Search results

1 – 9 of 9
Book part
Publication date: 17 July 2014

Kamil Omoteso and Musa Obalola

This chapter adopts Porter’s ‘audit trinity’ approach comprising internal audit, external audit and audit committee to discuss the role auditing can play in the management of…

Abstract

Purpose

This chapter adopts Porter’s ‘audit trinity’ approach comprising internal audit, external audit and audit committee to discuss the role auditing can play in the management of corporate fraud.

Design/methodology/approach

The chapter maps the historical background of and the developments in external audit as an assurance service, the internal audit function and the audit committee. Based on this, it explains the nature, types and possible causes of corporate fraud within the context of business risk with a view to establishing how auditing can help in managing such frauds.

Findings

The chapter highlights the relationships that should exist between the three audit types in order to support a sound internal control system as a tool for preventing and detecting corporate fraud.

Research limitations/implications

The chapter identifies cost, opportunity, connivance and managerial override as factors that could limit the ability of auditing to manage corporate fraud. It also suggests ways of addressing these limitations.

Practical implications

As the current upward trend in IT adoption for corporate operations continue to open new sets of corporate fraud windows, this chapter examines how an entity’s internal controls can be used to prevent and detect these growing fraud schemes.

Originality/value

The chapter’s unique strength is its adoption of a holistic approach to auditing to suggest ways of managing corporate fraud – a novelty in the corporate fraud literature. It is hoped that future research in the area will bring empirical insights to the issues raised and perspectives covered in the chapter.

Details

Ethics, Governance and Corporate Crime: Challenges and Consequences
Type: Book
ISBN: 978-1-78350-674-3

Keywords

Book part
Publication date: 4 March 2015

Matthias Nnadi, Kamil Omoteso and Yi Yu

This paper provides evidence on the impact of regulatory environment on financial reporting quality of transitional economies. This study compares the financial reporting quality…

Abstract

This paper provides evidence on the impact of regulatory environment on financial reporting quality of transitional economies. This study compares the financial reporting quality of Hong Kong firms which are cross-listed in mainland China with those of Hong Kong firms cross-listed in China using specific earnings management metrics (earnings smoothing, timely loss recognition, value relevance and managing towards earnings targets) under pre- and post-IFRS regimes.

The financial reporting quality of Chinese A-share companies and Hong Kong listed companies are examined using earnings management measures. Using 2007 as base year, the study used a cumulative of −5 and +5 years of convergence experience which provide a total of 3,000 firm-year observations. In addition to regression analyses, we used the difference-in-difference analysis to check for the impact of regulatory environments on earnings management.

Through the lens of contingency theory, our results indicate that the adoption of the new substantially IFRS-convergent accounting standards in China results in better financial reporting quality evidenced by less earning management. The empirical results further shows that accounting data are more value relevant for Hong Kong listed firms, and that firms listed in China are more likely to engage in accrual-based earnings management than in real earnings management activities. We established that different earnings management practices that are seemingly tolerable in one country may not be tolerable in another due to level of differences in the regulatory environments.

The findings show that Hong Kong listed companies’ exhibit higher level of financial reporting quality than Chinese listed companies, which implies that the financial reporting quality under IFRS can be significantly different in regions with different institutional, economic and regulatory environments. The results imply that contingent factors such as country’s institutional structures, its extent of regulation and the strength of its investor protection environments impact on financial reporting quality particularly in transitional and emerging economies. As such, these factors need to be given appropriate considerations by financial reporting regulators and policy-makers interested in controlling earnings management practices among their corporations.

This study is a high impact study considering that China plays a significant role in today’s globalised economy. This study is unique as it the first, that we are aware of, to compare real earnings activities against accrual-based earnings management in pre- and post-IFRS adoption periods within the Chinese and Hong Kong financial reporting environments, distinguishing between cross-listed and non-cross-listed firms.

Details

Neo-Transitional Economics
Type: Book
ISBN: 978-1-78441-681-2

Keywords

Book part
Publication date: 18 April 2011

Kamil Omoteso

In every country, those in charge of governance are expected to play a major role in shaping business and economic activities. They are expected to come up with a framework that…

Abstract

In every country, those in charge of governance are expected to play a major role in shaping business and economic activities. They are expected to come up with a framework that will underpin the principles, policies, laws and regulations they put in place to guide these economic and business activities and the compliance thereof. Such frameworks always depend on the political-economic philosophy of the country or those in charge of governance. As a result of the enormous power and influence political institutions wield on business organisations, these institutions constitute one of the cardinal ‘environments’ that ought to be considered when businesses are formulating their strategies as they constitute the pivot upon which the wheel of other environmental factors rotate.

Details

Governance in the Business Environment
Type: Book
ISBN: 978-0-85724-877-0

Book part
Publication date: 4 March 2015

Abstract

Details

Neo-Transitional Economics
Type: Book
ISBN: 978-1-78441-681-2

Content available
Book part
Publication date: 18 April 2011

Abstract

Details

Governance in the Business Environment
Type: Book
ISBN: 978-0-85724-877-0

Content available
Book part
Publication date: 17 July 2014

Abstract

Details

Ethics, Governance and Corporate Crime: Challenges and Consequences
Type: Book
ISBN: 978-1-78350-674-3

Content available
Book part
Publication date: 17 July 2014

Abstract

Details

Ethics, Governance and Corporate Crime: Challenges and Consequences
Type: Book
ISBN: 978-1-78350-674-3

Content available
Book part
Publication date: 4 March 2015

Abstract

Details

Neo-Transitional Economics
Type: Book
ISBN: 978-1-78441-681-2

Book part
Publication date: 18 April 2011

Güler Aras (www.guleraras.com) is professor of finance and dean of the faculty of economic and administrative sciences at Yildiz Technical University, Istanbul, Turkey. She is…

Abstract

Güler Aras (www.guleraras.com) is professor of finance and dean of the faculty of economic and administrative sciences at Yildiz Technical University, Istanbul, Turkey. She is also visiting professor at De Montfort University, Leicester, UK. Her research is into financial economy and financial markets with particular emphasis on the relationship between corporate social responsibility, sustainability and a firm's financial performance. Güler has published more than 15 books and has contributed over 150 articles to academic, business and professional journals and magazines and to edited book collections. One of the most recent books (2009) is The Durable Corporation: Strategies for Sustainable Development (with David Crowther), which addresses the topical issue of the sustainability of corporate activity. Güler is a founder and member of various associations and research centres in Turkey and worldwide. She is also a member of a number of international editorial and advisory boards and is vice chair of the Social Responsibility Research Network; series editor of the Gower Applied Research in Corporate Social Responsibility book series; associate editor of Social Responsibility Journal and convenor of the International Conference Series on Corporate Social Responsibility, now in its 10th year. She has also spoken extensively at conferences and seminars and has acted as a consultant to a wide range of government and commercial organisations.

Details

Governance in the Business Environment
Type: Book
ISBN: 978-0-85724-877-0

Access

Year

Content type

Book part (9)
1 – 9 of 9