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Satish Kumar, Nitesh Pandey, Bruce Burton and Riya Sureka
The Managerial Auditing Journal (MAJ) started publication in 1986 and celebrates its 35th year of publication in 2020. The purpose of this study is to provide a detailed…
Abstract
Purpose
The Managerial Auditing Journal (MAJ) started publication in 1986 and celebrates its 35th year of publication in 2020. The purpose of this study is to provide a detailed bibliometric analysis of the journal’s primary trends and themes between 1986 and 2019.
Design/methodology/approach
This study uses the Scopus database to analyse the most prolific authors in the MAJ along with their affiliated institutions and countries; the work also identifies the MAJ articles cited most often by other journals. A range of bibliometric devices is applied to analyse the publication and citation structure of MAJ, alongside performance analysis and science mapping tools. The study also provides a detailed inter-temporal analysis of MAJ publishing patterns.
Findings
The MAJ publishes around 40 articles each year with citations of this work steadily growing over time. The journal has attracted contributors from around the globe, most often affiliated with the USA, the UK and Australia. Thematic evolution of the journal’s themes reveals that it has expanded its scope to include topics such as internal auditing, internal control and corporate governance, whilst co-authorship analysis reveals that the journal’s collaboration network has grown to span the globe.
Research limitations/implications
As this study uses data from the Scopus database, any shortcomings therein will be reflected in the study.
Originality/value
This study provides the first overview of the MAJ’s publication and citation trends as well as the evolution of its thematic structure. It also suggests future directions that the journal might take.
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Inakshi Kapur, Pallavi Tyagi and Neha Zaidi
Purpose: This chapter aims to identify and evaluate the various components of business model disclosures in an Integrated Report and ascertain how the notion of business model is…
Abstract
Purpose: This chapter aims to identify and evaluate the various components of business model disclosures in an Integrated Report and ascertain how the notion of business model is perceived among practitioners.
Need for the Study: According to previous research, the International Integrated Reporting Council’s (IIRC) objective of improving corporate reporting by encouraging organisations to disclose their business model has not found the desired recognition. Therefore, the study elaborates on the various components of business model reporting and their implications on corporate reporting in general.
Methodology: A review of literature was conducted to identify and analyse research based on business models and their disclosures in integrated reporting. A narrative review was undertaken for selected literature.
Findings: The findings suggest that most large-sized organisations use integrated reporting for impression management and are not inclined to disclose too much about their business models for fear of competition. There is still a lack of clear understanding of what a business model should entail.
Practical Implication: This study adds to the research on business model disclosures in integrated reporting. Voluntary disclosure and a better understanding of such disclosures will prepare organisations of all sizes and industries for an event when Integrated Reporting becomes statutory.
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Jinhua Chen, Graeme Harrison and Lu Jiao
This paper examines how lateral accountability mechanisms may be used to address the unity–diversity tension in a large not-for-profit (NFP) inter-organizational partnership…
Abstract
Purpose
This paper examines how lateral accountability mechanisms may be used to address the unity–diversity tension in a large not-for-profit (NFP) inter-organizational partnership governed under a lead organization model.
Design/methodology/approach
A case study was conducted in the New South Wales Settlement Partnership comprising 23 NFP organizations providing settlement services for migrants and humanitarian entrants. Multiple data sources included semi-structured interviews, proprietary and publicly available documents and observation.
Findings
The paper demonstrates (1) the usefulness of a strength-based approach that the lead organization adopts in enacting lateral accountability mechanisms, which enables a balance between unity and diversity in the partnership; and (2) the capability of the lead organization governance model to address the unity–diversity tension.
Research limitations/implications
The paper (1) identifies the importance of a strength-based approach in implementing lateral accountability mechanisms to address the unity–diversity tension; and (2) challenges prior research that advocates the network administrative organization governance model in addressing the tension.
Practical implications
For practice, the paper identifies a suite of lateral accountability practices designed to address the unity–diversity tension. For policy, it provides confidence for government in promulgating the lead organization governance model in “purchasing” public services.
Originality/value
The paper demonstrates how lateral accountability mechanisms may be used to provide a balance between the objectives of preserving and leveraging the benefits of partner diversity and achieving unity. The strength-based approach (used in enacting the accountability mechanisms), while having a history in psychology and social work research, has not been recognized in prior partnership accountability and governance studies.
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Tatiana Mazza, Stefano Azzali and Luca Fornaciari
This paper aims to test the positive relationship between audit quality (AQ) of outsourced information technology controls (ITC) and information technology audit quality (ITAQ)…
Abstract
Purpose
This paper aims to test the positive relationship between audit quality (AQ) of outsourced information technology controls (ITC) and information technology audit quality (ITAQ).
Design/methodology/approach
Factor analysis, ordinary least squares (OLS) regressions and simulations.
Findings
Scoping and planning phases of the audit cycle account for about 69 per cent of ITAQ. The AQ of outsourced ITC is strongly and directly related to ITAQ. Improvement of AQ of outsourced ITC may be achieved through evaluation of control design and operating effectiveness by service auditor as well as direct evaluation by the client in service provider location.
Research limitations/implications
Sample size and input items in factor analysis.
Practical implications
Companies and auditors could improve ITAQ through a better organization of the scoping and planning activities; they could also improve the AQ of outsourced ITC using direct evaluation in the service provider location supplemented with service auditor reports. Regulators could refine or change laws and frameworks to take into account the factors of ITAQ and the methodology of evaluation of outsourced ITC.
Originality/value
Private data collected by questionnaire. The measures of ITAQ and the OLS model could be tested in future research, in countries with different frameworks and regulations related to AQ, different weight of outsourced information technology and other characteristics related to clients, service providers and service auditors.
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Masumi Nakashima and David A. Ziebart
– The purpose of this paper is to investigate whether Japanese Sarbanes – Oxley Act (J-SOX) impacted earnings management and earnings quality of public firms in Japan.
Abstract
Purpose
The purpose of this paper is to investigate whether Japanese Sarbanes – Oxley Act (J-SOX) impacted earnings management and earnings quality of public firms in Japan.
Design/methodology/approach
This archival study compares earnings management and earnings quality of firms that disclose at least one material weakness with a sample matched on size and industry without a material weakness.
Findings
The authors investigate whether the differences in regulations, corporate governance and regulatory environment acceptance influence earnings management and earnings management of Japanese listed firms, relative to findings in the USA. They found the Japanese results to be slightly different from the results found in previous USA studies. First, the time-series observations suggest that while accruals management and real earnings management remained unchanged for control firms, accruals management and real earnings management increased for material weaknesses disclosing firms following J-SOX. The regression analyses suggest that accruals management for both the groups is significant in the pre-and post-J-SOX periods, but that real earnings management declined for both the groups post-J-SOX. Second, while, both accruals quality and accuracy of cash flow predictions improved in the post-J-SOX period.
Research limitations/implications
The sample of Japanese firms disclosing a material weakness is small because the number of firms that disclose internal control deficiencies is decreasing in Japan. The authors have no evidence that their results are not generalizable to a larger sample and leave this for future research.
Practical implications
The authors provide evidence that J-SOX, which does not have a direct reporting system, does not constrain earnings management. Their results drive the regulator to reconsider whether the reporting system works in the Japanese business environment. Additionally, their results show that J-SOX has no effect on earnings management; thus, regulators need to reconsider the governance function of directors and internal auditors. This paper communicates to the world how J-SOX works in Japan through changes in earnings quality and management post J-SOX and the root problems.
Originality/value
This paper is the first (of which the authors are aware) to examine whether J-SOX impacted both earnings management and earnings quality in Japan. This paper discusses how the differences in regulations and corporate governance as well as the differences between USA-SOX and J-SOX may explain the results observed in Japan. This paper provides results regarding whether J-SOX improved earnings quality.
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John M. Thornton and Michael K. Shaub
The purpose of this research is to determine whether the type of tax services provided by a public accounting firm to its audit client and the consequence severity of an audit…
Abstract
Purpose
The purpose of this research is to determine whether the type of tax services provided by a public accounting firm to its audit client and the consequence severity of an audit failure impact jurors' assessment of audit quality and auditor liability.
Design/methodology/approach
The authors administer a court case to 168 jurors manipulating three levels of tax services provided to an audit client (none, tax preparation, and aggressive tax planning services); two levels of consequence severity of the alleged audit failure, observing the impact on jurors' assessment of audit quality, auditor responsibility for audit failure; and damages awarded the plaintiff.
Findings
Consistent with recent US regulations, jurors perceive the quality of the audit to be lower when auditors provide aggressive tax planning services, but not for tax preparation services. Damages are greater when auditors provide aggressive tax planning services across both levels of consequence severity.
Research limitations/implications
The results indicate that the type of tax services provided may impact jurors' views of audit quality and damage assessments against auditors. The questionnaire uses previously validated measures, but the results may not be generalizable to jurors in all jurisdictions.
Practical implications
Though empirical evidence is mixed at best about the impact of auditors providing non-audit services on auditor independence in fact, auditor independence in appearance, and thus audit quality, such impacts may affect the way jurors perceive the situation.
Originality/value
The study directly tests the implications for auditor liability of new restrictions on tax services and more accurately measures the impact of consequence severity, using actual jurors.
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