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Describes how systems theory, and in particular “hard” and “soft” systems modelling, can provide a framework for the study of internal control and auditing inside organizations. Concludes that useful empirical research and case study work can be carried out using “hard” and “soft” systems modelling. Such research should make a positive contribution to the body of knowledge concerning the nature of the internal control and the practice of internal audit in organizations.

There have been new interests in internal control and the COSO report represents a milestone in the evolution of internal control. The business community and accounting profession reactions to the COSO report have been positive in the USA. The provisions of the COSO report help organizations to understand and appreciate better the value and importance of internal control; they also expand the elements and components of internal control, and provide guidelines for establishing criteria against which all entities can assess the adequacy and effectiveness of their internal control systems. The COSO report should provide a great implication for organizations′ internal audit functions and have a significant positive impact on the better recognition of the proactive role of internal auditors.

This study aims to examine how auditors perceive the influence of crucial fraud prevention factors in deterring financial statement fraud within the corporate sector. Additionally, this research explores the mediating effect of fraud awareness in elucidating the impact of ethical leadership and internal control systems on preventing financial statement fraud.

The study used an online survey, targeting a sample of 141 professionally qualified auditors with at least one year of practical experience in the field. The researchers used “Structural Equation Modeling (SEM)” to examine relationships between latent variables using partial least squares structural equation modeling. The study investigated the impact of whistleblowing systems, fraud awareness, ethical leadership, internal control systems and corporate governance on fraud prevention.

This research finding provides evidence to the corporate sector by establishing the significance of fraud awareness as the most influencing factor in preventing financial statement fraud. Furthermore, the combined explanatory variables account for 77.4% of the overall variance in financial statement fraud prevention. The study reveals a partial mediation effect of fraud awareness on the relationship between the internal control system and financial statement fraud prevention.

This research finding may assist in developing an effective fraud prevention programme to mitigate fraud instances and improve financial reporting quality. In the corporate sector, each organisation should clearly specify the policies on whistleblowing systems, fraud awareness training, internal control systems and corporate governance. To foster a comprehensive fraud prevention programme, the leaders should enforce these policies with employee support.

This research integrated crucial elements to develop a new theoretical framework for investigating financial statement fraud prevention within the corporate context. Accordingly, this research framework provides a more in-depth explanation of preventing financial statement fraud from an auditor’s perspective. Additionally, this research is the first to explore the mediating role of fraud awareness in influencing the effectiveness of the internal control system in preventing financial statement fraud.

There is an increased emphasis on internal control in the governmental sector. We compare finance officer assessments of internal control to auditor assessments for a sample of Michigan municipalities. On average, the finance officers' assessments of their control systems were more favorable than the assessments made by auditors from a regional CPA firm with a large governmental practice, suggesting that auditor reports on internal control may result in a more conservative evaluation of the control system than reports provided by management. One measure of the effectiveness of the internal control system is its ability to prevent errors. We compare the finance officer and auditor assessments of internal control to the number of audit adjustments as an objective measure of the accuracy of the control assessments. The internal control assessments made by auditors were significantly more highly correlated with the number of audit adjustments than those made by finance officers. This suggests that the accuracy of internal control reports may be improved if the reports are prepared by auditors.

Internal control systems are critical to an organization's efficiency and promotes the adherence to norms and rules. The purpose of this study is to evaluate the impact of internal control systems on banking industry effectiveness.

Data were collected from 15 commercial and 20 rural banks. The hypothesized relationships were supported by the data. A structural equation modeling was applied in testing the conceptual model and hypothesis. Confirmatory factor analysis was conducted to establish validity and reliability of the dimensions.

The results show that organizational effectiveness was significantly impacted by three dimensions of internal control systems: control activities, control environments and risk assessment. However, the impact of monitoring of control on organizational effectiveness was not significant. The results also show a nonsignificant impact of information and communication on organizational effectiveness.

Since the current study concentrated on the banking sector with its distinct characteristics, the generalizability of the conclusions may be limited.

The study's findings may aid decision-makers and stakeholders in the adoption, designing and implementation of proactive internal control system to enhance operational efficiency, effectiveness and competitive advantage.

The study advances the literature by empirically evidencing that internal control systems impact organizational effectiveness.

Two main objectives and they are: to determine whether the internal audit department of the companies listed in the Bursa Malaysia complies with the Standards for the Professional Practice of Internal Auditors IIA (2000); and, to determine whether compliance to SPPIA will affect the quality of the internal control system of the company.

Two sets of questionnaires were used in the study. Internal auditing practices was measured by the items listed in the SPPIA and the internal control was measured by means of the statement on internal control: guidance for directors of public listed companies. The population used in this study was all the companies listed in the Bursa Malaysia in 2001. This study used both descriptive and inferential analyses.

It was found that management of internal audit department, professional proficiency, objectivity and review significantly influence the monitoring aspect of the internal control system. Scope of work and performance of audit work significantly influences the information and communication aspect of the internal control system while performance of audit work, professional proficiency and objectivity significantly influence the control environment aspect of the internal control system. The study also shows that management of internal audit department, performance of audit work, audit program and audit reporting significantly influences the risk assessment aspect of the internal control system. Lastly, performance of audit work and audit reporting significantly influences the control activities aspect of the internal control system.

The research has contributed to the agency theory with respect to the bonding costs that management has to pay to the internal auditors for the best interest of the principals of the companies. Another important implication pertains to the extent of the internal auditing practices among internal auditors in Malaysian public listed companies. Research has also shown that the compliance with internal auditing practices partially influence certain aspects of the quality of the internal control system.

This is the first empirical study that has linked the compliance of the internal auditing function to the SPPIA and its effect on the internal control system.

Professional accounting associations in various countries and governmental and other quasi‐official bodies have played an important role not only in the evolution of internal control reporting on a global scale, but also in educating management, investors, financial institutions, accountants, auditors, and other interested parties highlighting the pervasiveness of the effects of a sound internal control structure in corporate reporting as well as other aspects of an organization′s success. These associations include the Institute of Internal Auditors (IIA), the American Institute of Certified Public Accountants (AICPA), the General Accounting Office (GAO), the Securities and Exchange Commission (SEC), the Cadbury Committee, the Institute of Chartered Accountants of England and Wales (ICAEW), the Scottish Institute of Chartered Accountants (SICA), the Canadian Institute of Chartered Accountants (CICA), and others. Business failures, management fraud, corporate misconduct, international bribery, and notorious business scandals in all sectors of business have prompted the US government to take drastic action on internal control reporting to safeguard public interest. Several professional and government committees were formed to study this precarious situation: the Treadway Commission, the Committee of Sponsoring Organizations (COSO) of the Treadway Commission, the Packard Commission, the Cohen Commission, the Adams Commission in Canada, the Cadbury Committee in the UK, and others. The principal motivation for the changing dynamics has been growing public pressure for greater corporate accountability. The government′s pressure on the accounting profession and management of public corporations has been pivotal in spearheading internal control reporting. Examines the role of professional associations, governmental agencies, and others in promulgating standards for internal control reporting, and the impact of legislation on this aspect of internal auditing in the USA and worldwide.

Drawing from fraud triangle theory, the purpose of this paper is to examine whether the use of internal control systems and codes of conduct, as a specific element of internal control, helps firms to reduce law violations and bribery payments to public officials.

The study is based on survey data of Vietnamese firms, conducted between September and December 2018. The authors run logistic and ordinary least squares regressions to test the hypotheses.

The study showed that the use of internal control systems has a negative and significant relationship with law violation but not with bribes paid to public officials. By contrast, the use of codes of conduct appears to reduce bribe payments but not law violations.

Cross-sectional data do not allow us to confirm causal relationships. The self-reported measures of the use of codes of conduct and internal control systems may suffer from social desirability biases and should be further validated with different samples of firms. Finally, the relatively modest number of firms that participated in the survey raises a concern of sample representativeness.

For businesses, the application of codes of conduct and internal control systems enhances the reliability and certainty of the firm's operations as well as its integrity, contributing to the firm's long-term development. For policymakers, encouraging businesses to use internal control systems and codes of conduct would contribute meaningfully to the anti-corruption effort.

Businesses in emerging economies face a dilemma of how to participate in an anti-corruption agenda while staying profitable. This study shows that the use of internal control systems and codes of conduct would serve both purposes, contributing to businesses' sustainable development.

The purpose of this paper is to introduce the continuous auditing system based on continuous monitoring and its implementation methodology; also to present a systematic case study of actual continuous auditing systems implemented in the financial industry and the manufacturing industry.

The paper examines the method of implementing the continuous auditing system in the enterprise resource planning (ERP) environment, and suggests how the continuous auditing system can take firm root by looking at the successful introduction of the continuous auditing system in the financial industry and the manufacturing industry.

The proposed method of implementing the continuous auditing system has the 2stage approaches which can be applied to various kinds of companies in the ERP‐based environment. In addition, the proposed cases have the important practical implications acquired in the process of implementing the continuous auditing system in the financial industry and the manufacturing industry.

This study will help many corporations facing various types of corruption or circumvention of internal control, with their internal auditing, by showing them how to use the continuous auditing system to reinforce internal control. Also, it will make the independent auditor understand audited company's continuous monitoring system and lead to use the infrastructure for efficient and effective external auditing.

The proposed method and cases of implementing the continuous auditing system offer an innovative approach to auditing in the ERP‐based environment because it facilitates both internal auditor and external auditor to achieve the audit objectives efficiently and effectively.

Using the backdrop of an (apparently) extended visit to the West Indies, analogies with key concerns of internal audit are drawn. An unusual and refreshing way of exploring the main themes ‐ a discussion between Bill and Jack on tour in the islands ‐ forms the debate. Explores the concepts of control, necessary procedures, fraud and corruption, supporting systems, creativity and chaos, and building a corporate control facility.