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In 1954, the American Institute of Certified Public Accountants (AICPA) Committee on Accounting Procedure released an auditing book, which listed under the heading “Material” certain items of which it cautioned “material errors” could occur (AICPA, 1954, p. 1). From this date until the present, the accounting profession has struggled in its endeavors to find both a suitable definition and associated guidance to determine the materiality of information provided to financial statement users. Accordingly, in September 2015, the Financial Accounting Standards Board (FASB) issued two exposure drafts that address the concept and interpretation (our emphasis) of materiality. The releases are Proposed Amendments to Statement of Financial Accounting Concepts, Conceptual Framework for Financial Reporting; Chapter 3: Qualitative Characteristics of Useful Financial Information (Financial Accounting Standards Board (FASB), 2015a) and Proposed Accounting Standards Update, Notes to Financial Statements (Topic 235) Assessing Whether Disclosures Are Material (FASB, 2015b). In this article, the authors focus on the Chapter 3 amendments (FASB, 2015a), which proposes a new definition whose genesis is based on the US Supreme Court definition of the concept. Accordingly, the authors examined the views of two stakeholders in the US financial reporting system, auditors in large public accounting firms, and Chief Financial Officers of the Fortune 1000 companies, regarding their perceptions of the proposed definition. The authors developed the research instrument to evaluate their perceptions of the proposed definition’s potential impact on various aspects of the audit and financial reports. The authors found that both populations have negative perceptions of the materiality definition in the exposure draft and an interpretation of the responses did not indicate an addition of any benefits from its adoption. Subsequent to our solicitation for our subjects’ opinions, the FASB voted unanimously in November 2017 to remove the reference to materiality as a legal concept (FASB, 2017) and in August 2018 (FASB, 2018) amended FASB Concept Statement No. 8 to replace the materiality definition with language similar to the previously superseded FASB Concept Statement No. 2. However, as the authors will explain in this article, the fact that three authoritative definitions exist, which continue to present problems for financial statement preparers and auditors. In this analysis, the authors find evidence that auditors and investors continue to see a significant difference between the terminology of “users” and “reasonable resource provider” within the various materiality definitions.

The new definition of internal auditing defines the function as an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. The purpose of this paper is to summarize an assessment of this new definition obtained through structured interviews from 11 internal audit directors of large publicly traded companies. The responses from the directors indicate that there are wide differences in viewpoints and objectives; but a definite shift has occurred in the overall scope of internal audit towards operational activities. While most of the interviewees are in conceptual agreement with the new internal audit definition, an underlying warning is vocalized: “Don’t throw out the franchise”. That is, the traditional role of the internal auditor should not be completely abandoned. These, along with other responses pertaining to related issues and suggestions for future research, are summarized throughout the paper.

As competition in the global economy grows, management systems are becoming increasingly complex and diverse. Management system audits, applied for the examination of system effectiveness and compliance with planned arrangements, seem to be following the same path. This paper addresses the fundamental models, concepts, principles and practices of management system auditing, with the objective of improving the consistency and effectiveness of audits across quality, environmental, financial, safety, maintenance and other auditing disciplines. The concept of a generic audit is introduced on the basis of the systems approach. Discipline‐specific audit definitions are analyzed, and a generic audit definition is depicted. Quality, environmental and accounting audit principles are compared, and a set of basic features of a generic audit is illustrated and discussed. Common audit practices are subsequently illustrated, followed by an outline of the structure and content of a generic audit guideline, together with the proposed two‐prong approach to the development of the generic audit.

Part IV provides readers with the extant requirements for the application of materiality to recognition, measurement, presentation, and disclosure in the financial statements. This part also includes a detailed critical review of the recent Practice Statement on materiality, the FASB’s proposed ASU on the notes and the amendments to the Conceptual Framework proposed by the IASB and the FASB.

The part expands to issues that are typical of Management Commentary, including the SEC guidance on materiality in Management Discussion and Analysis.

It informs about the complexities and subtle differences between financial statements and bookkeeping and the different standards of reasonableness versus materiality.

A section moves from materiality to material misstatements and covers the application of materiality in auditing.

Another section goes in depth on internal control over financial reporting, showing the linkages between materiality and risk appetite and risk tolerance and the related application guidance.

The purpose of this paper is to analyse and comment on recent enhanced pronouncements on internal auditing.

The paper uses content analysis of five 2012-2013 sources of guidance, set out in the tables of this paper and summarised within the text, together with conceptual interpretations.

Recent pronouncements respond, with considerable consensus, to stakeholder and public concerns and fill a partial vacuum left by The Institute of Internal Auditors' Standards. Principally this is about successfully enhancing the scope of internal audit and internal audit's independence from management.

While the paper is conceptual rather than empirical, it builds on the processes followed by the parties who developed the examples of enhanced guidance reviewed in this paper. Those processes included careful development by leaders in the field, public consultation of preliminary proposals, and final amended guidance based on feedback received.

There are implications for staffing of internal audit functions and the seniority and calibre of chief audit executives.

There has been no other attempt to map these developments. It has been done with a view to identifying possible ways forward for internal auditing, especially those which have a high degree of support and which are still to be incorporated into generally accepted internal auditing.

Practising internal and external auditors regularly find that crucial concepts governing how they operate are the twin terms of independence and objectivity. Part of the problem is that the two terms are often equated. The impact can be conflict with the auditee, misunderstanding with other stakeholders, impairment of efficiency and effectiveness, and role conflict within the internal audit department. The Institute of Internal Auditors is reviewing some of the cherished notions of internal audit in the light of pressures and developments in the business environment. It has already produced a new definition of internal auditing, which, as before, includes the terms independence and objectivity. Consistently, it decided to re‐evaluate these two terms, and established an international research team. This was the briefing submission from the UK, which was highly influential in determining the final product, not yet in the public domain. It considers professional statements and standards, research and developments in both internal and external auditing.

This paper aims to examine the effectiveness of the legal response by Nigeria to the sustainable management and use of revenue from the extractive industry in its enactment of the Nigeria Extractive Industry Transparency Initiative (NEITI) Act 2007. It hopes to contribute to the development of Nigeria’s and other countries’ Extractive Industry Transparency Initiative-based regulations or policies intended for the sustainable exploitation and management of revenue from the extractive industry.

The paper is qualitative and uses critical analysis to explore the potentials and limits of the NEITI Act vis-à-vis its promises and capabilities. The article concentrates on the analysis of the sections providing for the objectives of the Act, its functions, its auditing and reporting requirements and timeline for publications of audits and reports for purposes of transparency, accountability and public debate.

The paper finds that although the intendment of the Act appears positive, the sections providing for the achievement of its objectives and functions are bedeviled with several ambiguities, which undermine its effectiveness.

The NEITI Act is as yet neither a basis for the prosecution of any individual and/or organization nor been legally challenged in court. As such there is no case law to exemplify the practical application of its provisions. However, logical analysis and review of the Act suggests that more needs to be done to increase its effectiveness.

The paper makes the case for the proper definition of terms, stipulation of clear timelines and creation of enforcement functions in legislations, especially in laws that aim to regulate potential irregularities that may provide huge financial rewards for perpetrators and/or undermine a society’s socio-economic development.

This paper boldly questions the effectiveness and functionality of the NEITI Act 2007 and lays out a framework for its improvement. Also due to serious dearth of scholarly work on NEITI Act 2007, this paper is the first research work to explore the effectiveness of the NEITI Act 2007 from a legal perspective.

A rationale for including operational auditing as a major component in the primary auditing course, as well as in subsequent courses, in the auditing curriculum is developed. Reports and statements from professional groups and commissions, together with accounting education literature, provide a primary resource. Problems in the auditing curriculum are identified, learning style theory and the education of accountants is explored and the objectives to provide support to achieve the educational goals identified by the various constituencies are presented.

Examines the environmental legislation facing companies in the United Kingdom. Discusses the legislative background, environmental audit definition, audit types, the American experience, the reasons for auditing, the auditing team, collecting information, conducting the audit, and the audit report. Concludes that the environmental legislation means a period of uncertainty for the commercial property sector, the evidence from American industry showing that any party can demand an environmental audit.

The purpose of this paper is to synthesize relevant theoretical and empirical literature to develop propositions and suggest a research agenda on the antecedents and organisational performance implications of internal audit effectiveness.

The paper employs institutional theory and Karl Marx's theory of the “circuit of industrial capital” to synthesize relevant internal audit literature to develop theoretically justifiable propositions and highlight an operational research agenda.

Propositions and a research agenda are provided on potential antecedents of internal audit effectiveness and its possible association with company performance measured as rate of return on capital employed. Also, key variables are identified and operationalisation issues discussed.

As the extant literature does not provide a canon of internal audit effectiveness, the paper's originality is its argument that a positive association between compliance with standards for the professional practice of internal auditors and organisational goal achievement could serve as an approach to assess internal audit effectiveness. Furthermore, the use of the two theories in combination provides additional insights into identifying the antecedents of internal audit effectiveness and its measurement.