Search results

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.

Country and company bankruptcies at international level have put the economies of the world and countries in a difficult position. As a result of these negative developments, the measurement of the effectiveness of internal audits system together with accounting and audits have become important. The unit that plays a key role in measuring the effectiveness of internal control, whether in the private or public sector, is internal audit. In this respect, the purpose of the present study was to outline the criteria that increase the effectiveness of internal audit in public institutions. For this purpose, the SWARA Method was used. The SWARA Method is a multi-criterion decision-making method that is employed by decision-makers to determine the weights of the criteria and to sort them out. The Questionnaire of the study was applied to a participant group that consisted of 11 experts. According to the findings, the criteria that had the highest importance were “the presence of an independent internal audit activity and impartial internal auditors,” “Performing internal audit activities in line with ethical rules, standards, and relevant regulations,” and “Determining the risks regarding the objectives and the purpose of the institution, and measuring the effects of these risks.”

The Public Sector is usually assumed to have a risk avoidance culture, with a reactive rather than proactive approach towards the management. However, an improved holistic approach seems to be required, especially when considering the complexity and size of the Public Sector, and the challenges it faces to connect the services, clients and the different levels of governance.

Within this chapter, the authors lay out a maturity level evaluation of Governance, Risk Management and Compliance (GRC) within the Maltese Public Sector. Through documentation analysis of the available literature on the subject, the authors determine the principal themes required to develop an effective GRC practice across the Public Sector. The authors then design statements based on the identified GRC themes and administer it using an online survey tool to Public employees across different Ministries, Departments, Agencies and Entities, in order to obtain their perception. This is in order to determine gaps, weaknesses or limiting factors towards the implementation of an effective GRC.

The results show that, although, there is a substantial percentage of scepticism and few disagreements towards some of the statements, especially those which related to Risk Management (RM) and Internal Auditing (IA), the majority of Public Sector bodies do in fact show high standards of GRC practices integrated and present in their day-to-day operations and internal environment, showing that there is a well-developed Governance, Compliance and Control structure and Internal Audit function across the Sector.

However, the perception of participants is that the RM function is the least developed area. IA needs some improvement especially where trust on advice is involved.

Along with accounting scandals in the past, academics, researchers, and legislators have focused on fraud. The purpose of this study is to examine postgraduate and doctoral studies, articles, and books about forensic accounting and fraud audit published between the years 2008 and 2018 in Turkey. For this purpose, a total of 96 studies have been examined and 35 of these are master’s theses, 10 of them are PhD theses, 45 of them are articles, and six of them are books. These studies were presented in tables as classified. The studies examined in our research are summarized as year they were published, the author, and the scope of the topic and in terms of results. The conclusions of this study can be summarized as follows: (a) the majority of thesis published about forensic accounting and fraud audit are in 2011 and following years. In addition, most of the theses are focused on forensic accounting review rather than fraud audit. (b) Results in the articles reviewed are in the same direction with theses. (c) There are very few books about fraud audit and forensic accounting. One of them is related to fraud audit, while the rest of them are related to forensic accounting and forensic accounting profession. We suggest extending the scope of the study and making to other countries.

Financial manipulation means the modification made knowingly and willfully by businesses in accounting records and transactions, in financial statements, through addition and subtraction, for the purpose of misleading financial information users. Financial manipulations are expected to have an effect on the decisions of financial information users. The present study was established on the basis of two main objectives. The first objective is to determine whether banks, which are Public Interest Entities (PIE), manipulate their financial statements. As for the second objective, it is to reveal whether the detected financial manipulations have an effect on investor decisions. The research conducted to achieve the first objective is based on the examination of independent audit reports for the periods between 2009 and 2017, pertaining to 45 banks registered to the Banks Association of Turkey, in terms of presented opinions. Data acquired from examined reports were subjected to content analysis via the Microsoft Excel program. In line with the second objective of the study, investor numbers for the periods between 2010 and 2017, of 13 banks, which are within the scope of BIST BANK, were included in the analysis, according to data acquired from the Central Registry Agency. Financial statements of banks, with audit reports in which a qualified opinion is expressed, were considered to have been manipulated. SPSS 22.0 statistics pack software was used to analyze whether investment demands toward these banks had an effect on decisions of domestic and foreign investors. In the analysis, frequency and One-Way ANOVA tests were used. In consequence of the analyses conducted, it was determined that, around one fifth of financial statements of PIE banks, pertaining to the periods between 2009 and 2017, were manipulated; it was mostly committed by private banks, and majority of the manipulations were committed due to free provisions made. It was also observed that manipulations did not have an effect on decisions of neither domestic nor foreign investors. The reason behind the latter is the fact that while the level of manipulations in financial statements is significant, it is not a widespread occurrence.

The profession of judicial advisory is a profession with a larger scope, which creates solutions for legal problems by harmoniously blending principles, theories, and standards that relate to many areas of expertise such as accounting, auditing, and law. The legists need expert information on the matters of accounting, finance, and taxation regarding the files that they handle. In such cases, experts who perform the profession of judicial advisory provide their consultancy services to the legists before and during the cases.

The purpose of this study is to create awareness regarding the profession of judicial advisory and put forward the prospects of this profession in Turkey. The study includes four provinces located in the Eastern Black Sea Region (Trabzon, Rize, Ordu, and Giresun). There are a total of 1,339 lawyers who are registered to the bar associations of the indicated provinces; out of them, 600 lawyers have been communicated, but a questionnaire was conducted on 354 lawyers by employing face-to-face interviews. The data obtained from the questionnaires have been subjected to difference in means (unpaired t-test) and descriptive statistical analyses by using the statistical packet software of SPSS 10.0.

In the consequence of the conducted analyses, it has been determined that the lawyers thought that the members of the profession of accounting working as experts were inadequate. In the event of establishing judicial advisory institution besides the institution of expertise, it is believed that a more beneficial system would be created. It is seen that this thought has not changed among the lawyers in terms of different characteristics except level of education. Additionally, it has been determined that the level of awareness of the lawyers regarding the profession of judicial advisory was insufficient.