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The purpose of this paper is to identify and interpret expectations of regulators about the interface between regulators and internal audit.

Contemporary pronouncements are subjected to a content analysis about the relationship demands that regulators place upon internal audit. Comparison is made with internal auditing standards. The paper identifies the significant challenges and considers the future.

Regulators are increasingly prescriptive about what they expect from internal audit. The scope of internal audit work must cover all matters of interest to the regulator. Internal audit is now regarded as part of the supervisory process. Unlike financial reporting and external auditing, there is no attempt to regulate the setting of internal audit standards, but regulators themselves are enunciating internal audit requirements that go beyond the standards.

The paper draws mainly upon developments in the financial sector, which is leading the way in prescribing the interface between regulator and internal audit.

The enhanced requirements of regulators impact upon internal audit's other relationships on the internal audit universe and scope, and on staffing internal audit.

This is the first attempt to synthesise what regulators currently require from their relationship with internal audit, which needs to be reflected in internal audit charters and in future releases of global internal auditing standards.

The paper aims to offer an exploration of the Banking Act 1987 which was passed following the failure of Johnson Matthey Bankers (JMB) in 1984. This Act extended the role of auditors in banking supervision by removing traditional confidentiality constraints and created a new role of “reporting accountant”. The paper seeks to examine the origin and development of these new reporting roles. In addition, the paper considers the extent to which the findings of this historical investigation might contribute to current debates on the role of auditors in banking supervision.

The paper draws on official documents, personal accounts of individuals responsible for dealing with the JMB crisis, and semi‐structured interviews conducted with audit partners and banking supervisors who had direct experience of implementing the supervisory reforms instituted under the Banking Act 1987. Power's explanatory schema of controversy, closure and credibility is adopted as a framework for the analysis of documentary sources and interview data.

The failure of JMB generated sufficient controversy so as to require reform of the system of banking supervision. The paper shows that JMB was a controversy since it disturbed what went before and carried with it sufficient allies for change. To achieve closure of the controversy, agreement by key actors about changes to the nature of the role of auditors was required to ensure legitimacy for the reforms. Backstage work undertaken by the auditing profession and the Bank of England provided the necessary credibility to renormalise practice around the new supervisory arrangements.

The paper develops Power's schema which is then employed to analyse the emergence of the new role of reporting accountant and extended role for auditors in UK banking supervision. The paper provides empirical evidence on the processes of controversy, closure and credibility that help to ensure the legitimacy of accounting and auditing change.

The purpose of this paper is to strengthen the theoretical understanding of the processes through which a new regulator seeks to gain legitimacy within an existing regulatory space. The authors do this by investigating the case of the Australian Charities and Not-for-profit Commission (ACNC).

Synthesising legitimacy theory with the concept of regulatory space, the authors analyse formal public discourse surrounding the establishment and operations of the ACNC.

Regulation is essentially a context-bound political process in which a new regulator needs to establish legitimacy to ensure its survival. It must convince its constituents that it has developed processes to operate effectively and professionally in addressing constituents’ needs, to bargain authoritatively with other regulators in establishing its operational boundaries, and to engage politically with government and constituents. Over a relatively short time, the ACNC built legitimacy, despite the political threats to its formal regulatory authority.

The conclusions are based on the analysis of one case. There is scope for further investigations of the processes by which new regulators establish their legitimacy in different contexts.

The potential for a political threat to the authority of a new regulator, and the difficulty of achieving regulatory reform, particularly in a federated system such as Australia, highlight the necessity for a new regulator to develop a compelling discourse of legitimacy.

The authors synthesise regulatory space and legitimacy perspectives, contributing to an understanding of the processes of regulation.

This paper, set in the context of a rationale for financial regulation, considers how the Financial Services Authority’s (the regulator) approach to establishing compliance competent organisations in the life assurance sector (the regulated) has evolved from a prescriptive approach to one of cooperation with those regulated, in order to establish a working partnership. It focuses on investment business and the resulting importance of conduct of business regulation. It reviews the regulator’s approach, linking academic theory to existing practice and the progress made in the developing and evolving relationship between the regulator and the regulated. It establishes what steps/phases have already taken place within life assurance companies seeking to incorporate and change their compliance culture. It creates a template for the review of progress in seeking to achieve the regulator’s goal of compliant competent organisations, while identifying the essential elements of the new partnership approach. This approach will not only meet the regulator’s stated aim of improving consumer protection but also benefit life assurance companies themselves.

Companies have much to gain by establishing and nurturing a smooth working relationship with regulators.

Compliance is defined as conforming to a rule, such as a policy framework, standard or law. Regulatory compliance encompasses all processes that require an entity to be aware of and conform to relevant regulations. As a result, organisation of compliance function remains complex due to the overwhelming set of compliance requirements that exert pressure on various business segments. This report aims to investigate how banks and financial services firms are responding to the regulatory-driven changes to the current compliance landscape, with particular attention paid to nascent challenges and structural changes affecting the organisation of compliance.

The current research project is based on in-depth, semi-structured interviews with five universal banks and three financial services firms to pursue the best practices of adapting to the accelerating change in the regulatory-driven compliance landscape.

In the aftermath of the global financial crisis, banks and financial institutions across the globe have been required to adapt to numerous regulatory reforms that are exerting increased pressure on compliance functions. Amid recent events of multi-million fines to banks that displayed flawed surveillance systems and control failings, the changing regulatory landscape has shown that the relationship with the regulators and compliance with the new regulatory frameworks is a difficult process even for the tier-1 global banks.

Embarking on a peer review of the structures, roles, strategies and responsibilities of different compliance functions across banks and financial services institutions, this paper provides advice to financial institutions on ways of dealing with the complex emerging issues to ensure that the regulatory and compliance arrangements do not turn detrimental. At this point, the paper recognizes that the precise design of a compliance function will vary across individual banks and financial services firms. Nonetheless, this paper addresses the root issues and characteristics that are commonly shared despite the differences in organisations of compliance.

The purpose of this paper is to consider whether successful subsidised arts organisations are more likely to apply a relationship rather than transactional marketing approach to overcome the tendency of not‐for‐profit organisations generally, and subsidised arts organisations particularly, to use marketing for short‐term, tactical purposes.

Research was undertaken to identify whether “successful” subsidised performing arts organisations were indeed more strategic in their focus, whether they had applied a relationship marketing approach and whether such an approach had been influential in the development of their “success”. Preliminary research led to the production of a conceptual framework that identifies major partnerships and specific stakeholder types that need to be considered by a subsidised performing arts organisation if an effective relationship marketing approach is to be developed. This was used as the basis for subsequent research involving a multiple case study approach studying two “successful” theatres and one “unsuccessful” theatre in depth. The strengths of relationship between the various key stakeholder roles and artistic directors within the three theatres were analysed.

Although this research is limited to a case study analysis of three theatres, it does seem to provide evidence to suggest that building strong relationships with stakeholders other than end users can be advantageous to subsidised performing arts organisations.

It is likely that this approach could be successful for the subsidised arts generally and indeed for all those organisations in the not‐for‐profit sector where those who pay do not necessarily receive the service.

This article provides a discussion on successful subsidised arts organisations.

This study aims to shed light on Shari’ah supervisory boards (SSBs) and the possibilities of Islamic banks to reduce the tax avoidance. Performance and Shari’ah compliance have been extensively studied; however, tax avoidance remains a challenge.

SSB characteristics, based on resource dependence theory, influence tax avoidance, including SSB size, educational level, expertise, reputation, remuneration and turnover. The samples were obtained from Islamic banks in Indonesia and Malaysia (2010–2020) using the data panel method.

Islamic banks avoid taxes through the effective tax rate and book tax difference. SSBs who have more expertise play a role in investigating the complexity of tax avoidance, and SSB reputation, who is a member of the Islamic bank regulator, understands immorality, resulting in reduced tax avoidance. Moreover, the recruitment system has been effective, as SSBs with more expertise have become more prevalent. Meanwhile, SSB from a Shari’ah background works only in regulated areas, simplifying Shari’ah compliance, in particular, attestation of financial reporting. A heavy workload is created by cross-membership, resulting in the neglect of the immoral value of tax avoidance. The calculation of tax avoidance also includes remuneration and bank assets.

Given the uniqueness of Islamic banks contributing to social welfare, tax regulators need to review the appropriateness of fees that can be treated as taxes. Tax regulators can join hands with Islamic bank regulators on this review.

To the best of the authors’ knowledge, this study is one of the first to examine the characteristics of SSBs and Islamic banks on tax avoidance. Separating Islamic banks by country enriches the analysis.

The purpose of this paper is to use the New Zealand electricity industry as a case study to describe and understand the importance of collaborative relationships in coping with the changes faced by sectors of the industry over the last two decades.

A multi‐method qualitative approach is used to investigate the nature of industry relationships. Data were collected through two‐phase in‐depth interviews with key electricity employees. Secondary documents and archival records were used to support participant contributions.

The research finds that the majority of the collaborative relationships in the New Zealand electricity industry are “forced”. Nevertheless, and despite the preclusions of competition, relationships continue to support the strategic imperatives of firms and form an important component of firm‐level operation.

The study provides an understanding of collaboration within a new contextual setting – the New Zealand electricity industry. To the best of one's knowledge, no other study has attempted to assess the importance of collaboration on these industry players. The qualitative analysis undertaken made it possible to discover insights that would not have emerged from more commonly used quantitative methodologies.

This study aims to focus on the accountability of organizations to multiple stakeholders with differing interests and power, where there is an absence of accountability towards shareholders.

Longitudinal field study via participant‐observation.

The study focuses on the relations between the subsidiary and the parent boards and how a governance improvement plan affected the internal dynamics of the organization and helped to clarify the demands of multiple stakeholders. A stakeholder‐agency model is developed which emphasises the role of governance, the importance of structure and process, and the culture or ethos of boards in which multiple stakeholders may have compatible rather than competing interests.

The paper focuses on the quasi‐public sector and develops stakeholder‐agency theory by identifying governance at the centre of differing relationships with stakeholders with unequal salience where there is both an economic concern with efficiency and a broader social concern.