Audit Area Research Articles

Importance of internal audit for the Ministry of Defense and the Serbian Armed Forces

Internal audit is an established independent, highly professional and objective, assessing and advisory activity, which is done in order to provide the management with services in order to create new value and improve the business. It achieves its objectives through a systematic and disciplined approach to the assessment and improvement of the effectiveness of the risk management, control, and management. The area of internal audit extends from reviews of financial statements, to verification and evaluation of the effectiveness and efficiency of the entire business process. Bearing in mind that the needs of the defense system are of the highest importance for any country, the necessity of establishing the internal audit is the most effective mechanism for financial and operational improvements in the business operations, aimed at increasing the combat readiness, with legal, dedicated, cost-effective and efficient use of budget funds. This paper presents the scope and legal base of the internal audit in the Ministry of Defense and the Serbian Armed Forces, on the general cognitive bases, through presenting the concept and importance of internal audit. It also points to the key areas of locating the internal audit in the defense system, which can contribute both to costeffectiveness and efficiency, and greater overall value.

Starting from scratch? Analysing early institutionalization processes: the case of audit governance

ABSTRACTThis article examines the institutionalization of Community governance in the area of audit in the period prior to the establishment of the European Court of Auditors. Drawing on the literature on institutionalism and early supranational governance, it puts forward an original framework for analysing institutional dynamics that distinguishes between the institutional and the organizational/individual level, and between political and social space both inside and outside the institution. It provides a way of identifying the functions of institutions-in-the-making and distinguishing the locations of actor interactions. It then applies this framework and expectations to a longitudinal analysis of the Audit Board of the European Communities, based on the close reading of the minutes of more than 200 meetings over two decades. It argues that the rule system and normative order of the Board, as well as Community audit arrangements more broadly, resulted from various patterns of intra- and inter-institutional interaction that brought resistance, conflict and contestation.

Competencias profesionales y la empleabilidad, para egresados y titulados de la carrera de auditoría

Entre los objetivos formulados en la declaración de Bolonia (1999), y que son el eje sobre el que se sustenta el nuevo paradigma educativo en la educación superior, se encuentra: “Formular criterios académicos, competenciales y de cualificación profesional que respondan a la demanda del mercado laboral y que permitan responder a los retos educativo, laborales y sociales actuales”. La Conferencia de Berlín (2003), pone énfasis en la empleabilidad de los graduados, La Conferencia de Bergen (2005), señala que para mejorar el empleo de los graduados, es necesario reforzar el diálogo con Empleadores y Agentes sociales.
 A raíz de los constantes cambios generados en la profesión y la necesidad de adecuarse a ellos permanentemente, se hace necesaria una evaluación constante de las capacidades y conocimientos de los profesionales del área de la auditoría. La presente investigación realiza un análisis de la valoración de las demandas de mercado, de las competencias profesionales para la inserción laboral y remuneración de los titulados de la carrera de Auditoría en la Ciudad de La Serena, con el objetivo de entregar información actualizada de los factores de empleabilidad, como insumo útil, para la orientación de los planes y programas de estudios, movilizando el capital intelectual y alineándolo a lo demandado por los agentes socioeconómicos.
 El estudio se configuró una perspectiva mixta., El rasgo cualitativo se manifiesta en la obtención de información de los egresados de carreras de auditoría, considerados como agentes estratégicos mediante las percepciones y visiones subjetivas que estos entregan, mientras que lo cuantitativo se expresa en función del análisis de datos obtenidos en la aplicación de la encuesta de inserción de l’Agència per a la Qualitat del Sistema Universitari de Catalunya (AQU).
 La investigación permitió identificar las competencias profesionales más valoradas en el mercado para los Contadores Auditores recientemente egresados, así como, confirmar la importancia de las características personales, como factor determinante en la empleabilidad. Se determinó que los egresados establecían una relación entre competencias, rubro de desempeño y el nivel de remuneraciones, así como una valoración de la calidad del trabajo.

Особенности аудита информационной безопасности бизнес-систем

In the proposed article, there were summarized and systematized views on information security audit business
 systems. As a result of analysis the author expressed its viewpoint on an opportunity to apply the mentioned area of audit
 to permanent impact of external environment on the business entities, described its essential advantages for economic
 system of the business entities.

SRC MODEL TO IDENTIFY BEGUILING REVIEWS

Today, e-trade sites are giving colossal number of a platform to clients in which they can express their perspectives, their suppositions and post their audits about the items on the web. Such substance helped by clients is accessible for different clients and makers as a significant wellspring of data. This data is useful in taking imperative business choices. Despite the fact that this data impact the purchasing choice of a client, however quality control on this client created information is not guaranteed, as audit area is an open stage accessible to all. anybody can compose anything on web which may incorporate surveys which are not true. as the prevalence of e-commerce destinations are hugely expanding, nature of the surveys is deteriorating step by step subsequently influencing clients’ purchasing choices. This has turned into an enormous social issue. From numerous years, email spam and web spam were the two primary highlighted social issues. at the same time these days, because of notoriety of clients’ enthusiasm toward internet shopping and their reliance on the online audits, it turned into a real focus for audit spammers to delude clients by composing sham surveys for target items. To the best of our insight, very little study is accounted for in regards to this issue reliability of online reviews. To begin with paper was distributed in 2007 by NITIN JINDAL & BING LIU in regards to review Spam detection. In the past few years, variety of techniques has been recommended by researchers to accord with this trouble. This paper intends to introduce Suspicious review Classifier model (SrC) for identifying suspicious review, review spammers and their group.

Особенности риск-ориентированного внутреннего аудита в страховых компаниях

The article analyzes the most significant risks in insurance company’s activities, measures to reduce these risks and methods of follow-up internal audit. Key areas of internal audit of risk-management implementation are identifiedfor each type of risk (insurance, repayment and market risks). The conclusion is drawn about further development of internal audit in insurance companies, particularlythe need to develop methods and forms of preparation of quarterly reports on risk management models.

The Removal of a Specialist Oversight Body for Local Public Audit: Insights from the Health Service in England

AbstractThe abolition of the Audit Commission in England and Wales removes the ‘protector of the public purse’. The oversight body and its audit practice are largely replaced by the private sector regime and audit firms. We analyse the audit market for health service foundation trusts, an area of local public audit that operates without oversight from the Commission. We find evidence of premiums paid to some Big4 firms and that the presence of specialist public service auditors results in fee discounts. The firms limit their liability and assurance of audit quality is reduced under new audit regimes and governance structures.

KPMG cuts through complexity for young recruits

Purpose – Describe how KPMG in the UK has expanded its school-leaver and apprenticeship schemes to give more young people the chance to experience working life in the areas of auditing, taxation and business advice. Design/methodology/approach – Explains the reasons for the programs, the form they take and the successes they are achieving. Findings – Rreveals that KPMG welcomed 71 school-leavers on to its 12-month paid work-experience program last year, increasing the intake from 25 candidates the year before. The company also welcomed 32 new apprentices to its business-support academy scheme, following a successful pilot involving seven apprentices the previous year. Practical implications – Describes how the Star program offers talented school-leavers who have just completed their A-levels or equivalent the opportunity to gain 12 months of paid work experience, while the apprenticeship program offers 16- to 24-year-old apprentices the opportunity to spend 13 months working in various functions across the firm. Apprentices obtain first-hand work experience and exposure to the business while completing a National Vocational Qualification (advanced tier 3) in business and administration through the firm’s training partner, BPP Training. Social implications – Explains that the drive to recruit trainees into KPMG is part of its long-term recruitment strategy to attract talented people from every walk of life. Originality/value – Points out how KPM’s programs are helping young people to fulfill their potential and succeed in a company that they would not necessarily have had the opportunity to join through conventional means.

Auditing Subsequent Events: Perspectives from the Field

SUMMARY:A research synthesis team formed by the Auditing Section of the American Accounting Association recently authored a paper (Chung et al. 2013) addressing the audit of subsequent events (SEs). The audit of SEs is a difficult audit area, as approximately one-third of the Public Company Accounting Oversight Board's inspection reports and numerous Securities and Exchange Commission enforcement releases identify deficiencies in this area (Chung et al. 2013). Chung et al. (2013) developed a model and proposed a series of research questions encouraging future academic research in this area. In this paper, we address several of these questions by surveying 76 practicing auditors. We summarize the auditors' responses and present recommendations that may be useful in improving audits of SEs.

The Effective Use of the Audit Risk Model at the Account Level

Auditing standards prescribe a risk-based approach where auditors assess the risk of material misstatement and then design and perform audit procedures to reduce audit risk to an appropriately low level. Prior research suggests that auditors are responsive to high control risk assessments (CRA) but that this response is, perhaps, only partially effective at reducing audit risk, with relatively little insight into where and why this occurs. By refining analyses to more detailed levels of the audit, I extend this research by providing further insight into auditors’ response to high CRA. I examine and find that audit fees are significantly higher for high CRA in revenue relative to high CRA in other accounts, suggesting that auditor effort in response to high CRA is more pronounced in audit areas of particular interest and concern to investors and regulators. Despite this, I find evidence suggesting that revenue is the only audit area examined where auditor effort in response to high CRA does not attenuate the likelihood of misstatement. Finally, because auditors face time constraints, I examine whether increased effort in response to high CRA in certain audit areas diverts auditors’ attention from other areas with lower risk, thus contributing to the overall association between misstatements and internal control deficiencies documented in prior research. I find a greater likelihood of misstatement in non-core operating accounts with lower CRA as audit effort increases in response to high CRA in revenue, consistent with the explanation that high CRA in revenue may divert auditors’ attention from other areas of the audit with lower CRA.

NOVEMBER 2013 PLACEMENT ADS

NOVEMBER 2013 PLACEMENT ADS

Signaling Social Responsibility: On the Law and Economics of Market Incentives for Corporate Environmental Performance

This article analyzes the law and economics of market internalization: the capability of markets to both penalize and reward firms for their environmental, health and safety performance. As for market sticks, the article maintains that market transactions - both private and public sales of corporate assets as well as transactions in publicly traded securities - are an important avenue through which firms realize comparative advantages in regulatory compliance, and that such transactions have the potential to significantly enhance corporate environmental and social performance. Asset transactions tend to drive environmental cleanup and transfer assets to firms that are better able to know about and comply with relevant regulatory directives. On public securities markets, the very fact that traders are imperfectly informed about firm-specific regulatory risk causes disproportionately large market reaction to the revelation of such risks. The incentive to avoid such large, negative market reactions to the revelation of negative information leads may induce a higher level of compliance than were no such market reaction anticipated. Incentives for voluntary disclosure of negative information are complex, but as is true of financial disclosure, mandatory disclosure requirements may be crucial in allowing firms to make such credible commitments. As for the potential positive rewards (in the form of price premia) that SR consumers and investor offer to firms that they perceive to be pursuing CSR, the fundamental problem is that CSR cannot be directly observed by consumers and investors. Unless firms can find a credible signal of CSR, the positive potential of the market may go unrealized. Inevitably, much corporate communication regarding CSR is (from a game-theoretic point of view) cheap talk. There is likely to an uninformative, pooling equilibrium in which only firms in industries with well-recognized, large SR impacts are likely to engage in CSR cheap talk, so that such reports do not generate information on the relative economic and social performance of firms within the category of firms that report. The article's policy conclusions include the following: - The SEC's standard requiring the disclosure only of those environmental regulatory costs and liabilities that are probable and reasonably estimable is sensible as tracking the market's limitations in coping with risk versus uncertainty, but the SEC's almost complete failure to enforce its rules regarding the disclosure of environmental risks has made it impossible for corporate managers to credibly commit to being one of the guys by voluntarily disclosing such news. - As for the potential for legal liability for false assertions of CSR to deter bad companies from pretending to be good ones via their CSR communications (thus destroying the uninformative (or babbling) market equilibrium, the optimal liability system involves potential liability (because it gives plaintiffs access to civil discovery that allows for the discovery of information regarding corporate labor and environmental practices that otherwise would be asymmetrically available only to the corporate speaker), but liability that is strictly limited in amount. The market alternative of private, third party certification of CSR disclosures and assertions - a market response to SR consumers' and investors' demand for credible, reliable firm-specific information - is effective only if itself credible. While market reputation clearly helps ensure the truthfulness and credibility of private auditors' CSR reports, the risk of collusion between audited companies and their auditors is just as great when it comes to CSR as it is in the traditional area of financial report auditing. Just as with financial reports, the threat of holding auditors legally liable for intentionally or negligently false CSR audit reports may be necessary for private CSR auditing to generate credible information.

MARCH 2013 PLACEMENT ADS

<b>MARCH 2013 PLACEMENT ADS</b>

The Effects of Task Interdependency on Cooperative and Competitive Group Processes: An Example of Scheduling Audit Engagements

Our study investigates and tests the interaction of cooperative and co mpetit ive group processes and high and low task interdependencies on performance in scheduling staff auditors to audit areas. The task examined is the scheduling of staff auditors to audit areas. In one case, we assume managers schedule staff auditors to audit areas and in the other we assume staff auditors schedule themselves to audit areas. We measure performance as the total expected time of those scheduled to complete the audit areas, where less time t ranslates to better performance. Task interdependency varies depending on who performs the task. When managers schedule audit areas, task interdependencies arise related to information and scarce human resources, neither of which exist when staff auditors schedule themselves. Accordingly, because of the difference in task interdependencies, cooperative and competit ive group processes result in larger performance differences for managers scheduling staff auditors than for staff auditors scheduling themselves. The results of our laboratory experiment support this conclusion.

Internal Public Audit in the Financial Crisis Context

The financial crisis effects have left their mark on the area of internal audit, but the attention on the responsibility that internal auditors could have in preventing the onset of such a crisis is quite low. Audit plays a vital role in the entities functioning by contributing to economic credibility. In this paper we have presented the role and objectives of internal audit, the organization and activity of internal audit in local government in Romania, the outsourced system and how it helped in preventing and/or managing the economic downturn.

The Removal of a Specialist Oversight Body for Local Public Audit: Insights from the Health Service in England

The abolition of the Audit Commission in England and Wales removes the ‘protector of the public purse’. The oversight body and its audit practice are largely replaced by the private sector regime and audit firms. We analyse the audit market for health service foundation trusts, an area of local public audit that operates without oversight from the Commission. We find evidence of premiums paid to some Big4 firms and that the presence of specialist public service auditors results in fee discounts. The firms limit their liability and assurance of audit quality is reduced under new audit regimes and governance structures.

Importing international corporate governance codes in Greek publicly listed enterprises

PurposeThis study focuses on the evaluation of the introduction of international corporate governance codes such as Combined Code (UK) and King Report III (SA) in the Greek publicly listed enterprises. This research is based on a case study analysis of six publicly listed enterprises (three of them are traded in the high capitalization index and another three in the medium‐low capitalization index of the Athens Stock Exchange). The main purpose of this paper is to examine the extent of international corporate governance codes impact in the relevant local laws and regulations, as well as the adopted best practices.Design/methodology/approachQualitative research is carried out to address the research topic, using primary and secondary data. The primary source of this study is the professional experience of the author in the field of corporate governance within publicly listed enterprises, whereas secondary sources are the international corporate governance codes, Greek corporate governance laws, regulations and best practices, books, working papers and published articles.FindingsAlthough certain parts of international governance codes requirements have been applied by a number of Greek publicly listed enterprises, there is a long way to go to achieve best practice. The reason for this is the typical, however not substantial application of international governance codes requirements.Originality/valueResearch is proved to be very useful as it describes a gap analysis in the application of international governance codes in the areas of corporate governance, internal and external auditing, as well as the regulators therefore making it easier to identify potential areas for improvement.

Audit Partner Perceptions of Post-Audit Review Mechanisms: An Examination of Internal Quality Reviews and PCAOB Inspections

SYNOPSIS This study reports the results of a survey of 107 audit partners from large public accounting firms that investigates and compares partner perceptions of Public Company Accounting Oversight Board (PCAOB) inspections' and Internal Quality Reviews (IQRs): (1) predictability, (2) conduct, (3) reviewer qualifications and behavior, and (4) effects (i.e., on audits, partners, and firms). A majority of partners can or try to predict the year of both reviews and perceive that, relative to PCAOB inspections, IQR reviewers have a better understanding of firms' audit methodologies, IQRs focus more on whether firms follow their methodology, and IQRs examine more audit areas. In addition, partners believe that PCAOB inspectors are more focused on finding deficiencies than are IQR reviewers, and that IQR feedback is more timely and helpful for improving audit quality. Both reviews are perceived to impact professional reputation; however, partners perceive that PCAOB inspections increase their firms' litigation risk more so than do IQRs. Finally, less experienced partners perceive reviews as more invasive and as posing more consequences than do more experienced partners. We provide credible, informed perceptions of partners directly involved in both PCAOB inspections and IQRs (which heretofore have not been examined directly by practitioner or academic research) that should be beneficial to accounting researchers, practicing auditors, and regulatory bodies interested in understanding the perceived effects and effectiveness of PCAOB inspections and IQRs.

SEPTEMBER 2012 PLACEMENT ADS

SEPTEMBER 2012 PLACEMENT ADS

Practice nurses and general practitioners: perspectives on the role and future development of practice nursing in Ireland

To explore the role dimensions, competence and professional development needs of practice nurses in Ireland from both the general practitioner's and practice nurse's perspective and highlight any agreement/disagreement between the professions. Economic pressure on healthcare delivery is promoting a re-evaluation of professional roles and boundaries. This coupled with a primary care sector that is evolving prompted an investigation into the role dimensions and competence of the practice nurse. There is a lack of empirical data comparing the general practitioner's and practice nurse's perspective on the current role of the nurse, clinical competence (existing and required), strategic direction for the role and continuing professional development. A descriptive cross-sectional survey design was used. A random sample of general practitioners (n = 414) and a purposeful sample of practice nurses (n = 451) participated. Data from each profession were analysed and comparisons drawn. General practitioners and practice nurses agree (±5%) that the nursing role is centred on immunisation, direct clinical care and elements of chronic disease management. However, in some areas such as preconceptual advice, family planning, advice on menopause, continence promotion and research, there was a 30% difference between the general practitioners perceptions of the nurse's involvement and the practice nurse's actual involvement in the role. Perceived competency differed in a number of areas with nurses more likely to indicate competency in health promotion activities. Both disciplines acknowledged that only a minority of practice nurses were competent in audit, research and dealing with 'problems with living' (relationship breakdown, addiction and parenting). There is some congruence of opinion among practice nurses and general practitioners in Ireland regarding the current role of the practice nurse. Divergent opinions on the nurses' involvement in a particular aspect of the role may be due to the general practitioners underestimating the nurse's involvement in the role. Training is required in the areas of audit, research and 'problems with living'. This research provides data for role clarity and evidence-based role development for practice nurses within the context of evolving primary care services. It also indicates how general practitioners perceive the nursing role.