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1 – 10 of over 4000Md. Kausar Alam, Abu Umar Faruq Ahmad, Mezbah Uddin Ahmed and Md. Salah Uddin
The study explores the existing Shariah audit practice of Islamic banks (IBs) in Bangladesh aiming at providing suggestions for improvements on the detected shortfalls in the…
Abstract
Purpose
The study explores the existing Shariah audit practice of Islamic banks (IBs) in Bangladesh aiming at providing suggestions for improvements on the detected shortfalls in the relevant areas.
Design/methodology/approach
This research applied a qualitative method, and data were collected through conducting semi-structured interviews in Bangladesh. A total of 17 interviews were conducted for accomplishing the research objectives.
Findings
The study finds that there is no comprehensive Shariah audit manual in the current operation for IBs in Bangladesh, and as such, the requirements of their Shariah compliance remain a big question. Although the Shariah audit is conducted within IBs, and the Shariah audit officers or Shariah officers inspect necessary documents while conducting the Shariah audit, they only cover 10–20% of total investments and transactions. Based on the findings of this study, it is recommended that the Shariah auditing tasks should broadly cover at least 80% of the investment portfolios, documents and financial contracts and activities.
Research limitations/implications
The findings of this research are expected to significantly contribute to the regulatory authorities concerned in Bangladesh and beyond, which include the suggestions that IBs can adopt to strengthen their Shariah governance system. The study also pinpoints that in the current system, Shariah auditors' roles are somehow limited in examining and checking the investment sides with a minimal portion (10–20%), for which they are unable to perform their responsibilities in a befitting manner to provide assurance services and overall Shariah compliance of IBs activities.
Practical implications
This study explores the current Shariah audit systems and provides recommendations to improve the existing systems which will be beneficial for Islamic banks of Bangladesh.
Originality/value
To the researchers' knowledge, perhaps this is the first research of its kind which seeks to explore the current Shariah audit practice in Bangladesh qualitatively, and it provides some practical suggestions for making the necessary developments of the current audit process of IBs. In addition, there are no empirical studies in the entire Emerald insight publishers and Scopus database regarding Shariah audit practices. The study contributes to the agency, stakeholder and legitimacy theories by exploring the Shariah audit of IBs.
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During a pandemic, with businesses implementing social distancing protocols and work-from-home strategies, the use of continuous controls monitoring (CCM) may add value to the…
Abstract
Purpose
During a pandemic, with businesses implementing social distancing protocols and work-from-home strategies, the use of continuous controls monitoring (CCM) may add value to the internal audit function. This study aims to examine the use of CCM technologies and the impact on the internal audit function during a pandemic.
Design/methodology/approach
This study adopted a case study approach for this study because it focuses on questions of “how” and “what.” Case studies provided an opportunity for an in-depth analysis of the phenomena being investigated. Semi-structured interviews were used to collect data. This study did not use sampling. Instead, multiple case studies were used for data collection.
Findings
Based on the findings, this study makes several contributions to the literature, for example, in health-care evidence suggests the pandemic has caused internal audit to focus on risk areas. Other industries, such as retail, have invested in CCM. However, in all cases, education and preparedness (or the lack thereof) appeared to significantly influence uptake of CCM. Organizations that made prior investments in CCM technologies experienced greater acceptance in the face of changing demands. Training in emerging technologies is a key competency in supporting audit operations in changing environments.
Research limitations/implications
As the study was conducted with a small sample of cases, findings cannot be extrapolated nor generalized beyond the case study organizations.
Practical implications
This study found that several factors limit adoption, exploitation and further development of CCM technologies, such as lack of top management support, acceptance of CCM technologies and suitable education and training of internal audit staff.
Originality/value
This study addresses the issue of the value that CCM offers organizations and whether it is a silver bullet that the internal audit profession needs, particularly when physical access to organizations may be restricted. The COVID-19 pandemic placed considerable focus on digital access. Better IT systems and more data will allow organizations to better support employees, inform strategic and financial decisions and engage stakeholders. During the recovery phase, leveraging investments in CCM technologies will contribute to internal audits’ ability to help clients to manage organizational risk.
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Juma Bananuka and Stephen Korutaro Nkundabanyanga
This study aims to examine the contribution of audit committee effectiveness (ACE), internal audit function (IAF) and firm-specific attributes to internet financial reporting…
Abstract
Purpose
This study aims to examine the contribution of audit committee effectiveness (ACE), internal audit function (IAF) and firm-specific attributes to internet financial reporting (IFR). It also seeks to understand which ACE and IAF attributes contribute to variances in IFR.
Design/methodology/approach
Data are collected through a questionnaire survey of 40 financial services firms.
Findings
The analysis shows that ACE and IAF significantly contribute to positive variances in IFR. It also shows that among the firm-specific attributes, only capital structure significantly contributes to positive variances in IFR. Audit committee meetings and authority contribute significantly to positive variances in IFR unlike audit committee expertise and independence. In terms of the IAF attributes, the risk management role and the regulatory compliance role contribute significantly to positive variances in IFR as compared to the governance processes role and evaluation of the internal control role.
Originality/value
This study enhances our understanding of the relationship between ACE, IAF, firm-specific attributes and IFR in an environment where IFR is not mandated and where corporate governance practices are very much in infancy. This is especially so given that for the first time, to the best of the authors’ knowledge, the contribution made by ACE, IAF and firm-specific attributes in IFR using evidence from an African developing country (Uganda) is now documented in a single study.
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Muhammad Iqmal Hisham Kamaruddin, Zurina Shafii, Mustafa Mohammed Hanefah, Supiah Salleh and Nurazalia Zakaria
This study aims to explore the current Shariah audit practices in zakat and waqf institutions in Malaysia.
Abstract
Purpose
This study aims to explore the current Shariah audit practices in zakat and waqf institutions in Malaysia.
Design/methodology/approach
A focus group discussion (FGD) with 38 zakat and waqf officers from 17 different zakat and waqf institutions in Malaysia was conducted. For reporting purposes, this study used a single-case study approach. The FGD was conducted and completed at the end of June 2021 via an online approach through Microsoft Teams.
Findings
The finding highlights the existing Shariah governance practices especially in terms of Shariah supervision roles, Shariah audit implementation in terms of Shariah audit scopes and common findings, Shariah audit competency, Shariah audit effectiveness especially the need for external Shariah audit function and Shariah audit issues and challenges faced in the implementation of Shariah audit practices.
Practical implications
The study findings and recommendations are useful for zakat and waqf institutions as well as the State Islamic Religious Councils to enhance Shariah audit practices in Malaysia.
Originality/value
This study is among the pioneer studies that explore Shariah audit practices in zakat and waqf institutions in Malaysia.
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Li Jen He and Faradillah Amalia Rivai
This paper aims to investigate the impact of gender diversity in the composition of engagement auditors on the disclosure of key audit matters (KAMs) in a dual-signature…
Abstract
Purpose
This paper aims to investigate the impact of gender diversity in the composition of engagement auditors on the disclosure of key audit matters (KAMs) in a dual-signature environment.
Design/methodology/approach
The authors used the unique institutional setup of Taiwan, where the law requires that audit reports be signed by two audit partners. The authors examined the effect of gender diversity composition among engagement auditors on KAM disclosure, considering behavioral differences between female and male auditors.
Findings
The empirical results indicate that gender diversity composition in the dual-signature environment is associated with the number of disclosed KAM items (KAMIT) and the length of the explanations for each KAMIT. Furthermore, the authors found that gender diversity composition, particularly when led by female audit partners, has a more pronounced impact on the explanation of each KAMIT rather than on the disclosure of KAMIT. The authors also noted that the moderating effect of audit firm specialization does not influence the gender diversity composition of audit partners in disclosing KAMs.
Originality/value
This study’s empirical findings demonstrate that the interaction between different gender compositions in a dual-signature environment influences KAM disclosure.
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Abhishek N., Neethu Suraj, Habeeb Ur Rahiman, Nishad Nawaz, Rashmi Kodikal, Abhinandan Kulal and Keerthan Raj
The study aims to analyse the role of digitisation in accounting in enhancing the overall effectiveness of accounting functions. To achieve this, the study provides empirical…
Abstract
Purpose
The study aims to analyse the role of digitisation in accounting in enhancing the overall effectiveness of accounting functions. To achieve this, the study provides empirical evidence from the stakeholder’s perspective of digitisation of accounting, auditing, reporting and regulatory compliance procedures.
Design/methodology/approach
The study has applied a quantitative approach to identify the thoughts of auditors, accountants and academicians on the impact of digitalised accounting applications on accounting functions. The data was collected by administering an empirical study and a sample of 482 professionals from the accounting, auditing and academic sectors. To analyse and interpret data descriptive statistics, structured equation modelling and mediation analysis has been used.
Findings
The finding of the study signifies the relevance of digitalised accounting applications in accounting functions and reveals that there is a significant impact of digitalisation on accounting, auditing, reporting and regulatory compliance aspects of accounting functions. The outcome of the study explores that a digitalised accounting system reduces possible errors and improves the accuracy and transparency of the system.
Research limitations/implications
The study highlighted the importance of developing new methods and techniques that can be used in practice. This indirectly advocates the inclusion of such concepts in accounting curricula to emphasise the need to understand the challenges and opportunities created by digitisation. Furthermore, the study will become a motivation to scholars who intend to explore different areas through which new technologies can be adopted to transform traditional accounting systems.
Practical implications
The contributions of the current study have implications that the adoption of digitised accounting enhances economic efficiency through a reduction in accounting costs, and enhanced accuracy that leads to the elimination of penalties and litigations for non-compliance with regulatory authorities. This indirectly impacts positively on the financial health of the business organisations and economies at large. This implication becomes greater evidential support to the organisations which are yet to plan the adoption and implementation of digital tools in their organisation for accounting functions.
Originality/value
Digitalisation is a relevant part of the accounting function to improve efficiency and accuracy. Since accounting and auditing practitioners struggle to control the accuracy and efficiency of transactions. Furthermore, the outcome of the study assists organisations in gaining real-time access to financial data, transforms workflows and empowers management to make timely informed sound decisions, optimise resource allocation, efficient regulatory compliance and so on.
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In the fourth industrial revolution, where business accounting integrates with automation through artificial intelligence (AI) and information communication technology (ICT)…
Abstract
Purpose
In the fourth industrial revolution, where business accounting integrates with automation through artificial intelligence (AI) and information communication technology (ICT), auditors must be able to access and analyze vast data and information to identify potential risks and issues. Using data analytics and AI to study significant amounts of data linked to audits, this study aims to investigate auditing practices by leveraging ICT and AI to enhance the audit process.
Design/methodology/approach
Bibliometric and quantitative research techniques have been used in the study’s mixed-method process. The theoretical underpinnings of AI have been investigated using the bibliometric research method, and the challenge of implementing ICT-enabled auditing practices among auditing professionals has been studied using the quantitative research method. Surveys, interviews and bibliometric analysis have all been used as data-gathering techniques.
Findings
Research in AI and auditing has a broad worldwide scope, involving developed and developing nations. ICT perceived benefits have no direct effect on auditing practices. However, ICT training has a mediating effect on the relationship between ICT perceived benefits and auditing practices. ICT adoption has no moderating effect on the relationship between ICT training and auditing practices.
Research limitations/implications
Findings have significance for lead auditors, policymakers and the Institute of Chartered Accountants of India (ICAI), who are keenly interested in upgrading the auditing practice of accounting professionals in India by incorporating AI and ICT determinants.
Practical implications
This research makes a significant contribution by offering a thorough framework for improving the knowledge management of practising auditors regarding ICT adoption, training and perceived benefits, a crucial component of auditing practices in the digital age. In addition, it provides insightful information about how AI affects accounting practices, which may point the way for further study in this area.
Originality/value
This research has significant implications for auditing firms in India. It can inform ICAI, policymakers and regulators in their attempts to foster the incorporation of AI and ICTs in auditing practice.
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Muhammad Iqmal Hisham Kamaruddin and Mustafa Mohd Hanefah
This study aims to explore and identify potential challenges and prospects for conducting the professional shariah audit training programme via an e-learning approach during…
Abstract
Purpose
This study aims to explore and identify potential challenges and prospects for conducting the professional shariah audit training programme via an e-learning approach during coronavirus disease 2019 (COVID-19).
Design/methodology/approach
Questionnaires were administered to 296 participants who were enrolled in the professional shariah audit training programme via e-learning during the COVID-19 pandemic outbreak in 2020. These participants were final-year students from selected Malaysian public universities.
Findings
Findings show that several main challenges are faced in adopting an e-learning approach for conducting the professional shariah audit training programme such as the inability to do more hands-on, group and physical activities, different understandings based on academic backgrounds, difficulty in learning practical and technical topics, technical issues and problems during e-learning sessions. These lead to the unsuitability of conducting professional training via the e-learning approach. In terms of prospects of knowledge learnt via the e-learning approach, participants showed that they are able to master all six modules covered in the professional shariah audit training programme via the e-learning approach. These include (1) shariah principles; (2) shariah governance; (3) Islamic financial transactions; (4) shariah risk management; (5) shariah audit planning and programme; and (6) shariah audit fieldwork and communication.
Practical implications
Based on the findings, it is suggested to have more time spent and earlier preparation on the learning contents and sessions, more discussion on actual contents and practical exercises and competency of the trainers in delivering e-learning sessions.
Originality/value
This study is believed to be one among the pioneering studies on the potential challenges and prospects in adopting e-learning for conducting the professional shariah audit training programme due to COVID-19.
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Shilin Liu, Noor Adwa Sulaiman and Suhaily Shahimi
Using attribution theory, this study examined the effects of situational factors [time budget pressure (TBP), organisational ethical culture (OEC) and quality control procedures…
Abstract
Purpose
Using attribution theory, this study examined the effects of situational factors [time budget pressure (TBP), organisational ethical culture (OEC) and quality control procedures (QCPs)] and dispositional factors [auditor professional commitment (APC) and internal locus of control (ILOC)] on audit quality threatening behaviour (AQTB). In addition, it observed the moderating role of religiosity in the relationship between situational and dispositional factors and AQTB.
Design/methodology/approach
A total of 189 external auditors responded to the survey questionnaire. This study employed structural equation modelling via SmartPLS to analyse the proposed model.
Findings
The results documented that the OEC and QCPs situational factors were negatively related to the incidence of AQTB, whilst TBP was positively linked to the incidence of AQTB. Dispositional factors APC and ILOC were negatively connected to AQTB. Furthermore, the findings recorded the moderating effect of religiosity on most of the situational and dispositional factors related to AQTB.
Practical implications
Regulators and accounting firms' efforts to promote high audit quality (AQ) may consider the theological/religious lens and reinforce ethical culture and quality control to reduce AQTB.
Originality/value
The findings provide further insights into situational and dispositional factors that may cause or impede the incidence of AQTB in auditing practices, as well as the moderating role of religiosity in curbing AQTB.
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Ferdy van Beest and Robert Pinsker
The purpose of this study is to construct and test a new measure of auditor orientation using two audit quality-related tasks.
Abstract
Purpose
The purpose of this study is to construct and test a new measure of auditor orientation using two audit quality-related tasks.
Design/methodology/approach
The sample consists of 66 Dutch and US graduate auditing students. Participants complete two tasks: one involving a lease classification and another, supplemental experiment involving a contingent liability judgment. The purpose is to construct a new measure for rules-based/ principles-based orientation. Rigorous, psychometric testing confirms that parts of tolerance for ambiguity (TOA) and need for cognition (NFC), together, form a new construct the authors identify as auditor orientation. The authors next conduct a main and supplemental experiment with novice auditor participants from both the USA and the Netherlands.
Findings
The authors begin with rigorous, psychometric testing using participants from the USA and the Netherlands. The resulting 10-item scale combines parts of TOA and NFC to reflect auditor orientation. The common themes across scale items are high (low) adaptability to complexity and a substance-over-form (form-over-substance) preference for principles-oriented (PO) (rules-oriented [RO]) auditors. Conducting two experiments, results from two distinct tasks confirm our research question; novice auditors classified as RO (PO) are more (less) likely to recommend a more aggressive/client-favorable disclosure judgment.
Originality/value
Auditor orientation (i.e. rules or principles) has a significant impact on the application of rules-based or principles-based standards. How the standards are applied, therefore, influences auditor decision-making and thus audit quality. However, there is a paucity of auditor orientation research to date, including a validated measure. The study contributes a new measure for future research in the related accounting standards and audit quality literatures, while also identifying a potentially important construct in auditor training.
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