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Article
Publication date: 19 September 2022

Aitzaz Ahsan Alias Sarang, Asad Ali Rind, Mamdouh Abdulaziz Saleh Al-Faryan and Asif Saeed

This study aims to examine whether information asymmetry (IA) mediates the relationship between women directors and the cost of equity (COE). Specifically, this study…

Abstract

Purpose

This study aims to examine whether information asymmetry (IA) mediates the relationship between women directors and the cost of equity (COE). Specifically, this study posits that women directors tend to lower the COE through the channel of IA.

Design/methodology/approach

This study uses the US-listed firms’ data from 2002 to 2014, comprising 11,189 firm-year observations. This study measures the COE by aggregating the four unique market-based COE models and apply pooled ordinary least square to estimate our results.

Findings

This study documents that women directors are linked to IA, and that IA is linked to the COE. Furthermore, in the mediation test, IA fully mediates the relationship between women directors and the COE. This study's results also validate the critical mass hypothesis, as the IA shows full mediation between the critical mass of women directors and COE. This study also discusses the limitations and major implications of the results along with possible future directions.

Social implications

This study also supports the positive role of females in improvising the economic performance of the firms and supporting the sustainable development goals-5 (gender equality).

Originality/value

The originality of this study lies in its theoretical as well as empirical contributions. First, this study follows the line of inquiry of the mediation analysis, thereby contributing by examining whether the relationship between women directors and financial value, i.e. COE, is indirect. Second, in addition to ex post measures of the COE, this study used four ex ante unique market-based models to measure the COE. Most of the prior studies just rely on book-based measures or use a single market-based mode. Third, the findings contribute insights into how women directors add value and benefits firms.

Details

Journal of Financial Reporting and Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 2 May 2017

Hans-Ulrich Westhausen

The purpose of this paper is to discuss critical success factors for the enormous development that internal auditing (IA) as “third line of defense” (IIA, 2016) and one of…

2220

Abstract

Purpose

The purpose of this paper is to discuss critical success factors for the enormous development that internal auditing (IA) as “third line of defense” (IIA, 2016) and one of the strongest anti-fraud controls has reached within the past decades. Additionally, weaknesses of IA are identified and evaluated to allow further improvement.

Design/methodology/approach

The anti-fraud requirements stipulated in the “International Standards for the Professional Practice of Internal Auditing” are confronted with empirical data about the current situation of the IA as anti-fraud control. The empirical data were extracted from global sources such as “Fraud Reports” (Association of Certified Fraud Examiners – ACFE) and “common body of knowledge (CBOK)” studies. The Institute of Internal Auditors (IIA).

Findings

Over the years, IA has been continuously increasing its auditing quality and effectiveness with new analytical methods, specialized software tools and professional certifications. But all these efforts have hardly been reflected in statistical or research data, especially not in the listing of the top sources of fraud detection. The “ACFE-Fraud Report 2016” revealed that IA is now – for the first time ever – second among the initial detections of occupational frauds (financial statement fraud, corruption and asset misappropriation) worldwide. This positive trend of global anti-fraud auditing was probably no “one-hit wonder”, but a result of a lengthy process of professionalization of IA.

Originality/value

It is hoped that this paper will facilitate the discussion about the value that IA can add within an anti-fraud management system.

Details

Journal of Financial Crime, vol. 24 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 26 April 2011

Milena Alič and Borut Rusjan

In order to stimulate the interest of company management in the business perspective of internal audit this paper aims to investigate the possibilities of using internal…

2177

Abstract

Purpose

In order to stimulate the interest of company management in the business perspective of internal audit this paper aims to investigate the possibilities of using internal audit as a helpful managerial tool and describes the benefits of such use.

Design/methodology/approach

The benefits of IA as a managerial tool are investigated on a review of the relevant literature. Theoretically based findings are tested analytically using evidence from empirical research and empirically by a case study research.

Findings

Internal audit outcomes and benefits for management depend on the purpose of internal audit and on managers' support and expectations about it. The paper shows that in order to use internal audit as an effective managerial tool, internal audit has to be appropriately integrated within a strategic management system. The greatest benefits can be achieved by companies that are internally motivated to introduce the QMS which have a mature quality culture and QMS and their quality objectives linked to the business ones.

Practical implications

Discussing internal audit benefits from a managerial point of view is not a common approach in the professional literature on this topic. However, covering managers' needs by using quality tools is one of the most important issues companies should understand in order to make these tools attractive and beneficial. Showing the results of a real‐life case can convince managers from other companies that benefits of using IA as a managerial tool are tangible.

Originality/value

Internal audit purpose and results have been theoretically integrated within a broader managerial system of the company. This enables identification of possible business benefits resulting from appropriate implementation of internal audit itself and possible business benefits related to QMS and strategic management system of the company that can be affected through appropriate IA implementation.

Details

The TQM Journal, vol. 23 no. 3
Type: Research Article
ISSN: 1754-2731

Keywords

Article
Publication date: 19 July 2022

Christopher Harris and Sean Perry

This study aims to obtain information regarding the personnel, policies and practices of Internal Affairs (IA) units in large, municipal, US police departments.

Abstract

Purpose

This study aims to obtain information regarding the personnel, policies and practices of Internal Affairs (IA) units in large, municipal, US police departments.

Design/methodology/approach

The authors administered an 85-question survey to 436 departments that employed 100 or more full-time sworn officers in 2019 to inquire about their IA units, and 198 (45.4%) responded.

Findings

The authors find considerable variation in terms of the organization and management of IA units, frame policy findings in terms of IA’s best practices specified by the Office of Community Oriented Policing Services and find variation in adherence to these practices as well; some policies and practices are almost universally adopted, while others are much less frequently followed or even go against best practices.

Originality/value

There has only been a single study conducted of IA units and that is over three decades old. This study provides a much-needed expansion and update regarding the form and function of IA units in the US.

Details

Policing: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1363-951X

Keywords

Article
Publication date: 31 May 2022

Manaf Al-Okaily, Hamza Mohammad Alqudah, Anas Ali Al-Qudah and Abeer F. Alkhwaldi

In light of the repercussions of the COVID-19 pandemic, electronic auditing otherwise known as computer-assisted audit tools and techniques (CAATTs) has become inevitable…

Abstract

Purpose

In light of the repercussions of the COVID-19 pandemic, electronic auditing otherwise known as computer-assisted audit tools and techniques (CAATTs) has become inevitable to automate the auditing process worldwide. Accordingly, the purpose of this study is to examine the influence of technological, organizational and environmental (TOE) factors on public sector adoption of CAATTs in developing countries such as Jordan under the COVID-19 pandemic conditions.

Design/methodology/approach

This study used 136 usable responses from the managers of internal audit (IA) of the Jordanian public sector entities. The data collected were analyzed using partial least squares-structural equation modeling. The TOE framework has been used in this study to consider a wide set of TOE factors. Then, this study suggests a CAATTs adoption model that incorporates the related technology factors of the diffusion of innovation theory to environmental and organizational factors. Further, this study contributes to the TOE framework by addressing government regulations, audit bodies’ support and audit task complexity as environmental factors affecting CAATTs adoption in the context of the public sector.

Findings

The results revealed that for technological factors, only the compatibility affects CAATTs adoption by the IA departments. For organizational factors, organizational readiness, top management support, auditors’ information technology competency and entity size were found to be significant factors. From the environmental factors, both government regulation and audit task complexity influence the CAATTs adoption. Besides, entity size moderates the influence of top management support on the CAATTs adoption in the public sector.

Practical implications

The findings could highlight the significance of the CAATTs adoption in the public sector institutions (by internal auditors) post-COVID-19, taking into consideration the TOE framework’s factors. Also, the findings are significant for the decision-makers and regulators in declaring new legislation for the electronic IA profession in the Jordanian public sector.

Social implications

It turns out that the CAATTs adoption in the public sector can definitely enhance their ability to achieve the role of IA in preserving public funds and restricting corrupt practices within the public sector.

Originality/value

To the best of the authors’ knowledge, this study is one of the first studies that address the professional audit agency support and audit task complexity as environmental factors, as well as the entity size as an organizational factor, that affect CAATTs adoption in the IA department of the public sector.

Details

VINE Journal of Information and Knowledge Management Systems, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2059-5891

Keywords

Book part
Publication date: 11 July 2022

Nneka Udeh

In this chapter, the term responsible management is explained with regard to how it relates to the Igbo apprenticeship system (IAS). Responsible management is ‘the…

Abstract

In this chapter, the term responsible management is explained with regard to how it relates to the Igbo apprenticeship system (IAS). Responsible management is ‘the assumption of a person’s responsibility for sustainability, stakeholder value and ethics’ (Laasch & Conaway, 2015, p. 25).

The introduction describes the origin of the Igbo tribe, their exposure to entrepreneurship and the birth of the IAS. It also describes the IAS as a business philosophy targeted towards economic equilibrium. The IAS’s three stages, namely talent identification, learning stage and settlement stage is then discussed followed by the two forms of the IAS: the ‘Igba boi’ (to assist with any task) and ‘Imu oru aka’ (to learn a skill) also known as ‘Imu ahia’ (to learn a trade).

The chapter further presents how IAS promotes sustainability, which involves the protection, creation and maintenance of social, environmental and economic business values. In addition, the various ways via which the IAS encourages the need for decisions in management to be morally desirable in both process and outcome for the benefit of all parties involved will be discussed. This chapter explores how IAS does not only practice responsible management but promotes the idea of responsible management in Nigeria and across the continent. It dissects the contributions of the IAS to the Igbo community, short-comings of the system and how it can be applied to effect positive change in other sectors.

While the IAS has been around for decades, research shows that very little work has been done to document it and written reports on it are sparse. Thus, for this chapter the author chose to interview real people who are products of the IAS. Findings demonstrate that the system has remained the same over the years. However, there are less people using the system today due to some negative social reasons. The people interviewed are quoted in this chapter where relevant but their real identities will not be used here thus, they will be referred to as Mr Ben and Mr James. It is also noteworthy that the author is an Igbo woman who has first-hand information on the Biafra war and how the Igbo people worked hard to recover from its effects.

Details

Responsible Management in Africa, Volume 2: Ethical Work and Sustainability
Type: Book
ISBN: 978-1-80382-494-9

Keywords

Book part
Publication date: 3 February 2022

Can Öztürk

This chapter deals with the patterns of International Financial Reporting Standards’ accounting policy choices that have been analyzed by several authors in a…

Abstract

This chapter deals with the patterns of International Financial Reporting Standards’ accounting policy choices that have been analyzed by several authors in a country-specific context. Instead of a country-specific context, this chapter adopts a sector-specific approach in terms of the airline industry in a regional and global context in order to observe the patterns of cosmetic and non-cosmetic policy options. Cosmetic policy options are related to the presentation of financial information which is not expected to impact the comparability of financial information versus non-cosmetic policy options are considered to be policy options that are related to measurement and, therefore, if there is more than one allowable accounting treatment, the comparability of financial information weakens. In the context of the airline industry, this chapter considers the patterns of policy choices related to IAS 1 Presentation of Financial Statements, IAS 2 Inventory, IAS 7 Statement of Cash Flows, IAS 16 Property, Plant and Equipment, IAS 38 Intangible Assets, and IAS 40 Investment Property, within the framework of frequently observed policy options as well as taking depreciation methods and expected useful life into consideration in terms of industry-specific policy options in order to observe whether there is uniformity rather than diversity in the airline industry for presentation and measurement.

Details

Perspectives on International Financial Reporting and Auditing in the Airline Industry
Type: Book
ISBN: 978-1-78973-760-8

Keywords

Abstract

Details

Modelling the Riskiness in Country Risk Ratings
Type: Book
ISBN: 978-0-44451-837-8

Book part
Publication date: 28 November 2017

Francesco Bellandi

Part IV provides readers with the extant requirements for the application of materiality to recognition, measurement, presentation, and disclosure in the financial…

Abstract

Part IV provides readers with the extant requirements for the application of materiality to recognition, measurement, presentation, and disclosure in the financial statements. This part also includes a detailed critical review of the recent Practice Statement on materiality, the FASB’s proposed ASU on the notes and the amendments to the Conceptual Framework proposed by the IASB and the FASB.

The part expands to issues that are typical of Management Commentary, including the SEC guidance on materiality in Management Discussion and Analysis.

It informs about the complexities and subtle differences between financial statements and bookkeeping and the different standards of reasonableness versus materiality.

A section moves from materiality to material misstatements and covers the application of materiality in auditing.

Another section goes in depth on internal control over financial reporting, showing the linkages between materiality and risk appetite and risk tolerance and the related application guidance.

Details

Materiality in Financial Reporting
Type: Book
ISBN: 978-1-78743-736-4

Keywords

Book part
Publication date: 28 November 2017

Francesco Bellandi

Part V analyzes the details of how to assess materiality. It first tackles qualitative versus quantitative criteria and the role of professional judgment. It then analyzes…

Abstract

Part V analyzes the details of how to assess materiality. It first tackles qualitative versus quantitative criteria and the role of professional judgment. It then analyzes the selection of quantitative threshold, to expand to the choice of benchmarks. It contrasts the whole financial statements with subaggregates, line items, and components.

Specific sections contrast IASB, FASB, SEC, and other guidance on materiality applied to comparative information, interim reporting, and segment reporting.

The section on estimates mingles complex guidance coming from accounting, auditing, and internal control over financial reporting to explain how the management can improve its assessment of materiality concerning estimates.

After explaining the techniques to move from individual to cumulative misstatements, the part tackles verification ex post, and finally summarizes the intricacies of whether immaterial misstatements are permissible and their consequences.

Details

Materiality in Financial Reporting
Type: Book
ISBN: 978-1-78743-736-4

Keywords

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