Attestation Services Research Articles

Pathways to Consolidate Corporate Governance by Incorporating Gaps in Management Accounting Practices: An Integrative Literature Review Research Approach

Corporate governance receives considerable attention from various stakeholders due to the search for potential agents that cause threats to sound corporate management practices. The fall of Enron and Arthur Anderson was an eye opener toward the journey of long years of corporate scandals and corruption. The Sarbanes-Oxley Act of 2002, which includes various codes and guidelines, evolved as an immediate solution to the problem. Traditionally, accounting has become an integral part of managing corporate governance as it is central to generating financial information for various stakeholders. However, research attention, so far, centers around public accountants due to their universal legitimacy in performing public account attestation services. Management accountants can also play important roles in strengthening corporate governance by instilling sound management accounting practices in various corporate affairs where governance is under threat. This dimension is grossly ignored in the existing literature, narrowing the role of accounting in a broader spectrum of governance. Applying the integrative literature review method as an epistemological paradigm, this study undertakes a theoretical attempt to highlight the roles that management accountants can play in strengthening the governance of firms from both external and internal perspectives. The incremental contribution of the article is to enlarge the remit of corporate governance by aligning the functionalities of management accountants with the mainstream study of corporate governance. It opens further research agendas for academics, practitioners, regulators, and other stakeholders.

Basic secure services for standard RISC-V architectures

Trusted Execution Environments (TEEs) have gained prominence as a means to enhance the security of complex system designs. However, TEE implementations such as ARM TrustZone and Intel SGX have been plagued by numerous vulnerabilities, prompting the research community to focus on identifying and resolving existing design flaws. Concurrently, the emergence of the RISC-V processor architecture presents an opportunity for widespread usage and customization.This research paper delves into the potential of the RISC-V architecture to incorporate TEE functionality, emphasizing the need to identify and mitigate possible pitfalls and vulnerabilities during the design phase. By examining current issues present in established TEE frameworks, we implemented and evaluated real-world services utilized by user applications and operating systems that leverage common TEE features on an up-to-date version of the standard RISC-V Instruction Set Architecture (ISA).Our findings reveal that the existing RISC-V ISA can successfully support secure file storage, cryptographic key management, and remote attestation services, employing standard-compliant unmodified RISC-V cores. However, our results also highlight the absence of mechanisms within RISC-V to ensure secure communication between the system and peripherals, thereby lacking means to interact safely with the user in the event of an operating system compromise. In conclusion, we discuss potential solutions to address this remaining challenge and suggest improvements for future research in securing communication channels and user interaction within the RISC-V architecture.

Pengaruh Penghargaan Finansial, Lingkungan Keluarga dan Nilai Intrinsik Pekerjaan Terhadap Minat Mahasiswa Akuntansi Untuk Berkarier Menjadi Akuntan Publik

Accounting students have a great opportunity to have a career as a public accountant, because those who can follow the professional education of public accounting are someone who has a minimum education of bachelor 1 (S-1), diploma IV or equivalent. A public accountant is an accountant who has obtained permission from the Minister of Finance to provide services, both in the form of attestation services and non-attestation services. Having a good and promising career is the hope and dream that every student wants. This study aims to determine the effect of Financial Rewards, Family Environment and Work Intrinsic Values ??on the Interests of Accounting Students for a career as a Public Accountant. The population in this study were students of the Private University, Accounting Study Program in Denpasar who had entered the 7th semester and above with a total of 2,326 students. The number of samples in this study were 100 respondents who had been determined by the purposive sampling method using the Slovin formula. The research method uses multiple linear regression analysis techniques.The results of this study indicate that Financial Rewards, Family Environment and Work Intrinsic Values ??have a positive and significant effect on the Interest of Accounting Students for a career as Public Accountants. The results of this study can be used as a basis in increasing the interest of accounting students to have a career as a public accountant by providing a deeper understanding and training related to public accounting. In the future, students can improve their ability and understanding of accounting in order to have a career as a public accountant.

How To Bind A TPM’s Attestation Keys With Its Endorsement Key

Abstract A trusted platform module is identified by its endorsement key, while it uses an attestation key to provide attestation services, for example, signing a set of platform configuration registers, providing a timestamp or certifying another of its keys. This paper addresses the problem of how a certificate authority binds the endorsement and attestation keys together. This is necessary for the authority to be able to reliably certify the attestation key. This key binding also enables the authority to revoke the attestation key should the endorsement key be compromised. We study all of the existing solutions and show that they either do not solve the problem or cannot be implemented with a real trusted platform module (or both). We propose a new solution which addresses this problem. We develop a security model for our solution and provide a rigorous security proof under this model. We have also implemented the solution using a real trusted platform module, and our implementation results show that this solution is feasible and efficient.

FACTORS HINDERING THE CONDUCT OF AUDITS OF CORPORATE SOCIAL RESPONSIBILITY REPORTS: EVIDENCE FROM POLAND

This article presents the results of empirical research conducted among audit firms in Poland regarding the factors hindering the provision of non-financial information verification and attestation services. The rapidly developing practice of non-financial reporting among socially responsible entities in Poland does not translate into the number of reports that are subjected to external audits. Despite the unquestionable need to confirm the reliability of non-financial data, services of this type are not provided by the majority of audit firms. The primary aim of the article is to identify the factors hindering the performance of audits of non-financial reports in Poland. The article identifies the entities operating in the Polish audit market in terms of selected features. The authors provided answers to three main research questions: What percentage of audit firms in Poland carry out the verification of non-financial reports? What is the size and the level of employment of audit firms in Poland? What factors hinder, in the auditors’ practice, the performance of audits of non- financial reports? To achieve the objective, a survey research was conducted among audit firms under the supervision of the Polish Agency of Audit Oversight. The theoretical basis of the article included a literature study on the audit of non-financial reports as well as an analysis of regulations governing this subject matter in Poland. This study is the first such review of factors that condition the use of such an important tool as an audit in non-financial reporting. The obtained study results indicate that only 2.3% of audit firms perform audits of CSR reports. The main factor that limits audit firms in the performance of this type of services is the low demand in this regard. Moreover, the audits of non-financial reports are limited by insufficient staff.

Accounting Implications of Blockchain: A Hyperledger Composer Use Case for Intangible Assets

ABSTRACTBlockchain technology, commonly associated with bitcoin cryptocurrency, attracted large amounts of investment, attention, and analysis. In addition to attracting the attention of investors, speculators, and regulators, implications for financial practitioners and organizations are increasingly apparent. Financial transactions, property transfers, audit and attestation services, supply chains, and numerous other areas of industry are continuing to integrate blockchains into operations. This paper bridges the gap between the technical concept of blockchain and relevance to the accounting field. By distilling technical components of blockchain into understandable components, practitioners and other users of this research are poised to better understand, explain, and apply salient concepts. This paper proposes a Hyperledger Composer use case method through which practitioners and researchers can familiarize themselves with blockchain concepts using an interactive demonstration of an accounting integration for intangible assets. Addressing the growing need for increased awareness, this paper builds a necessary skillset with blockchain technology and applications.

How Certain Engagement Letter Clauses Affect the Auditor’s Assessment of Perceived Engagement Risk for Nonissuers

AICPA auditing standards (e.g., AU-C210, par. 11) for audits of nonissuers require CPA auditors to use engagement letters or another suitable written understanding to clarify their and their clients' duties; these letters also minimize CPAs' potential legal liabilities to clients. But, the SEC, PCAOB and other authoritative bodies prohibit those clauses-fearing their use would impair auditors' independence. We survey 209 CPAs' responses to increasing risk across three engagement letter clauses that can change the level of auditor risk exposure, and measure the amount of data and fees auditors gather relative to changing engagement letter clauses in normal and unusual risk scenarios. We find that CPAs say they increase both the quantity of evidence gathered and their engagement fees in response to increasing risk, which suggests that CPAs' level of work depends much more on their assessment of perceived risks than on the three clauses minimizing their legal liabilities. Auditors further respond to an engagement's aggregate risk in the presence of risk-reducing clauses. We also find that while the clauses can lower the cost of the engagement's risk, auditors do not lower the amount of evidence gathered under the no-unusual-risk scenario, and significantly increase evidence when perceiving an increase in risk. Thus, support exists for authoritative bodies to permit such engagement letter clauses. While PCAOB standards affect only public companies, our results should be of interest to policy makers who oversee attestation services affecting both public and private companies.

Bridging the education-practice divide: The Salisbury University auditing internship program

Abstract This paper describes in detail the Auditing Internship Program offered each fall and spring semester by the Department of Accounting & Legal Studies at Salisbury University. The Program, which has grown and evolved over the past 20 years, was founded on the purported benefits of experiential learning and calls dating back nearly three decades for curricular change designed to enhance the core competencies of accounting graduates. The internship is organized and run as an actual accounting practice in which the instructor serves as the Executive Partner and maintains professional liability insurance though the AICPA carrier. Students, working in teams ranging in size from three to seven, serve as the professional staff. The client base consists of not-for-profit organizations that vary in size and complexity. Services range from limited scope consulting engagements to operational and financial audits. As evidence of program quality, in 2011 the practice successfully completed an AICPA mandatory peer review for quality of accounting, auditing and attestation services performed by AICPA members in public practice. Additional assessment data in the form of student and employer feedback indicate that the Program is meeting its stated objectives. The description of program operations, cost and fee structure, and implementation recommendations presented in this paper may be used as a guide for those faculty interested in implementing similar programs at their institutions.

Software quality in the clouds: a cloud-based solution

Cloud computing, an on-demand computation model that consists of large data-centers (Clouds) managed by cloud providers, offers storage and computation needs for cloud users based on service level agreements (SLAs). Services in cloud computing are offered at relatively low cost. The model, therefore, forms a great target for many applications, such as startup businesses and e-commerce applications. The area of cloud computing has grown rapidly in the last few years; yet, it still faces some obstacles. For example, there is a lack of mechanisms that guarantee for cloud users the quality that they are actually getting, compared to the quality of service that is specified in SLAs. Another example is the concern of security, privacy and trust, since users lose control over their data and programs once they are sent to cloud providers. In this paper, we introduce a new architecture that aids the design and implementation of attestation services. The services monitor cloud-based applications to ensure software quality, such as security, privacy, trust and usability of cloud-based applications. Our approach is a user-centric approach through which users have more control on their own data/applications. Further, the proposed approach is a cloud-based approach where the powers of the clouds are utilized. Simulation results show that many services can be designed based on our architecture, with limited performance overhead.

Does Auditor Tenure Reduce Audit Quality?

Reduced auditor independence and the rise of corporate accounting manipulations have caused trust of the users in audited financial statements to begin to decline, so users of financial statements are questioning whether public accountants are independent parties. This research issue is related to the Decree of the Minister of Finance No. 17 in 2008 about public accountant services. Giving attestation services, in the form of financial statements about an entity, are conducted by the audit firm for no longer than 6 consecutive fiscal years and by a public accountant for 3 consecutive fiscal years at the longest. The purpose of this research is to examine empirically the influence of auditor tenure on audit quality. Auditor tenure is measured as the length of the auditor-client relationship. Audit quality is measured by the propensity of auditors to issue a going-concern opinion. This study uses a sample of firms listed on the Indonesia Stock Exchange during the 2003-2008 period. Research analysis uses logit model to measure the effect of auditor tenure on the auditors’ propensity to publish a going-concern opinion. The hypothesis which states that the length of auditor tenure influences negatively the propensity of auditors to issue a going-concern opinion is statistically supported. This research is expected to provide empirical evidence about the importance of limiting of the auditor-client relationship.

Attesting Adios! Airways' XBRL Filings: A Case Study on Performing Agreed-upon Procedures

On 30 January 2009, the Securities and Exchange Commission (SEC) released Rule 33–9002. This rule phased in the required use of XBRL. The accuracy of mapping financial statement line items to the US GAAP taxonomy and the tagging of the financial statement facts are of fundamental importance to the accuracy of the XBRL instance document. Currently, there is no requirement for separate assurance on XBRL filings. However, given the significance of the information made available, firms may find it desirable to obtain attestation services. This case provides students with an agreed-upon procedures engagement plan based upon SOP 09–1 ‘Performing Agreed-Upon Procedures Engagements that Address the Completeness, Accuracy or Consistency of XBRL Tagged Data’ released by the Auditing Standards Board in 2009. Students assume the role of an engagement manager and complete an agreed-upon procedures engagement for the quarterly financial statements of Adios! Airways Inc. The case is of general application to an international setting.

SUCAS: smart-card-based secure user-centric attestation framework for location-based services

This work proposes a secure user-centric attestation service (SUCAS) framework that enables user of location-based services to create, share, and verify spatial-temporal evidence incorporated with user’s action information using tamper-resistant device such as the smart-card. The generated evidences can be used for protecting the owner’s rights in times of need. The SUCAS framework preserves user’s privacy by granting control to the user while protecting the integrity and authenticity of the evidences by using tamper-resistant device. The SUCAS protocol covers the process for evidence generation, evidence attestation, evidence sharing and evidence verification. A train delay certificate application was developed to evaluate the SUCAS framework. The results indicate that the evidences generated by SUCAS are trustable, verifiable and adhere to user’s privacy. Furthermore, the SUCAS framework can be applied to other applications that require attestation services provisioning. Attestation service has great potential in the information age as it provides a mechanism to certify the reliability of digital information.

Ierarchical Difference In Auditors Perceptions Of Lowballing: A Study Of Current Attitudes

<span>Auditors are in the business of providing to their clients the value of their attestation services for financial reporting. Auditors (and other accountants) have a strict Code of Professional Conduct which is enforced by the American Institute of Certified Public Accountants (AICPA). According to this Code of Professional Conduct (AICPA 1988), the AICPA sets forth the requirement that all auditors comply with generally accepted auditing standards (GAAS) in all audit engagements. These rules are a necessary part of the audit process helping to ensure a quality result for the stakeholders of the organization. Lowballing, the practice of bidding under or at cost for an audit in order to attract new clients, may violate the independence in appearance clause of the Code of Professional Conduct. Researchers and regulatory authorities appear to differ on their treatment of this issue. Differences in option (AICPA 1978 compared to DeAngelo 1981) appear to center around the interpretation of independence in the Code of Professional Conduct. This study evaluates current attitudes towards lowballing for all levels of professional auditors within four public accounting firms and specifically addresses the question of whether lowballing is a violation of the impendence in appearance section of the Code. The study also questions auditors as to their beliefs about the Code of Professional Conducts potential for change to accommodate the practice of lowballing.</span>

Assurance Services: The Expansion Of The CPAs’ Traditional Services In Local CPA Firms

The accounting profession has and is undergoing change in the traditional services that they are providing to their clients. This change is due to market and technological factors, such as: com- petition in the industry, demand for timely and relevant information for decision-making, de- mand for reliability of that information, and many other factors that are a result of the shift into an information and service oriented society. The profession is trying to change with these con- ditions. In 1993, the AICPA identified attestation services as the area earmarked for growth. Today, attestation services have been expanded into a new area of services referred to as, assur- ance services. Assurance services are considered the wave of the future, as well as, the lifeboat needed to keep the profession afloat. This study surveys local CPA firms in order to determine if they are changing and moving into the new assurance services area. This study addresses whether local firms are following the projected slow growth trend towards attestation and away from historically financial services. Also, this study addresses the research results of the Special Committee on Assurance Services to determine whether local CPA firms are performing assurance services, whether they are expe- riencing growth or decline in specified areas, and whether they are using the suggestions and recommendations of the Assurance Services Committee. The results indicate that attestation services appear to be continuing to grow at the modest growth trend that was projected in the 1993 study. There has been and appears that there will continue to be a move toward more attestation services, but that traditional services will still be very important. However, the assurance services are not experiencing the same sort of growth as attestation services. This lack of growth could be attributable to several factors.

Strategic Audit Materiality, Information Asymmetry, and Investment Efficiency

Regulators have proposed materiality standards in order to mitigate audit costs resulted from the Sarbanes-Oxley Act of 2002. We argue that materiality thresholds are a two-edged sword. Restrictive materiality thresholds increase the cost of misstatements, thereby reducing the cost of information asymmetry and increasing investment efficiency. However, investors may be negatively affected by litigation friction resulted from noisy audit evidence and inefficient legal systems. This economic trade-off creates the demand for materiality thresholds. We find that the optimal materiality thresholds are asymmetrical and contingent on firms’ reports. Investors impose restrictive materiality if firms’ reports are optimistic; otherwise, the discrepancy between audit evidence and firms’ reports may be ignored. We further identify the conditions under which the investor may benefit from auditors’ attestation services. Our analysis implies that a mandatory materiality threshold imposed by the Act may lead to investment inefficiency.

Security and Privacy in Pervasive Computing

In this issue's Works in Progress department, we have six projects. The first two projects address an individual's privacy concerns and preferences. The next entry discusses a project on data protection for electronic passports. The remaining three projects are investigating various types of privacy protection mechanisms for data collected in pervasive computing environments, by attestation services, and by voice recording systems.

IT attestation services: What you need to know

AbstractThe rapid growth in outsourcing information technology (IT)—and increased reliance on software application service providers—are fueling a demand for IT attestation services. The author explains what you need to know about them. © 2007 by Information Systems Audit and Control Association.

INDEPENDENCE: Clarification of the Profession's Primary Attribute

Independence has been long recognized as the hallmark of the professional accountant and an essential attribute when the accountant performs attestation and audit services. Recent scandals in corporate financial reporting have renewed concerns about the definition of independence and the profession's compliance with its own standards as well as with contemporary laws and government regulations applicable to auditor independence. This study strives to clarify the distinction between independence and the related attribute of objectivity and to demonstrate that both of these professional attributes can be operationally defined as Jungian personality constructs which are amenable to empirical investigation. It is hoped that clarification of these concepts will help strengthen the integrity of the profession and restore confidence in its important public service.

An Examination of the Effect of Consultation Review, Financial Dependence, and Moral Development on Auditor Judgment

Professional standards require auditors to be independent in the performance of attestation services. Critics of the accounting profession have expressed concern that pressure to maintain and develop business opportunities may erode an auditor's objectivity and independence when making audit judgments. The profession contends that aspects of the auditing environment such as peer review, consultation review, and auditor professionalism serve to mitigate this risk. This study examines the impact of financial dependence, consultation review requirement, and moral development on a judgment based audit decision. Fifty-four experienced auditors were asked to assess the appropriateness of an audit client's proposed change in accounting estimate for warranties. Two levels of financial dependence (Large client with potential for additional consulting revenues/Small client) and two levels of consultation review requirement (Required/Not required) were manipulated in the case materials. Moral development was measured using the Defining Issues Test (DIT) p-score. Results of the tests indicate that the presence of a consultation review requirement reduced the auditors' assessments of the appropriateness of the accounting treatment; in addition, higher scores on the DIT were associated with lower assessments of the appropriateness of the accounting treatment. Financial dependence did not influence the assessment of the appropriateness of the accounting treatment. Implications for practice are discussed.

Voluntary Attestation in the Asset Management Industry: Its Influence on Users' Perceptions and Investment Decisions

This study provides evidence on the influence of voluntary attestation outside of the financial statement audit setting. Information preparers can voluntarily employ an independent third party to attest to the reliability of information other than financial statement information. An issue of interest is whether voluntary attestation of information reliability influences users' perceptions and use of this information. The AICPA's Special Committee on Assurance Services has recently drawn attention to the potential role for CPAs in establishing the reliability of information other than financial statement information. Accounting firms are in a unique position to provide voluntary attestation services. However, unlike the market for financial statement auditing, many attestation services can also be performed by professionals other than CPAs. Thus, a secondary issue of import is whether the type of attester influences users' perceptions and use of attested information. The development of the Performance Presentation Standards (PPS) by the Association for Investment Management and Research provides a setting for examining these issues. PPS are voluntary reporting rules for investment managers to use in reporting historical performance results. Pension fund sponsors place money with investment managers, who select and monitor investments for the pension fund. Fund sponsors select investment managers based, in part, on the investment managers' asserted performance results. This institutional setting comprises information asymmetry between the investment manager and the fund sponsor, with an incentive by the investment manager to present performance results in a favorable light. PPS were developed to mitigate this information asymmetry. Adherence to PPS is voluntary, and attestation of PPS compliance is not required. Potential attesters of PPS compliance include accounting firms and financial services firms. We conduct an experiment in which pension fund sponsors are provided with case materials and asked whether they would recommend placing pension funds with any of a set of investment managers. We hypothesize that attestation enhances the perceived credibility of investment managers' asserted performance results, and influences fund sponsors' investment decisions. We further hypothesize that the type of attestation firm (Big 6 CPA firm; small, local CPA firm; international financial services firm; small, local financial services firm) influences fund sponsors' perceptions of information credibility and their subsequent investment decisions. Our results suggest the following. Pension fund sponsors prefer that investment managers present performance results that have been asserted to have been prepared in accordance with AIMR PPS. Further, attestation of this assertion influences fund sponsors' perceptions of information credibility. Specifically, fund sponsors perceive that attested information is more credible than information that has not been attested. We also find that when performance results have been attested by a CPA firm, fund sponsors perceive that information credibility is higher when the attestation is performed by a Big Six firm, rather than by a non-Big Six firm. Surprisingly, our experimental evidence suggests that perceived credibility of performance results is not an important determinant of a fund sponsor's investment decision.