Audit Of Practice Research Articles

Leveraging information communication technology (ICT) and artificial intelligence (AI) to enhance auditing practices

PurposeIn the fourth industrial revolution, where business accounting integrates with automation through artificial intelligence (AI) and information communication technology (ICT), auditors must be able to access and analyze vast data and information to identify potential risks and issues. Using data analytics and AI to study significant amounts of data linked to audits, this study aims to investigate auditing practices by leveraging ICT and AI to enhance the audit process.Design/methodology/approachBibliometric and quantitative research techniques have been used in the study’s mixed-method process. The theoretical underpinnings of AI have been investigated using the bibliometric research method, and the challenge of implementing ICT-enabled auditing practices among auditing professionals has been studied using the quantitative research method. Surveys, interviews and bibliometric analysis have all been used as data-gathering techniques.FindingsResearch in AI and auditing has a broad worldwide scope, involving developed and developing nations. ICT perceived benefits have no direct effect on auditing practices. However, ICT training has a mediating effect on the relationship between ICT perceived benefits and auditing practices. ICT adoption has no moderating effect on the relationship between ICT training and auditing practices.Research limitations/implicationsFindings have significance for lead auditors, policymakers and the Institute of Chartered Accountants of India (ICAI), who are keenly interested in upgrading the auditing practice of accounting professionals in India by incorporating AI and ICT determinants.Practical implicationsThis research makes a significant contribution by offering a thorough framework for improving the knowledge management of practising auditors regarding ICT adoption, training and perceived benefits, a crucial component of auditing practices in the digital age. In addition, it provides insightful information about how AI affects accounting practices, which may point the way for further study in this area.Originality/valueThis research has significant implications for auditing firms in India. It can inform ICAI, policymakers and regulators in their attempts to foster the incorporation of AI and ICTs in auditing practice.

Perceived effects of key audit matters reporting on audit efforts, audit fees, audit quality, and audit report transparency: stakeholders’ perspectives

PurposeThis paper aims to examine the perspectives of auditors, regulators and financial report preparers on the effects of key audit matters (KAMs) reporting on audit effort, fees, quality and report transparency.Design/methodology/approachThe authors conducted 21 semi-structured interviews with stakeholders (13 Audit Partners, 5 Chief Financial Officers and 3 regulators) and thematically analysed the interviews. They use the frame of “Paradox of Transparency” to explain the findings.FindingsAuditors perceive that the overall quality control of their audits has improved both in the planning and execution stages, and such improvement can mostly be attributed to the coercive pressures from professional bodies and regulators. Nevertheless, audit fee remains unchanged. Auditors disclose industry generic items and descriptions of KAMs, sometimes masking the real problem areas of the clients. Even after improving the performative audit quality, transparency of audit reporting has not improved. Issues that warrant going concern qualifications or audit report modifications are now reported as KAMs. Hence, KAMs reporting might make the audit report less transparent.Practical implicationsLocalised audit environments and institutions affect the transparency of KAMs reporting. Without attention to corporate governance and auditors’ independence issues, paradoxically, performative improvement in audit quality (due to the KAMs reporting requirement) does not enhance the transparency of audit reports.Originality/valueTo the best of the authors’ knowledge, this study is the first to provide field-level evidence in Bangladesh and other developing countries about the perceptions of auditors, financial report preparers and regulators on the effects of KAMs reporting on audit efforts, fees, quality and report transparency.

Internal auditing's role in preventing and detecting fraud: An empirical analysis

Internal auditing plays a pivotal role in preventing and detecting fraudulent activities. However, the orientation and role of internal auditing in dealing with fraud risk can vary significantly across different companies. This study examines the relationship between the internal audit function (IAF) and fraud, providing new insights into the current practices of internal auditing. Using a survey dataset comprising responses from 275 Chief Audit Executives across Germany, Switzerland and Austria, we investigate factors that correlate with an increased propensity for IAFs to engage in fraud prevention and detection. Our findings suggest that a robust corporate governance environment significantly influences the extent to which the IAF is involved in preventing and detecting fraud. Shedding light on the positioning of internal auditing between management and the audit committee with respect to fraud, our results show that increased IAF involvement with management positively affects the level of activities to prevent and detect fraud, while increased IAF involvement with the audit committee has the opposite effect. Furthermore, we find that the propensity of IAFs to engage in fraud prevention and detection increases when the IAF applies technology‐based auditing techniques for risk identification. Our results have implications for building appropriate protection against the steadily increasing risk of fraud within organizations, while holistically addressing the ambiguity regarding the responsibility for preventing and detecting fraud.

Promoting surgical smoke management in a pediatric operating room: a best practice implementation project.

The routine use of heat-producing tools in the perioperative setting generates surgical smoke. Surgical smoke poses a known health hazard for perioperative staff working in the operating room. The objective of this best practice project was to promote evidence-based practices regarding surgical plume management in a pediatric operating room. This project was guided by the JBI Model of Evidence-Based Healthcare and used the JBI Practical Application of Clinical Evidence System and the Getting Research into Practice audit and feedback strategy to promote evidence-based practices regarding surgical smoke management in a pediatric operating room. Seven audit criteria representing best-practice recommendations were used. A baseline audit was conducted, followed by the implementation of multiple strategies developed by the key stakeholders. The project was finalized with a follow-up audit to determine any changes in compliance with best-practice recommendations. Baseline audit data indicated an average of 41% compliance with best practices across all audit criteria, revealing the need for significant improvement in five of the seven criteria. Three barriers were identified and strategies were implemented, including the development and implementation of an educational module and a surgical smoke exposure risk assessment tool. Follow-up audits showed an overall improvement of 30% among five of the seven audit criteria. This project yielded improvements with best practices for surgical smoke management in the perioperative setting. However, additional work is required to ensure the sustainability of best practices in this setting.

Post-operative pain management by nurses in an intensive care unit: a best practice implementation project.

Post-operative pain is the most prevalent type of acute pain. Nurses are the health care professionals who most frequently assess pain, as well as evaluating the patient's response to pain management treatment and monitoring for the occurrence of adverse events. Thus, to improve outcomes and quality of care, the interventions used by nurses should be based on best practices. The aim of this project was to implement best practices in post-operative pain management in an intensive care unit. This evidence implementation project was conducted in a hospital for the surgical treatment of orthopedic diseases and trauma. The project followed the JBI evidence implementation framework. The project used JBI PACES software as well as JBI's Getting Research into Practice (GRiP) audit and feedback tools to develop eight audit criteria for the baseline and follow-up audits. The baseline audit showed that criteria 3 and 6 had low compliance, with few patients having documented plans and goals, and receiving multimodal analgesia in the ICU, respectively. Criteria 7 and 8, which assessed the use of opioids and follow-up by a pain specialist, revealed compliance of 60% and 50%, respectively. Criterion 3 improved from 0% to 20%. Criteria 6, 7, and 8 also improved, rising to 30%, 22.8%, and 50%, respectively. The project improved compliance with best practices in post-operative pain management. Further studies are needed to ensure the project's long-term sustainability.

Audit and Sustainability: Integrating Environmental Aspects in Auditing

This study explores the integration of environmental aspects into auditing practices, aiming to enhance organizational sustainability and corporate governance. Through a systematic review of literature, the historical evolution of environmental auditing is traced from its roots in the late 20th-century sustainability movement to its prominence in the early 2000s within the accounting profession. Theoretical frameworks such as institutional theory and legitimacy theory are employed to understand the drivers behind organizations' adoption of environmental auditing practices. Challenges hindering the effective integration of environmental aspects into auditing practices, including the lack of standardized methodologies and regulatory complexity, are identified. Despite these challenges, environmental auditing presents opportunities for organizations to improve their environmental performance, mitigate risks, and identify opportunities for improvement and innovation. Future research directions include exploring innovative methodologies for assessing environmental performance, addressing regulatory challenges, investigating auditors' roles in promoting sustainability, and conducting longitudinal studies to assess the long-term impact of environmental auditing on organizational performance. The study underscores the importance of advancing sustainable auditing practices to achieve organizational sustainability goals.

In What Way Does Artificial Intelligence Influences Audit Practice? Empirical Evidence from Southwest, Nigeria

AI has gained significant traction as an innovative tool for automating tasks, enhancing data analytics, and reducing the risk of errors in auditing processes. This study investigated the impact of adopting artificial intelligence (AI) on the quality of audit practice in Nigeria, focusing on data mining, machine learning, and image recognition as proxies for the independent variable. Population was 251 accounting firms in southwest Nigeria, with a sample size of 159, purposively determined. The study utilized structured questionnaires for data collection, with regression analysis, and correlation matrices adopted for the analysis. The findings revealed a significant positive relationship between data mining and image recognition with the quality of audit practice in Nigeria. Machine learning, however, showed an insignificant negative relationship. This suggests that AI, particularly data mining and image recognition, can enhance audit quality in Nigeria. As a result, the study recommended that Nigerian audit professionals and firms should consider incorporating data mining techniques into their audit processes to improve effectiveness and error detection.

Exposure frequency and radiation dose from CT examinations in Huaian.

This study quantified the exposure frequency and established the local diagnostic reference levels (DRLs) for the most common computed tomography (CT) examinations. A combined method census and sampling survey was used to quantify both frequency and radiation dose of CT examinations. Data were acquired through Picture Archiving and Communication System (PACS) or Radiology Information System (RIS). The annual frequency of CT examinations was 239.8 per 1000 inhabitants. The P75 of volume CT dose index (CTDIvol) to adult patients from CT scanning for head, chest, abdomen and lumbar spine examinations were 63.0, 12.4, 20.0 and 24.0mGy, respectively. The P75 of dose-length product were 858.6, 416.0, 620.7 and 559.2mGy·cm, respectively. This dose audit of CT practice can act as a starting point for establishing Huaian local DRLs and could be a reference for dose optimisation in China. This study compared DRLs in different countries and analysed some reasons for the rapid growth of CT examination frequency in Huaian.

Role External Auditing and Corporate Governance Practices in Combating Corruption in The Financial Sector

Role External Auditing and Corporate Governance Practices in Combating Corruption in The Financial Sector

Implementing shared service centres in Big 4 audit firms: an exploratory study guided by institutional theory

PurposeThis study aims to investigate why and how shared service centres (SSCs) are implemented as well as how they affect audit firm practice and audit quality.Design/methodology/approachIn this qualitative study guided by the theoretical framework of institutional theory, the authors conducted 25 semi-structured interviews in seven European countries, including 16 interviews with audit partners from Big 4 firms, 6 with audit team members, 2 with interviewees from second-tier audit firms and 1 with a member of an oversight body.FindingsThe authors show that the central rationale for audit firms to implement SSCs is economic rather than external legitimacy. The authors find that SSC implementation has substantial effects on audit practices, particularly those related to standardisation, coordination and monitoring activities. The authors also highlight the potential impacts on audit quality.Originality/valueBy exploring the motivation for and effects of SSC implementation amongst audit firms, the authors offer insights into the best practices related to subsequent change processes and audit quality.

AI COMPETENCIES FOR INTERNAL AUDITORS IN THE PUBLIC SECTOR

This article examines the critical integration of Artificial Intelligence (AI) competencies within the realm of internal auditing, particularly in the public sector. It addresses the existing gap in understanding the specific AI-related competencies as presented by The Institute of Internal Auditors (IIA) and explores their practical application for internal auditors. The study begins by tracing the origins and evolution of AI, highlighting its increasing significance across various sectors, including internal auditing. It delves into the transformative impact of AI on audit practices, emphasizing the need for internal auditors to adapt and develop new competencies in response to this technological evolution. The paper underscores the importance of AI in enhancing the quality and efficiency of auditing by automating tasks like fraud detection and anomaly identification. It articulates the imperative for internal auditors to possess a comprehensive understanding of AI, its risks, and opportunities, and to apply these insights in their audit processes. The study further explores the role of continuing professional education in equipping auditors with the necessary AI competencies, reflecting on the IIA’s emphasis on education and competency development in light of AI integration. By elucidating the link between AI theoretical knowledge and its practical application in internal audits, the article aims to empower internal auditors with the tools and insights necessary to navigate the evolving landscape of audit practice in the era of AI. It concludes by emphasizing the synergy between AI sophistication and human competence as indispensable for achieving optimal audit results and maintaining the integrity and effectiveness of the audit process in the digital age.

Teknologi Digital Dan Transformasi Internal Audit Terhadap Perlakuan Laporan Keuangan : Studi Literatur

This article discusses the impact of digital technology on the transformation of internal audit and its implications for the treatment of financial reports. As technology advances, companies are adopting digital solutions to improve the efficiency and effectiveness of their internal audit processes. This transformation not only includes the use of new tools and technologies, but also changes the paradigm and methodology of internal audit work. Digital technology provides greater capabilities in collecting, analyzing and understanding data in real-time. Internal audit can leverage advanced analytics technology, artificial intelligence, and natural language processing to identify risks, detect anomalies, and provide deeper insights into a company's finances. With the adoption of digital technology, internal audit transformation can increase audit accuracy and thoroughness, reduce the risk of human error, and enable fraud identification more effectively. In addition, technology also facilitates the implementation of more proactive and adaptive risk-based audit practices, allowing internal audit to focus on the most critical areas and provide significant added value. However, this transformation also brings new challenges, including the need to develop new skills among auditors, manage information security risks, and ensure compliance with regulations related to data privacy and security. This article details effective implementation strategies, as well as providing views on how organizations can optimize the potential of digital technology to improve the quality of financial reporting treatment. Thus, this article aims to provide in-depth insight into the role of digital technology in the transformation of internal audit and its impact on the treatment of financial statements, identify the associated benefits and challenges, and provide guidance for companies wishing to adopt such technology effectively.

Influential factors shaping the adoption and utilization of audit technology (CAATS) in the audit practices in Saudi Arabia: Human capital expertise as a moderating factor

This study examines the moderating effect of trained human capital on the associations of accounting information systems, generalized auditing software, and technology adoption with the performance of external auditors among Saudi listed companies. This study used a survey-based methodology. The final sample consisted of 136 responses with an 8% response rate. Using Smart-PL4 analysis, the results showed that there is a positive correlation between accounting information systems and external auditors. Conversely, a negative relationship between generalized auditing software and external auditors has been documented. In addition, this study reported a negative association between technology adoption and external auditors. However, the results highlight the positive relationship between trained human capital and external auditors. Overall, this study provides valuable insights for accounting and auditing policymakers on how external auditors’ performance is influenced by several factors in the Saudi audit market.

Shariah governance and audit practices in Islamic co-operatives: An audit expectation-performance gap analysis

This study focuses on the inclusion of Shariah governance and audit best practices in Islamic co-operatives in Malaysia. The development of Shariah governance and audit is essential to complement the Shariah compliance mechanisms already in place and practiced internally within these Islamic co-operatives. Strong regulations, frameworks, and guidelines are needed to uphold Shariah compliance practices. The Delphi method was used as the study’s methodology, involving a series of discussions with industry practitioners in Islamic co-operatives. Based on the findings, there is an existing expectation-performance gap in regulations, frameworks, and guidelines; independence and competency; and Shariah audit scope in governing Shariah compliance principles in Islamic co-operatives. This is crucial because well-developed regulations, frameworks, and guidelines in Shariah governance and audit will increase stakeholders’ trust that the activities and operations of Islamic co-operatives are Shariah-compliant. Additionally, providing a standardized framework will help manage risks in Islamic co-operatives and, in the broader context, contribute to the industry’s and the economy’s growth by offering stakeholders adequate information to make informed decisions.

МЕТОДИЧНІ ПІДХОДИ ДО ПРОВЕДЕННЯ ВНУТРІШНЬОГО АУДИТУ В МІЖНАРОДНИХ ПРЕДСТАВНИЦТВАХ СУДНОПЛАВНИХ КОМПАНІЙ

In the conditions of instability in the domestic economy, internal audits create a reliable basis for crisis management and management decision-making for developing and effectively functioning international representative offices of shipping companies through a systematic and orderly assessment aimed at improving and increasing the effectiveness of management, risk management and control processes in the organization. In today's changing and ambiguous market conditions, conducting an internal audit is becoming more and more difficult due to the numerous risks that affect the goals and require rapid changes in priorities, and even directions of activity. Stakeholders demand greater risk prediction and recommendations aimed at improving the organization's effectiveness; therefore, an internal audit must be flexible, use innovation and modern technology to be effective, and provide value to its stakeholders. The purpose of the study is to analyze the methodological approaches used in the best international practices of internal audit to determine the approach to the effective conduct of internal audit in international representative offices of shipping companies. The research used such methods as analysis, synthesis, and analogy. The analysis was applied to the research of methodical approaches and experience in audit practice. Synthesis and analogy were used to determine the approach to their adaptation and application in the audit practice of the international representative office of the shipping company. Based on the results of the study, the author defines an approach to planning and providing internal audit services in international representative offices of shipping companies and provides a model of organization of the internal audit service aimed at achieving its effectiveness to ensure the quality of internal audit services for its stakeholders and optimal use of resources by the service The practical value of the results lies in their relevance for foreign shipowners and domestic managers of crewing enterprises of shipping companies to solve problems related to ensuring the effective functioning and development of the crewing business in Ukraine.

ПЕРЕДУМОВИ ПРОВЕДЕННЯ АНАЛІТИЧНИХ ПРОЦЕДУР АУДИТУ ФІНАНСОВИХ РЕЗУЛЬТАТІВ ПІДПРИЄ

The audit of financial results in companies with corporate governance has become a critical aspect of modern business practices. This study explores the prerequisites for conducting analytical procedures of audit of financial results in the context of corporate governance, emphasizing its role as a comprehensive tool ensuring efficiency, transparency, and sustainable development of the corporate sector. The relevance of this topic is underscored by the growing complexity of business environments, increasing regulatory demands, and the need for greater transparency in corporate operations. As companies face heightened scrutiny, the role of audit has expanded beyond traditional boundaries, becoming integral to strategic decision-making and risk management processes. This paper examines the regulatory framework for audit in Ukraine, which integrates both national and international standards. A key contribution of this research is the proposal of a hierarchical model of audit objectives. This model illustrates the multi-level nature of auditing activities, encompassing a spectrum of tasks from ensuring the reliability of financial statements to achieving strategic corporate governance goals. The study delves into the role of analytical procedures in audit, positioning them as powerful means of generating valuable information for strategic decision-making and business process improvement. This perspective highlights the evolving nature of audit, moving from a compliance-focused activity to a value-adding business function. In the context of investment attractiveness, the paper argues that quality audit is a key factor in building investor and stakeholder confidence. It plays a crucial role in protecting shareholder rights, especially those of minority shareholders, by ensuring transparency and accountability in management decisions. The paper concludes by positioning audit of financial results as an integral component of modern corporate governance systems. It argues that effective audit practices contribute significantly to enhancing the efficiency, transparency, and competitiveness of Ukrainian companies in the global market. This study contributes to the ongoing dialogue on the evolution of audit practices in the face of changing business landscapes and increasing stakeholder expectations, providing valuable insights for practitioners, regulators, and academics in the fields of auditing and corporate governance.

Concordance of breast cancer services in an urban tertiary care institute in India to EUSOMA guidelines: An audit of Indian breast cancer practices.

The provision of breast cancer care tends to vary substantially from one breast unit to another. To provide state-of-the-art patient-centered care to women diagnosed with breast cancer, adoption and adherence to structured treatment algorithms, protocols, and international guidelines are essential. In this review, we endeavor to audit breast cancer care at our tertiary cancer center against published EUSOMA guidelines. This was a retrospective study with an observational design. All patients who completed recommended treatment for breast diseases at our institute from January 1, 2018 to December 31, 2018 were included and evaluated. Data were retrieved from patient e-prescriptions and medical records. Analysis was performed using Microsoft Office 2010 to measure how our practices compared to EUSOMA quality indicators (QIs). Clinical assessments, imaging, and preoperative work-up of breast cancer patients met EUSOMA standards. Prognostic and predictive characterization of tumors was performed in all cases. Surgical management of invasive cancer and ductal carcinoma in situ (DCIS) was in accordance with the guidelines. Adherence to postoperative radiation and adjuvant endocrine therapy was adequate. More mastectomies were performed in patients with invasive cancers measuring <3 cm. Overtreatment was avoided in every other subgroup. Adjuvant and neoadjuvant chemotherapy and targeted adjuvant therapy were adequately utilized unlike neoadjuvant targeted therapy. Minimal attrition was noted in patient follow-up. This extensive audit has set a benchmark for future annual audits and helped highlight areas where improvement of service delivery is needed.

Combating antimicrobial resistance: audits of practices to target actions

Antibiotic resistance is a public health emergency requiring a concerted approach and motivating the implementation of antibiotic stewardship programmes. As part of an institutional project at the Centre hospitalier universitaire vaudois, we collected data on the appropriateness of antimicrobial prescriptions in various medical and surgical departments in order to identify areas for improvement. The results show that there is room for improvement and that there are differences between departments, particularly regarding surgical prophylaxis administered beyond the operating time, adaptation of the spectrum and duration. Prescribing appropriateness data is an essential complement to consumption data for adapting effective intervention strategies.

The impact of key audit matter characteristics on financial statement understandability and investor decision-making: An empirical stud

This study investigates how key audit matter (KAM) characteristics influence financial statement understandability and subsequent investor decision making. Using Structural Equation Modeling-Variance Based (SEM-VB) through Partial Least Squares (PLS), the analysis was conducted on a diverse global sample of investors from Europe, North America, Asia-Pacific, Africa, and Latin America. The results indicate that KAM accuracy, reliability, audit quality, and financial reporting quality significantly enhance perceived financial statement understandability, which in turn positively impacts investor judgments. The mediating role of understandability is confirmed, emphasizing its crucial influence on investors’ decisions. Additionally, an importance-performance map analysis (IPMA) identified KAM reliability and accuracy as the most critical factors. This study contributes to the theoretical and managerial understanding of audit practices and investor behavior.

Антикорупційний аудит: поняття, види та елементи

The prosperity of corruption, especially during the war, is one of the threats to Ukraine's national security, political stability and economy. International audit practice shows that anti-corruption audit is an effective tool for combating corruption and financial fraud. The article aims to distinguish the concepts of anti-corruption audit and anti-corruption compliance, to disclose the types of anti-corruption audit and its elements, and to determine the place and role of anti-corruption compliance in detecting and preventing manifestations of illegal corruption actions. Based on the analysis of the essence, two types of anti-corruption audit are distinguished: internal and external, which makes it possible to determine their differences and areas of application. In scientific literature, anti-corruption audit is often equated with anti-corruption compliance, which, in our opinion, is a component of internal anti-corruption audit. This conclusion follows from the general interpretation provided by the International Compliance Association and from the ideology of compliance, which involves compliance with the internal policies and procedures of the business entity. The elements of an anti-corruption audit are defined based on the provisions of international normative acts, the specifics and requirements of the activities of international organizations; however, for Ukrainian practice, it is appropriate to distinguish its main and additional elements based on the specifics of the activities of business entities and public sector entities. The main elements are mandatory for private and public sector entities, and additional ones depend on the field of activity and the level of corruption risks in the surrounding environment. The interpretation of the term anti-corruption audit proposed in the article, the definition of its differences from anti-corruption compliance and the identification of its structural components will contribute to constructing an effective system of combating fraudulent and corruption schemes in the private and public sectors of the Ukrainian economy.