Internal Control Audit Research Articles

Depth In Providing Banking Credit In Support Improving Village Creative Industries In Langkat District

The national development carried out so far is a development effort sustainability in order to create a just and prosperous society based on Pancasila and the 1945 Constitution. In order to achieve this goal, implementation development must always pay attention to harmony, harmony and balance various elements of development, including in the banking sector. This research aims to deepen the provision of banking credit to support industrial improvement creative village in Langkat Regency. The population used in this research is employees at PT. BRI (Persero) in Langkat Regency. Sampling technique with using saturated samples. The sample size was 30 people. Types of data in this research are primary and secondary data. Data collection techniques use questionnaires, interviews, and documentation studies with data analysis techniques using approaches quantitative with statistical tools of multiple linear regression analysis. The research results show: 1) Internal control has a partially insignificant effect on effectiveness granting credit, 2) Internal audit has a partially significant effect on effectiveness granting credit, 3) Internal control and internal audit have a significant effect simultaneously on the effectiveness of providing credit, namely 83.3%.

Application of Information Systems, Internal Control, Risk Assessment, and Internal Audit for Collection Effectiveness of Accounts Receivable

The aim the purpose of this study was to ascertain how internal control and accounting information systems, risk assessment and internal auditing influence the effectiveness of receivables collection. This study was conducted at PT. Puninar Infinite Raya uses the use of internal audit, risk assessment, internal control, and accounting information systems as independent variables and the effectiveness of the collection of accounts receivable as dependent variables. The sample in the study amounted to 42 people. The questionnaires received back from the respondents were 42 people. There is one analysis model of the data processing method used, namely the model for multiple regression analysis. According to the study's findings, the use of accounting information systems significantly and negatively affects the efficiency of collecting receipts; on the other hand, internal control significantly and favorably affects the efficiency of collecting receivables, and risk assessment affects the efficiency of collecting receivables. The efficiency of receivables collection is impacted concurrently by the use of accounting information systems, internal control, risks associated with their implementation, risk assessment, and internal audit. The study's managerial implications include the use of information systems. Such as operating efficiency and real-time monitoring. Internal control such as fraud prevention, legal compliance.

PENGARUH AUDIT INTERNAL TERHADAP PENGENDALIAN INTERNAL PENJUALAN PADA PERUSAHAAN AIR MINUM DI KOTA BANDUNG

Internal Audit is a series of processes and technical personnel within a company that confirms the accuracy of financial information and activity procedures according to regulations. The purpose of this study was to determine internal audit control and sales control and to determine the effect of internal audit on internal sales control in the regional public company PT X, Bandung City. Internal audit also provides very objective information regarding the accuracy of sales data which will become the basis for management decision making. Sampling using purposive sampling. Collecting data using literature study, questionnaires. For data analysis techniques using validity test, reliability test, data normality test, Spearman rank correlation analysis. Simple linear regression analysis, Determination Coefficient Test, t test. The results showed that internal audit had a significant effect on internal control of sales at the public company in the PT X area, Bandung City.

Internal Audit Practices and Quality of Financial Reports of Listed Consumer Goods Manufacturing Firms in Nigeria

The quality of financial reporting has remained an issue of significant concern among professional accountants, regulators, and other users of financial information. This is because financial reporting has been a principal means of communicating result of financial transactions and events which transpired within the organization. To that end, this study investigated the relationship between internal audit practices and financial reporting quality of consumer goods manufacturing in Nigeria. The research design used in this study was descriptive survey. The targeted population of this study consists of all the twenty-one (21) listed consumer goods manufacturing firms in the Nigerian Exchange Group (NGX) with a respondent total of two hundred and ninety (290). The sample size of the study consists of ten (10) consumer goods manufacturing firms that have branches in South-South, Nigeria using purposive sampling technique. The study employed primary data sourced from questionnaires administered to the respondents and two hundred and fifty-one (251) representing a response rate of 86.6% was used as sample size for the study. The study used content validity and Cronbach alpha reliability test was used to determine the statistical reliability of the instrument. Descriptive statistics such as frequencies, percentages, means, and standard deviations and spearman rank correlation were used in data analysis. Findings indicated that a positive and significant relationship between internal audit control mechanisms and timeliness of financial reports, a positive and significant relationship between internal audit risk management and timeliness of financial reports, and a positive and significant relationship between management support and timeliness of financial reports of consumer goods manufacturing firms in Nigeria. Based on the findings, this study concluded that, internal audit practices positively and significantly influence financial reporting quality of consumer goods manufacturing firms in Nigeria. The study recommended amongst others that consumer goods manufacturing firms in Nigeria should adopt the effective use of internal audit activities since it has positive and significant influence towards an improvement in financial reporting quality.

Internal and external subjects of financial control over the reliability of financial statements

The article substantiates the relevance of research into issues of increasing the reliability of financial reporting. In this regard, the formation of an effective system of financial control over accounting reporting is identified as a primary task. To solve this problem, it is necessary to increase the efficiency of control both in the process of generating reports and subsequent control over already compiled reports. Internal control is provided directly by the accounting service and independent internal controllers, including an internal controller, auditor, and auditor. External control is provided by tax services in the process of forming the state information resource of accounting financial statements and audit companies. The article examines the functions of the main elements of the financial control system for accounting reports and suggests directions for improving the efficiency of their activities. Particular attention is paid to internal control and external audit systems, the functioning of which should be aimed at increasing the reliability of financial reporting in the interests of external users.

Optimization of Internal Control for Budget Operations in Public Institutions Based on Random Forest Algorithm

In order to promote the construction of internal control in public institutions and improve work efficiency, the author proposes an optimization of internal control in public institution budget business based on random forest algorithm. We have constructed a big data audit framework for internal control of A Maritime Bureau based on the financial cloud platform and sorted out its audit process. By using the random forest algorithm to identify suspicious points in the internal control audit of administrative institutions at the data level, an example analysis is conducted using some data from A Maritime Bureau's assets, budget, revenue and expenditure, infrastructure, and contract business. The results indicate that the design of the internal control big data audit plan for administrative institutions will promote the innovation of audit information technology and application in A Maritime Bureau, provide theoretical guidance for the internal control big data audit carried out by administrative institutions, and effectively solve the problems of high workload and low work efficiency when A Maritime Bureau conducts internal control big data audits, thereby improving audit efficiency.

The impact Dodd Frank's Act on audit firm tenure

AbstractThis study examines the effect of Dodd Frank's Act of 2010 (Dodd's Act) on the duration of the auditor‐client relationship. One of the provisions of Dodd's Act was to permanently exempt nonaccelerated filers from mandatory internal control audits and to maintain the internal control requirement for accelerated filers. The results indicate that average audit firm tenure has increased significantly in the post‐Dodd period, and there is a post‐Dodd increase (decrease) in long and medium (short) tenure. Furthermore, the increase is more pronounced for nonaccelerated filers on average, and varies across big4 and non‐big4 auditors. The inferences are robust to the inclusion of various controls, and to the exclusion of the financial crisis period (2008–2010). Collectively, the findings suggest that Dodd's Act permanent exemption has resulted in lower margins for auditors, and thus motivated audit firms, particularly non‐big4 auditors, to extend their tenure with clients.

Mandatory internal control audit and corporate financialization

This paper empirically examines the impact of mandatory internal control auditing systems on the financialization of enterprises based on China's A-share listed companies from 2007 to 2021 using a difference-in-differences model for empirical analysis. The findings indicate that mandatory internal control auditing has an inhibitory effect on corporate financialization. The heterogeneity analysis reveals that the mandatory internal control auditing system has a more significant inhibitory effect on the degree of financialization of non-state-owned enterprises, enterprises in the eastern region, and enterprises in the region with weaker financial regulation.

أثر تطبيق المعايير الدولية الحديثة للمراجعة الداخلية على ضبط وترشيد الأداء المالي والإداري للقطاع الحكومي: بالتطبيق على وزارة المالية السودانية

The study aimed to demonstrate the impact of applying international standards for internal control and internal auditing in evaluating financial and administrative performance in the government sector. The problem of the study focused on the weakness of internal auditing in the government sector and the presence of obstacles that limit the ability of the General Administration of Internal Auditing to evaluate government financial performance. Three hypotheses were developed. Designing a questionnaire, and after collecting and analyzing data from the respondents, the study concluded that there is a statistically significant relationship between the application of standards of control and internal auditing and controlling administrative performance in the government sector at a significant level (0.000) and between the consistency of laws and regulations for internal auditing in increasing the effectiveness of internal auditing in evaluating and controlling And rationalizing the financial performance in government units at a significance level (0.000) and between training and qualifying auditors in accordance with international standards for control and internal auditing and evaluating administrative and financial performance in government units) at a significance level (0.000). The study recommended the need to regulate the affairs of the internal audit profession by establishing the professional association responsible for that. It also recommended There is a need to reduce the costs of applying professional performance standards so that they can be applied to confront the phenomenon of financial corruption.

PENGARUH AUDIT INTERNAL TERHADAP PENEKANAN RISIKO KECURANGAN PADA PT POS FINANSIAL INDONESIA

In a company, internal control or internal audit is essential to achieve the company's objectives by preventing actions that could harm the company itself. This research is conducted to understand the influence of internal audit on the suppression of fraud risk. The research is a quantitative study with primary data obtained through interviews, questionnaires, and literature studies. Internal audit (X) and Fraud Risk Suppression (Y) are the variables examined. The sampling technique used in this research is purposive sampling, with a total of 35 samples obtained. The data was collected through questionnaires distributed to all respondents, who are employees of PT Pos Finansial Indonesia. Subsequently, the data was processed using SPSS, involving Validity Test, Reliability Test, Normality Test, Spearman Rank Correlation Analysis, Simple Linear Regression Analysis, t-test and Coefficient of Determination Test. The Research results indicate that internal audit significantly influences the emphasis on fraud risk at PT Pos Financial Indonesia

Internal control quality and audit fees: does the CIO matter

Internal control quality and audit fees: does the CIO matter

The Effectiveness of Internal Control and Internal Audit and Their Influence on The Business Performance of Small and Medium Enterprises

The Effectiveness of Internal Control and Internal Audit and Their Influence on The Business Performance of Small and Medium Enterprises

A Study on Financial Innovation and Risk Management Methods from an Accounting Perspective

With the continuous development of global financial markets and rapid technological advances, a growing number of innovative products and services in the financial sector have emerged, providing new impetus to economic growth but at the same time bringing new risks. We study financial innovation and risk management methods from an accounting perspective, examining how accounting plays a key role in ensuring financial stability and transparency. First, this paper summarizes the definition and classification of financial innovation and analyzes its positive and negative effects on economic development. Second, our main focus is on the fundamental roles of accounting in risk management, which involve supplying financial data for decision-making, overseeing financial innovation and operational risks, and evaluating the efficiency of risk management actions. In addition, this paper discusses the risk management methods from the accounting perspective, such as improving the accuracy and transparency of financial reports, selecting and adjusting prudent accounting policies, strengthening internal control and external audit mechanisms, and improving the accuracy of asset and liability assessment. Enhancing accounting standards and regulatory frameworks to better align with the evolving trends in financial markets is recommended. Furthermore, we will strengthen the professional training of accounting personnel, improve the risk management capabilities of financial institutions, and promote the integration of accounting innovation and financial innovation.

Internal control quality and audit fees: does the CIO matter

Internal control quality and audit fees: does the CIO matter

내부통제와 미래이익에 대한 주가 정보성

Purpose - This study examines whether internal control has an effect on stock price informativeness about future earnings. High quality internal control provides continuous assurance for the quality of financial reports, and these future earnings-related information is accurately reflected in the current stock price.
 Design/methodology/approach - This study collected 12,862 data from 2006 to 2021 in China to make an empirical analysis using the future earnings response coefficient (FERC) and the multiple regression analysis were hired in order to analyze the data.
 Findings - We find that internal control strengthens the association between current returns and future earnings, indicating that more information about future earnings is reflected in current stock prices. This positive effect exists in both the main board market and the growth enterprise market of China's stock market, especially in the main board market after the implementation of the internal control policy. In addition, we find that the positive effect is weaker for firms that report internal control deficiencies or receives non unqualified internal control audit opinions. The results using earnings persistence yield similar findings, further supporting the results based on the FERC model.
 Research Implications or Originality - Our tests provide strong evidence that the quality of internal control affects FERC in China stock market.

Disclosure of Internal Control Weaknesses and Auditors’ Litigation Risk

SUMMARY We investigate whether the concern of shareholder litigation motivates auditors to disclose internal control weaknesses. We document that issuing adverse internal control opinions reduces the likelihood of auditors being named with their clients as defendants in shareholder lawsuits. This finding suggests that auditors can reduce their legal liability arising from failed financial statement audits by increasing the quality of internal control audits. Consistent with this expectation, we find that auditors are more likely to issue such opinions in a timely manner for clients with higher ex ante litigation risk. Overall, our evidence suggests that the threat of litigation provides an incentive rather than a disincentive for auditors to issue adverse internal control opinions for clients with higher litigation risk. Data Availability: The data are available from public sources indicated in the paper. JEL Classifications: M42; K41.

GLOBAL EXPERIENCE OF PUBLIC FINANCIAL CONTROL IN THE PUBLIC FINANCIAL MANAGEMENT SYSTEM

The relevance of this study lies in the fact that with the transition of the economy to a market model, state control over the legality and rationality of the use of public finance becomes increasingly important. State financial control is an important instrument of the financial mechanism and one of the main means of implementing state financial policy. Its role is to support the successful implementation of financial strategy and tactics, as well as the expedient and efficient formation, allocation and use of financial resources of the state. In the conditions of formation of a market economy, control over the budgetary process is becoming increasingly important due to the need to improve the efficiency ofpublic administration of the whole system offinancial relations. State financial control includes control over compliance with financial legislation, the process offormation and use of state, budgetary and extra-budgetary resources, as well as assessment of the economic efficiency offinancial operations and the targeted nature of public expenditure. This work covers important theoretical and methodological aspects of state financial control and aims to identify the main directions of its development abroad. The paper analyses foreign experience in three areas: general public finance control, parliamentary and government control as well as internal control and internal audit as special areas of financial control.

Organisation of Internal Controls and Financial Audits in the Public Sector Organisations

The purpose of the study is to analyze the problems associated with the way internal control and financial auditing are organised in budgetary and public sector organisations. The authors show that internal control, as a process of interrelated actions, ensures risk reduction in the course of achieving the desired results of the institution’s activities. The level of internal control is assessed during the activities carried out through the Federal Treasury and State (municipal) financial control and internal financial audit. The article describes the procedure for the development of the Regulations on internal Control; reflects the main distinguishing features of internal control and internal financial audit; a classification of violations (risks) of budget (accounting) accounting and reporting has been formed, as well as the procedure for drawing up an audit opinion. The study shows that in order to quickly find problem areas and make management decisions based on the identified factors, it is necessary to strengthen electronic SMART control (controlling), accounting for public finances, and, accordingly, conduct comprehensive scientific research in promising areas. Methods of systematisation, comparison, grouping of the information were used in the preparation and writing of the article. The practical significance lies in the application of conclusions and proposals made on the results of the study to improve internal control and audit, which will allow interested users to obtain more reliable and understandable information to make management decisions based on it. The article is intended for a wide range of readers, undergraduate and graduate students dealing with the problems of internal control.

Audit of Bank Lending Transactions Accounting when Applying International Standards

One of the most important areas of verification during auditing a bank is the audit of the funds placed in loans. The purpose of the audit is to confirm the accuracy of the information in the reports. The article deals with the problems of auditing the accounting of cash loan transactions. Taking into account that one of the objectives of the audit is to confirm the reliability of data in the accounts, the change in requirements for the formation of information on loans issued in the conditions of applying international accounting standards (IFRS) has predetermined the very need to expand and change accounting policies in this matter. It should set out how and when to determine and how often the fair value at which a loan should be measured should be reassessed. The transformation in the requirements for the formation of information in the accounting of loans issued by the bank, associated with the application of international accounting standards for financial instruments, predetermined the need to expand and change the accounting policy in terms of loans issued. In particular, the loan should be measured at fair value, therefore, the accounting policy should establish the procedure and methods for determining the fair value and the frequency of its revaluation. The procedure for recognizing and accounting for income and expenses related to credit transactions has changed. The article discusses methodological recommendations for the formation of an accounting audit program and accounting policy in relation to the bank’s credit operations in the light of the requirements of international standards. The purpose of this work was to form a methodology for auditing the accounting of credit transactions. As part of the study, the author proposed appropriate methodological recommendations that can be used in the development of accounting policy provisions, methods of internal control and audit of credit operations in conditions of modification of domestic accounting and application of international accounting standards, as well as in the training of specialists in accounting, internal control and audit. In the course of research, methods such as systematic analysis and logical generalization of legislative and regulatory documents, as well as special literature dealing with the audit of credit transactions were used. The proposed methodological recommendations for audit of credit operations can be used by auditors as well as by internal control and accounting service of the bank for analysis of accounting policy and its adjustment. The results of the research can be recommended for the development of accounting policy provisions, internal control methods and audit of credit transactions, in the conditions of modification of domestic accounting and the application of international reporting standards, as well as used for training specialists in accounting, internal control and audit.

The two sides of corporate social responsibility and the quality of internal control audit opinions

Although corporate social responsibility (CSR) activities provide a strong signal of management integrity, the involvement of the client in irresponsible CSR should alert the auditor to the risk of material misstatement. Framing management integrity assessments by relying on responsible CSR activities can lead to auditors' unintended alignment with their clients' preferred outcomes. Motivated by the increasing frequency of clean internal control opinions (ICOPs) regarding clients that subsequently misstate, we explore whether auditors' overreliance on responsible CSR influences the quality of ICOPs. We find that clients' CSR involvement is associated with fewer adverse ICOPs, but this CSR effect is asymmetric because it is only explained by responsible CSR activities and not by irresponsible CSR activities. Importantly, the ‘good side of CSR’ is associated with fewer adverse opinions being issued to misstated clients. Additional analyses show that only irresponsible CSR activities increase the risk of financial misstatements. Our findings provide support for the Public Company Accounting Oversight Board's warning that certain conditions inherent in the audit environment, such as the assessment of management integrity, can lead to auditors unconsciously favouring confirming evidence (represented by responsible CSR activities) instead of relying on disconfirming evidence (represented by irresponsible CSR activities) that could raise issues about management's integrity and ethical commitment.