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Article
Publication date: 1 December 2006

James Lloyd Bierstaker and Jay C. Thibodeau

The purpose of this paper is to investigate whether the use of a questionnaire or a narrative documentation format will impact an auditor's performance in identifying…

Abstract

Purpose

The purpose of this paper is to investigate whether the use of a questionnaire or a narrative documentation format will impact an auditor's performance in identifying internal control design weaknesses.

Design/methodology/approach

A field experiment approach with a sample of 73 auditors of varying experience.

Findings

It is found that auditors who completed an internal control questionnaire (ICQ) correctly identified more internal control design weaknesses than auditors who prepared a narrative. Internal control evaluation experience moderated this effect. The results imply that the questionnaire documentation format stimulates an auditor's existing internal control knowledge, thereby enhancing performance when identifying internal control design weaknesses.

Practical implications

These findings suggest that there are important benefits to auditors that may be lost if they choose not to use questionnaires for internal control evaluation. These findings have important implications for practitioners and standard setters, who appear to be gravitating away from the use of standardized ICQs.

Originality/value

The results of this study may assist organizations that are considering what form their internal control documentation should take in response to the Sarbanes‐Oxley Act of 2002.

Details

Managerial Auditing Journal, vol. 21 no. 9
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 13 September 2011

Axel Winkelmann and Burkhard Weiß

Financial institutions have been engaged in numerous business process reengineering (BPR) projects to make their organizations more efficient. However, the success of BPR…

Abstract

Purpose

Financial institutions have been engaged in numerous business process reengineering (BPR) projects to make their organizations more efficient. However, the success of BPR projects in banks varies significantly and it remains a challenge to systematically discover weaknesses in business process landscapes. Based on the flow chart notation language this paper seeks to argue for the definition of weakness patterns in order to automatically identify potential process weaknesses.

Design/methodology/approach

The authors developed weakness patterns in the flow chart notation language based on design science principles. To systematically derive process weaknesses that can be formalized, they analyzed each element of the flow chart notation as it was used in a real‐life case. They furthermore tested the identified patterns in reality in order to evaluate their validity.

Findings

The authors identified various potential weakness patterns that helped in automatically identifying weaknesses in process models. To some extent these findings are generalizable and transferable to other process modeling languages.

Research limitations/implications

The pattern‐based approach depends upon how well structural weakness patterns are defined and formalized. Identified problems remain “potential” weaknesses until a manual analysis reveals that the identified potential weaknesses are actually real weaknesses or not, e.g. due to law regulations.

Practical implications

Using weakness patterns allows for automatically identifying potential process weaknesses in existing flow chart models. This way, this research helps in improving the so far manual analysis of process model landscapes.

Originality/value

The approach is a new way of looking for process weaknesses through process weakness patterns.

Details

Business Process Management Journal, vol. 17 no. 5
Type: Research Article
ISSN: 1463-7154

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Article
Publication date: 26 July 2013

John R. Kuhn, Manju Ahuja and John Mueller

The purpose of this study is to investigate the relationship of weaknesses in IT‐related internal controls to companies' overall financial performance and health.

Abstract

Purpose

The purpose of this study is to investigate the relationship of weaknesses in IT‐related internal controls to companies' overall financial performance and health.

Design/methodology/approach

The study examines four accounting measures: liquidity, solvency, profitability, and market value. During the four‐year period of 2004‐2007, the authors identified companies that reported at least one material IT weakness and matched them with a similar set of companies with no reported material weaknesses. Additionally, for a subset of the companies in which a good match could be identified, a second data set was developed for comparison of companies reporting only material non‐IT weaknesses.

Findings

As expected, companies reporting IT weaknesses experienced less of an ability to pay short‐term and long‐term debts, earned lower profits, and possessed lower market value than companies with no weaknesses. Companies reporting IT weaknesses experienced worse financial performance and health than companies with non‐IT weaknesses.

Research limitations/implications

At the time of this study, most foreign registrants listed on US stock exchanges had not completed and filed their initial SOX 404 assessment with the SEC. Furthermore, small public companies (i.e. under a $75 million market capitalization) were not required to comply with 404 reporting requirements at the time of this study. In addition, Compustat provides information only on publicly traded companies.

Originality/value

The current study builds on IT governance research in two key ways. First, academia and industry must move past the discussion of IT governance design to examine the performance of IT governance efforts (i.e. effectiveness of controls audited by an independent third party) in relation to key financial performance and health indicators. Second, this study uses more objective measures of IT governance than were available in the past (i.e. the internal control and financial data reported in companies' audited financial statements). The results provide insight into the relationship of IT governance to overall financial well‐being.

Details

International Journal of Accounting & Information Management, vol. 21 no. 3
Type: Research Article
ISSN: 1834-7649

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Article
Publication date: 1 February 2006

Mohammed AlMadhoun

The main objective of this paper is to discuss the relationship between obstacles and weaknesses facing the development of MTPs and SMEs. In recent years many management…

Abstract

Purpose

The main objective of this paper is to discuss the relationship between obstacles and weaknesses facing the development of MTPs and SMEs. In recent years many management training programmes (MTPs) of an off‐the‐job nature have been established in Palestine, after the peace agreement, in order to find a solution for apparent lack of managerial strength, especially amongst SMEs.

Design/methodology/approach

To demonstrate the effects of obstacles on SMEs, different but relevant sets of variables were employed. The logistic regression model was used to determine and analyse the effects of the independent variables on the dependent variables.

Findings

To a large degree the variables established the validity of the research hypothesis that “there is a relation between some obstacles and weaknesses and SMEs' development”. However, the primary data were generated through a survey of SME managers who have participated in management development training programmes in Palestine. It can be concluded quite clearly that generally there is a relationship between the acquisition of some obstacles and weaknesses and the development of SMEs. Moreover, managerial factors are prime determinants of the development, failure or survival of SMEs. Logistic regression shows that the relation between the development of SMEs and obstacles and weaknesses is significantly positive. Previous findings and research results can be used to enhance the strategic planning and hence the performance of small businesses. However, there is much to be done in terms of managerial development for greater efficiency.

Originality/value

Provides trainers with a means of evaluating and assessing training and thereby improving the quality of training while it is in progress via measurement of the individual needs of managers.

Details

Journal of European Industrial Training, vol. 30 no. 2
Type: Research Article
ISSN: 0309-0590

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Article
Publication date: 1 December 2000

Mikko T. Siponen

Even though the human component has been recognized to have a crucial role in information systems (IS) security, the human issues have not received much attention…

Abstract

Even though the human component has been recognized to have a crucial role in information systems (IS) security, the human issues have not received much attention. Recently a few approaches aimed at minimizing human‐related faults in the area of IS security have been put forward. This paper analyses different approaches aimed at minimizing user‐related faults. The existing approaches will be analysed from the viewpoint of their theoretical background, the research approaches employed, the research objectives and the organizational role of IS security. As a result, a new taxonomy, a comparison and critical analyses of the strengths and weaknesses of state‐of‐the‐art approaches shall be presented. Moreover, several issues that future research should explore and practitioners should consider when applying the results of the existing research are suggested.

Details

Information Management & Computer Security, vol. 8 no. 5
Type: Research Article
ISSN: 0968-5227

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Article
Publication date: 1 February 2021

Mahdi Salehi and Fatemeh Ghasempour

This study aims to assess the influence of material internal control weaknesses (ICWs) on investment in intangible assets, capital structure and commercial risk of

Abstract

Purpose

This study aims to assess the influence of material internal control weaknesses (ICWs) on investment in intangible assets, capital structure and commercial risk of organizations. Also, it analyses the impact of investment in intangible assets on the presence of material ICWs. This paper expects that ICWs and investment in intangible assets are interactively incorporated.

Design/methodology/approach

The statistical population of this study includes listed firms on the Tehran Stock Exchange during 2012-2017, selected using the systematic elimination method. A total of 588 firms is selected as the final sample of the study. Four hypotheses are developed to meet the study’s objectives and data analysis is carried out using the panel data method in Stata Software.

Findings

Results show that material ICWs have a positive and significant impact on investment in intangible assets and financial leverage. Moreover, this study finds that investment in intangible assets deteriorates the ICWs’ degree. However, the findings show no significant relationship between ICWs and commercial risks of companies.

Originality/value

The current study fills the gap in the literature science; there is no evidence on the subject of the study.

Details

Management Research Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-8269

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Article
Publication date: 2 July 2018

Anuar Nawawi and Ahmad Saiful Azlin Puteh Salin

The purpose of this study is to investigate the weaknesses of internal control in expenditure claim procedure and to identify the opinions of employees regarding an…

Abstract

Purpose

The purpose of this study is to investigate the weaknesses of internal control in expenditure claim procedure and to identify the opinions of employees regarding an occupational fraud. This study also attempts to examine the most popular occupational fraud committed by the employee and whether a company’s working environment contributed to the fraud.

Design/methodology/approach

A case study approach was adopted to investigate and analyse the weaknesses of the internal control and occupational fraud incidents. A mixed method of data collection, specifically, survey questionnaire and document analysis were used.

Findings

This study found that the internal control of the expenditure claim procedure was weak and needed improvement. This study also found that a strong internal control and a better remuneration paid to the employees could reduce the risk of the occupational fraud committed in the company. In terms of fraud types, this study discovered that claims on mileage, followed by petrol, accommodation and suppliers’ invoice were the most popular occupational frauds committed by the employees. Finally, employee dissatisfaction and poor working-environment culture influence occupational fraud’s level in the organizations.

Research limitations/implications

The results provide further confirmation of the fraud triangle theory on the causes of fraud, i.e. opportunity because of a weak internal control and financial pressure because of low and non-standardized salary. This study, however, was conducted only on one company.

Practical implications

This study provides some recommendations to overcome the weak internal control and improve employees’ satisfaction which lead to better working environment. Thus, opportunities for fraud in the company can be reduced.

Originality/value

This study is original, as it focusses specifically on occupational fraud which is rare in fraud literature, particularly for a study that is conducted in developing markets like Malaysia. It also has examined various related sensitive documents and reports of employee frauds that are generally difficult to be accessed by researchers.

Details

Journal of Financial Crime, vol. 25 no. 3
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 1 September 1985

Robert Sheldon

All aspects of business life necessitate organisation, and communication is no exception. Self‐organisation implies thinking out how best to accomplish one's tasks, and…

Abstract

All aspects of business life necessitate organisation, and communication is no exception. Self‐organisation implies thinking out how best to accomplish one's tasks, and then doing them with a will. Intelligent people recognise the need for planning, but often overlook the vital part played by the will. Weakness of it can cause peculiar difficulties in communication. There are folk who seem to lack any will to communicate, because by nature they are retiring, reticent or simply uncooperative. Others reckon that by keeping information to themselves, or at best passing on only what suits them, they can gain or retain power. If you wish to organise yourself to communicate, you should first examine yourself for signs of these internal barriers. If you find them, you have some self‐development to do to avoid becoming an obstruction to the smooth running of your firm. This can happen whether you work for a large company or a small one. Indeed, a non‐communicator can cause proportionately more disruption in the smaller unit. It is much easier for the key person among five employees to bring them all to a halt for want of information or instructions than for the chairman of a concern five thousand strong, in which delegation is normally practised and other directors are at least partly in the know.

Details

Education + Training, vol. 27 no. 9
Type: Research Article
ISSN: 0040-0912

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Article
Publication date: 20 February 2017

Andrew West

The purpose of this paper is to examine how Aristotle’s ethics can be applied to the ethics of professional accountants (PAs), in relation to the approach adopted by the…

Abstract

Purpose

The purpose of this paper is to examine how Aristotle’s ethics can be applied to the ethics of professional accountants (PAs), in relation to the approach adopted by the International Federation of Accountants (IFAC), and to consider the reasons that justify the Aristotelian approach.

Design/methodology/approach

The paper outlines IFAC’s approach and identifies several weaknesses. Three themes of Aristotle’s Nicomachean Ethics are applied to the work of PAs. Reasons why this perspective is more suitable for PAs are then articulated.

Findings

Several aspects of Aristotle’s ethics can be fruitfully applied to the ethics of PAs. These include the relationship between function, goals and the good, an awareness of the human goal to achieve eudaimonia, the development of both excellences of character and of intelligence, and the significance of non-rational aspects of morality, including emotions, will, responsibility and choice.

Research limitations/implications

This perspective provides an alternative conceptualisation of the ethics of PAs. Although it does not provide concrete guidance regarding what the ethical approach to specific situations may be, it presents a useful counterpoint to existing approaches that are largely deontological and utilitarian.

Practical implications

This paper provides accountants in practice with a more comprehensive and adequate perspective on what it means for a PA to be ethical, and raises several issues related to how ethics is included in the education and training of accountants.

Originality/value

Investigating the philosophical basis for professional ethics approaches professional codes of ethics in a way that it is not typically considered. The paper also provides a more comprehensive application of Aristotelian ethics than previous work.

Details

Accounting, Auditing & Accountability Journal, vol. 30 no. 2
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 1 February 1996

Monte L. Matthews

Offers a case study describing how the Fossil and Hydro Power (F&HP) Organization of the Tennessee Valley Authority ‐ a finalist for the 1995 Presidential Award for…

Abstract

Offers a case study describing how the Fossil and Hydro Power (F&HP) Organization of the Tennessee Valley Authority ‐ a finalist for the 1995 Presidential Award for Quality ‐ has taken information from feedback reports and other sources, and developed a strategy for implementing areas of opportunity into its core business. The strategy expands the plan‐do‐check‐act logic into a plan‐do‐knowledge‐act model which couples assessment information with theory ‐ in the form of the conceptual guidelines of the Baldrige criteria ‐ to create knowledge. Details how the model has been implemented at F&HP over the past three years, and describes the resulting accomplishments.

Details

The TQM Magazine, vol. 8 no. 1
Type: Research Article
ISSN: 0954-478X

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