulation.

The purpose of this paper is to examine the implications of the COVID-19 pandemic on internal auditing as the pandemic forced individual internal auditors and audit teams to conduct the work remotely.

Five in-depth semi-structured interviews of internal audit experts that work in German retail and manufacturing industry were conducted between February and April 2021.

The authors find that the importance of audit technologies did not change significantly due to the pandemic, as audit technologies were already an integral part of internal audits. Interestingly, the transition to remote audits occurred with remarkable speed and efficiency. The presence of well-functioning information and communication technologies emerges as a critical facilitator for effective remote communication, collaboration and data exchange. However, audit technologies can only partially replace physical on-site examinations and human interaction. The main challenges of remote audits are related to the auditing of non-digitalized processes and the inherent limitations of auditee interviews and interactions.

The authors' interview approach does not allow to cover variations between industries and between countries. While internal audit experts provided notably consistent responses during the interviews, acknowledging that the sample size is very small is important.

The COVID-19 pandemic serves as a catalyst for increased digitalization and technology adoption within the realm of internal auditing. A hybrid approach combining the benefits of on-site and remote audits is expected to prevail in the future.

The paper is among the first to document the effects of the COVID-19 pandemic on the work of internal auditing using field-based research methods.

The research aims to test the links amongst Meyer and Allen's three levels of organisational commitment and the commitment's effect on reducing turnover intentions for Islamic bank (IB) employees during the lockdown caused by coronavirus disease (COVID-19).

The research follows a variable-centred approach. Primary data are collected through a survey of 324 respondents comprising IB employees from three Arab countries, notably the United Arab Emirates (UAE), Lebanon and Oman. Exploratory factor analysis (EFA) and Cronbach's alpha test are conducted to test the construct validity, reliability and internal consistency of collected data. Descriptive statistics are used to interpret the data. Zero-order correlations, multiple regression analysis and Fisher's Z-test are applied to assess the interrelations of the various groups of variables and the determinants of turnover intentions.

Results show that there is a high level of significant intercorrelation amongst affective, normative and continuance commitments as well as amongst organisational commitment, individual differences and turnover intentions for IB employees from the three studied Arab countries. The results confirmed that turnover intentions are minimised in the presence of all three organisational commitment subscales and that individual differences amongst IB employees and organisational efficiency moderate the relationship between organisational commitment and turnover intentions.

There is no empirical work that has been done on the determinants of turnover intentions amongst IB employees during the lockdown. This is valuable to organisational behaviour scholars and practitioners who are interested in the role that organisational commitment plays in IB's employment behaviour.

This study is designed and directed to analyze the effect of board characteristics and audit committee attributes on the firm performance of publicly listed commercial banks of Bangladesh.

Thirty publicly listed commercial banks of Dhaka Stock Exchange (DSE) have been taken as sample for this study. Data have been collected from annual reports between 2011 and 2017 of the assessed banks. Pooled OLS model has been used for running regression model of this study.

Board independence has a negative and significant relationship with ROA and Tobin's Q. However, Board Independence has a positive and significant relationship with Stock Return. On the other hand, Board Diversity has a negative and significant relationship with ROA and ROE, which implies inefficiency of diversified board members in the context of Bangladesh. Family duality has a positive and significant relationship with ROA and a negative and significant relationship with Stock return. Board Meeting has a positive and significant relationship with ROA. Audit Committee Size has a negative and significant relationship with Tobins' Q. Independence of audit committee chairman has a negative and significant relationship with Tobin's Q and Stock Returns. Presence of non-executive directors and number of audit meetings have no significant relationship with any of the predicted variables.

Among all variables of the board characteristics, role of independent directors and participation of female directors have conflicting results in this study. This has raised a question about the fair appointment independent directors and their objective view on the board. Female directors' role is not convincing in the context of Bangladesh as most of the commercial banks are family-owned. Policymakers can tighten and supervise the appointment of independent directors to ensure good governance in the banking sector. Moreover, role of audit committee and independence of audit committee chairman have generated conflicting results in terms of market-based performance measure.

Banking sector of Bangladesh experiences huge corruption in the form of excessive NPLs and poor management quality which results in low profit for the firm. This study has explored the problems of management quality and flaws of audit committee which is hampering overall growth of banking industry. Improvement of independent directors' appointment and audit committee formation and reporting will certainly help banking industry of Bangladesh to improve overall performance.

The purpose of this paper is twofold: first, to investigate the relationship between some characteristics of corporations including firm size, financial leverage, profitability, firm age and the type of industry with social responsibility disclosure of firms listed on Tehran Stock Exchange (TSE); and second, to study the association between the level of corporate social responsibility disclosure (CSRD) and some of the audit variables such as audit fees, audit tenure and audit firm’ size.

The study population consists of 125 firms listed on the TSE during the years 2010–2015. Following Salehi et al. (2017), content analysis is used to measure the level of social responsibility disclosure, and hypotheses are performed using multiple regression analysis and R software.

The results represented that there is a positive significant relationship between a firm size and a firm age with the level of CSRD. However, there is a negative significant association between financial leverage and profitability with the level of CSRD. Given that CSRD is different among various industries and the type of industry can be an influential factor in CSRD, an industry type’ variable in the fourth hypothesis is of a type of index variable and has eight levels, of which the first level is ranked as the base level. Our findings showed that the level of CSRD at industries of machinery and appliances, production of metal products, food and beverage products, and textiles is lower than the baseline level (pharmacy). Nevertheless, companies in the fifth industry (mineral products) have a higher level of CSRD in comparison with the pharmacy industry. Moreover, the authors find that there is a significant positive connection between audit fees and CSRD. This implies that Iranian managers in an inflationary economy probably manage earnings when they provide more CSRDs, which leads to increase in the audit risk and audit fees.

Needless to say, the findings of this paper will have practical implications for investors, auditors and other users of financial statements. First of all, this study will aware them of the fact that when a country faces economic sanctions and most of its companies are in financial strain investors should not consider the firms engaging in corporate social responsibility activities to behave morally and provide transparent financial reports. Second, the results will convince auditors to be conservative toward the firms that are financially distressed, for audit risk of them will be high. Thus, policymakers should be cautious concerning directors’ opportunistic actions and increase monitoring to enforce social obedience.

The turning point of this research is related to the time period of research related to firms that have faced severe financial problems due to economic sanctions. In fact, the study revealed another aspect of CSRD that could have negative consequences when managers are in financial strain and take opportunistic actions.