Search results

This paper aims to investigate the compliance of Saudi shareholding companies with the requirements of internal control as set by the Saudi standard on internal control and its impact on the profitability of these companies.

A questionnaire was used to collect data about the compliance with internal control requirements, and four measures of profitability including earnings per share (EPS), return on assets (ROA), return on equity (ROE) and profit margin (PM) for profitability were calculated using data from the financial statements of these companies. Then, Multiple Regression and t-test were used to analyze the data and test the hypotheses.

The results of the study revealed that the degree of compliance with all components of internal control is very high. It also appears from the analysis that the effect of internal control and its components on ROA and ROE is significant and positive, while the effect on EPS and PM is positive but statistically insignificant.

Corporate managements should review the effectiveness of the implementation of internal control requirements, especially those related to control environment, information and communication and monitoring.

The findings of the study shed light on the relevance of internal control systems of the Saudi shareholding companies in improving the financial performance of the these companies, which is expected to help in safeguarding the interests of all interest groups and improve the society’s well-being.

The paper provides new evidence about the relationship between internal control and profitability in the Saudi Arabian environment. The findings of the study add good contribution to the literature because they direct our attention to the expected effect of the environment on the relationship between internal control and performance. The results may suggest that there is a need to expand this study using other methodologies to delve into the depths and understand this phenomenon within its context.

A classic paper on the development of governmental financial control systems argues that such developments occur within the framework of a three‐stage model of evolution. This paper examines the validity of Dean’s model of evolution and argues that the model represents such a general level of historical description that a much more comprehensive examination of historical and current context is required if the past development of current systems and the design of future changes in those systems are to be properly understood. Evidence to support this claim is provided in the form of summary evidence based on an exhaustive inquiry into changes in both the UK and Nigerian governmental financial control systems over the last 35 years. This leads to suggestions that a model based on evolution and experimentation in response to contextual changes offers a better route to future research and improved practice.

This paper examines the role of professional associations, governmental agencies, and international accounting and auditing bodies in promulgating standards to deter and detect fraud, domestically and abroad. Specifically, it focuses on the role played by the US Securities and Exchange Commission (SEC), the American Institute of Certified Public Accountants (AICPA), the Institute of Internal Auditors (IIA), the Institute of Management Accountants (IMA), the Association of Certified Fraud Examiners (ACFE), the US Government Accounting Office (GAO), and other national and foreign professional associations, in promulgating auditing standards and procedures to prevent fraud in financial statements and other white‐collar crimes. It also examines several fraud cases and the impact of management and employee fraud on the various business sectors such as insurance, banking, health care, and manufacturing, as well as the role of management, the boards of directors, the audit committees, auditors, and fraud examiners and their liability in the fraud prevention and investigation.

The purpose of this paper is to analyze how the COBIT framework, integrated within the internal control framework, enables improvement in the quality of financial reporting while helping to reduce or eliminate the material weaknesses (MWs) of internal control over financial reporting (ICFR). The Control Objectives for Information and Related Technology (COBIT) model is a framework for information technology (IT) management and IT governance. It is a supporting toolset that allows managers to bridge the gap between control requirements, technical issues and business risks. Preliminarily, the analysis in this paper illustrates how the Committee of Sponsoring Organizations (COSO) framework impacts on the MWs, highlighting strengths and weaknesses. This paper shows how these limits can be overcome with the use of the COBIT framework.

This is a conceptual paper that aims to highlight the relationship between COBIT and COSO, by illustrating how the IT processes reduce or eliminate the main MW categories.

The analysis indicates that the implementation of the COBIT framework, or more generally the adoption of effective IT controls, provides important benefits to the entire company or organization. IT control objectives have a direct impact on the IT control weaknesses and indirectly on the other categories of material weaknesses.

The adoption of the framework allows managers to implement effective ICFR. In particular, the COBIT approach provides managers with a more evolved tool in terms of compliance with the Sarbanes–Oxley Act requirements. This framework also improves the reliability of financial reporting in relation to the requirements of Public Company Accounting Oversight Board’s Auditing Standards No. 2 and 5.

The analysis provides an interdisciplinary approach, connecting accounting and information systems themes, and suggest solutions and tools than can help managers to address the internal control weaknesses. This paper addresses an area of relevance to both practitioners and academics and expands existing accounting literature.

As has been pointed out throughout this edition the whole concept of financial control in the literature has been treated in rather a narrow, confused way. The purpose of this present article is not to repeat these arguments but rather to highlight a major omission in the literature and this edition — the whole idea of what could be called “external” financial control.

The accounting profession’s strong focus on internal control and fraudulent financial reporting has led to new standards relating to internal control and fraudulent financial reporting. The control environment and specifically, management integrity, is an important component. The purpose of this article is to determine if the control environment forces ‐ the tone at the top, codes of conduct, and short‐term targets ‐ are related to financial reporting decisions. The results are based on a survey mailed to 400 CPAs who prepare financial reports. The findings indicate there is some reason for concern about fraudulent financial reporting. In addition, a tone at the top in an organization that fosters ethical decisions is of overriding importance to reliable financial reporting. Codes of conduct and pressure for short‐term performance, alone, had no significant effect on financial reporting decisions. The findings emphasize the importance of learning about an organization’s tone at the top during an audit.

This study aims to evaluate the moderating impact of corporate governance on the relationship between internal control mechanisms and financial performance.

The study employs a structured questionnaire to collect data from 250 top managers of rural banks in the capital of Ghana. Cronbach alpha value and Fornell-Larcker tests were performed to assess the reliability and validity of the data used. The study adopted a partial least square structural equation model (PLS-SEM).

The results show that internal control and corporate governance both have a direct positive and significant impact on financial performance. Furthermore, the interaction of internal control and corporate governance also has a positive and significant impact on financial performance, thus confirming the moderating role of corporate governance in the relationship between internal control mechanisms and financial performance.

This implies that organizations need to strengthen their corporate governance procedures to increase the efficiency of their internal control systems, which would ultimately lead to an improvement in their financial performance.

The present study innovates by assessing the moderating role of corporate governance in the nexus between internal control mechanisms and financial performance. This moderating effect assessment implies that corporate governance may not only affect the technical implementation of the internal control structures but will subsequently make an impact on the overall performance of the organization.

We examine changes in controlling shareholder holdings, looking for evidence of financial tunneling (unfair wealth transfers from public investors to controlling shareholders). Our sample comprises yearly data during 2000–2011 on 75 large Israeli companies. We find that controlling shareholders are successful in timing the stock market – there exists a significant negative correlation between changes in the mean controlling shareholders’ equity holdings and market return. There is also some evidence that controlling shareholders increase (decrease) their holdings before years of positive (negative) excess returns in their shares. However, statistically significant mean excess returns are documented only after decreases in controlling shareholders’ holdings. Thus, we offer only limited support for the financial tunneling hypothesis.

To take relative actions to cope with the threat which network finance information security now encounters by constructing controlling tactical and synergetic model.

It is practical to use the synergetic self‐organization theory to calculate the effects that the force of synergetic system of controlling tactics to financial information security makes on network financial system, and it is also practical to construct the synergetic model of controlling tactics to network financial information security on the basis of it.

Through applying synergetic analysis to controlling tactical system of network financial information security, it can be found out that controlling tactical system is an open system which changes from disorder to order and which keeps away from a balancing state. As an opening system, controlling tactics are interacting with outside from now and then.

Network financial information security takes on dynamics, relativity, integrity and complexity. Accessibility of data is the main limitations which model will be applied.

From the view of network financial information security, constructing controlling tactical and synergetic model of information security are explained.

Network finance is orientated as a special social and economic system. The author does analysis on the network financial system, and expounds order parameters and model of network financial system.

The application of new public governance by many countries has led to the creation of new management systems in public administration and the development of an effective accounting structure with efficient internal control to guarantee a proper provision of services that meet citizens’ requirements. The purpose of this paper is to focus on Spanish local government with the intention of determining the impact of the internal control structure on the disclosure of financial information on the internet.

The empirical analysis used combines a descriptive aspect with an explanatory one and seeks to answer the question of whether the internal control system (ICS) influences the disclosure of financial information on the websites of Spanish LGs. The authors use a multivariate model that allows us to verify the predictive capability of the previously defined explanatory variable, internal control, in 1,806 local governments. To test the hypotheses, the authors use two different models.

The authors consider the existence and quality of the financial information disclosure in relation to ICSs, and a series of financial and non-financial variables. The authors conclude that the structure of the ICS influences financial information disclosure and its quality. Also, the socio-political variable gives a better explanation of financial information disclosure than the financial variable.

This research is novel to determine whether the development of ICSs in Spanish municipalities has favored and increased the disclosure of financial information financial through the municipalities’ website transparency portal. These findings will contribute to increase the importance of internal control in the management of public entities.