Search results

An increasing number of earnings restatements along with many allegations of financial statement fraud committed by high profile companies (e.g. Enron, WorldCom, Global Crossing, Adelphia) has eroded the public confidence in corporate governance, the financial reporting process, and audit functions. The Sarbanes‐Oxley Act of 2002 was an attempt to regain confidence and trust in corporate America and the accounting profession. The Act addresses corporate scandals and the perceived crisis in the auditing profession. Some of its provisions relate to the audit committee oversight function over corporate governance, financial reporting, internal control structure, internal audit functions, and external audit services. This study examines three types of audit committee disclosures: the annual report of the audit committee; reporting of the audit committee charter in the proxy statement at least once every three years; and disclosure in the proxy statement of whether the audit committee had fulfilled its responsibilities as specified in the charter. This study conducts a content analysis on audit committee disclosures of Fortune 100 companies.

This paper aims to analyze Public Companies Accounting Oversight Board (PCAOB) inspection reports on audit reports of those inspected accounting firms in Brazil, Russia, India and China (BRIC). In meeting the requirements of the Sarbanes-Oxley Act, the PCAOB conducts inspections on audit reports of firms listed on the New York Stock Exchange.

The reports include those submitted by both the US audit parent firms and their secondary firms located outside the USA. In each PCAOB report, it unravels the nature of audit deficiencies. The focus is on Big Four because they play a dominant role in the marketplace and issuers’ market capitalization. All the seven-year deficiencies are documented since publications of the reports from 2004 to 2012.

Of the 37 reports, 19 (51 per cent) were issued relating to audits conducted by the Big Four. Out of these 19 reports, 10 (53 per cent) contain inspection criticism. These include audit quality and common recurring audit deficiencies.

This paper is based solely on those inspection reports published by the PCAOB.

The findings have significant implications to audit firms and the audit profession on improving audit quality, firms’ internal control and reports.

No known prior research paper is available on the ramifications of the PCAOB’s inspection reports relating to BRIC.

Describes how audit reports issued by the General Accounting Office (GAO) can be used to teach internal auditing students not only about audit reports, but the wide subject‐matter examined by internal auditors. Audit reports are available free from the GAO. Details how students learn by comparing the GAO reports with the recommendations in textbooks and journal articles.

The Centre for Reviews and Dissemination was commissioned to conduct a systmatic review of clinical audits undertaken to assess the implementation and effectiveness of the National Health Service (NHS) two‐week waiting time policy for cancer referrals in England and Wales. This paper highlights the logistical difficulties experienced by the review team in trying to obtain information from the NHS, and discusses what needs to be done in order to improve the reporting and usefulness of clinical audit reports.

A total of 650 key individuals within NHS Trusts and Strategic Health Authorities were contacted for copies of relevant audits. Other key individuals and organisations across the NHS were also contacted, web sites of key organisations searched, requests for audits on relevant e‐mail discussion lists posted and electronic databases and conference proceedings searched.

Finds that many trusts do not appear to hold a centralised record of what clinical audits have been performed within the trust. In many instances several follow‐up contacts were necessary. The majority of included audits were poorly reported, with fewer than half providing sufficient detail on methodological aspects for the audit to be reproducible.

There should be a system of recording ongoing and completed audits conducted within the NHS, to ensure that audit reports are produced and accessible. The NHS needs to make sure that not only are appropriate audit methods used but that audit reports are written up in sufficient detail to allow the reader to ascertain how the audit was conducted and to assess the validity of the results. Documentary evidence of action plans would make it easier for those not directly involved in the audit to assess if, and in what ways, the audit findings are being acted upon to improve existing practices and procedures.

This paper discusses what needs to be done in order to improve the reporting and usefulness of clinical audit reports.

Conducting an audit is an input. Gaining effective action on the findings is an output. Auditors need therefore to involve their clients more in the total process.

It is clear that the trend toward measuring and managing greenhouse gas (GHG) emissions on a global scale is not slowing, even though different countries and geographic regions are approaching the issue with different points of view and different levels of vigor. Along with an increase in measuring and managing GHG emissions, enterprises around the world should expect to see a higher level of independent assurance and audit reporting needed. The purpose of this paper is to identify and discuss the challenges and opportunities that accompany GHG emissions accounting and auditing, as well as the supply chain and operational dependencies that are different from traditional financial auditing.

This paper explores the challenges and opportunities from measuring and auditing GHG emissions, and contrasts audits of sustainability information with more traditional financial auditing. It also explores some of the issues in supply chain and operational dependencies that are important in measuring and auditing GHG emissions and are different from more traditional accounting practices.

With the importance of processes to independently audit GHG emissions and natural resource consumption expected to grow in the future, it is important to understand how past experience with financial accounting and auditing can play a role in shaping the future for environmental stewardship. This paper shows that there are a number of key differences between financial and carbon auditing, which must be considered as enterprises begin to consider how to best support increasingly important sustainability reporting. As more publicly traded firms voluntarily issue sustainability reports and new legislation drives a greater need for standardized carbon accounting, so too will the need for auditing GHG emissions grow. This paper explains that GHG auditing will require cross‐functional skills with operational and process knowledge, accounting capabilities and an understanding of how operational data correlates with estimates for GHG emissions.

Much existing work addresses why, where, how, and who should be measuring and managing GHG emissions, but little attention is being given to the unique challenges that must be overcome in order to achieve reporting transparency. Independent auditing of GHG emissions has maintained a low profile while reporting is voluntary and standards are not fully agreed upon. However, with the possibility of legally binding legislation on the horizon, enterprises that are prepared to audit their GHG emissions and resolve issues early will be well positioned from both a compliance and market‐competition perspective.

Examines the influence of various audit firm and client characteristics on compliance with Generally Accepted Auditing Standards’ (GAAS) reporting standards for private sector audits performed by small audit firms. Because prior studies in this area have focused on public sector audits, an important contribution of this study is the use of an observable quality measure as the dependent variable on audits performed in the private sector. Obtains data for the study from the quality reviews of firms licensed to practise in the State of Arkansas during the years 1989‐1991. Suggests that audit fees, the complexity of the engagement and membership in the state Certified Public Accountants’ society are positively related to compliance with GAAS reporting standards on private sector engagements performed by small audit firms. In addition, firm size is negatively related to compliance with GAAS reporting standards on private sector engagements performed by small audit firms.

This paper aims to explore the potential effect of key audit matters (KAM) on the audit report lag (ARL). In particular, it aims to discover whether the number of KAMs reported by an audit firm in Jordan is related to the length of its ARL.

The authors analysed data from the first three years of KAM reporting in Jordan (2017–2019) for 194 public listed Jordanian companies to examine the relation between the number of KAMs and the ARL, taking into account several control variables related to the Jordanian context.

This study found that there is no statistically significant relation between the number of KAMs reported by Jordanian audit firms and their ARLs, suggesting that the KAM reporting in Jordan is somewhat superficial, with the selection of what is actually reported as a KAM not directly related to the efforts needed to deal with its concerns. However, this study also found statistically significant positive relations between the ARL and each of audit fees, audit firm size, the issuance of a qualified audit opinion and company leverage and a statistically significant negative relation between the ARL and company profitability.

This is one of the very few studies to cover the potential relation between KAM reporting and the ARL. In a developing country context characterised by limited demand for an external audit of high quality, this study finds that auditors may decouple on their reporting of KAMs by not actually making significant efforts to deal with them.

The purpose of this study is to examine the relationship between auditing/non-auditing and accounting timeliness among Swedish private firms.

This paper uses regression analysis to test the relationship between auditing and two measurements of timeliness; lead time and late filing. The sample consists of Swedish private firms.

This paper finds that audited firms, when compared with unaudited firms, are significantly less timely. Moreover, greater profitability was associated with more timeliness but only for audited firms. The results of this paper also show that firms being audited by a big 4 auditor are significantly timelier than firms being audited by a non-big 4 auditor.

The findings in this paper suggests that one aspect of accounting quality, timeliness, does not seem to benefit from auditing in a Swedish context. There is a debate about whether the threshold levels in Sweden should be raised so that more firms voluntarily can opt out of audit. Those opposing a raised threshold level claim that auditing has positive effects on accounting quality and consequently that a raised level would have adverse effects. The findings in this paper do not support such a claim.

Little is known about timeliness in private firms compared to public firms and this paper fills that void. Contrary to prior research, findings show that unaudited firms in a Swedish regulatory setting actually are timelier than their audited counterparts. This questions one of the (presumed) benefits of auditing and should stimulate more research on this issue.

The present study aims to assess the impact of narcissism, self-confidence and auditor's characteristics on audit report readability for companies listed on the Tehran Stock Exchange.

The study’s statistical population comprises firms listed on the Tehran Stock Exchange. The present research used a systematic elimination method, and 1,162 firm-year observations were obtained for seven years from 2012 to 2018. Three variables including auditor tenure, audit fee and audit specialization are used for measuring auditing features. The Fog index is used as a proxy for measuring audit report readability. In addition, in this paper, four regressions, including fixed effects, random effects, pooled and T+1, are used to estimate reliable coefficients.

The findings show a negative and significant relationship between auditor’s characteristics (tenure, fee and specialization) and audit report readability. Moreover, the variables of the auditor’s narcissism, self-confidence and mandatory auditor change have a positive and significant association with audit report readability. This study lends support to the theories of personality disorder and behavioral decision.

Since narcissism and self-confidence are two characteristics that shape an individual’s character and personality, some involved behavioral factors in auditors’ characteristics contribute to their decisions. The effects of these should be detected to enhance the decision-making process. The said factors significantly impact audit report readability. Hence, this paper attempts to assess the effect of the said factors on audit report readability.