Audit Procedures Research Articles

An Analysis Examining the Way Supply Chain Management-Focused Third-Party Environmental Audits Contributed to Business Sustainability Efforts

A crucial instrument for improving openness and responsibility, third-party environmental audits have become more popular as the focus on corporate sustainability has grown. The role of these audits in propelling sustainability efforts within corporations is the subject of this study. To make sure a business is in line with regulations and finds ways to improve, it can get an impartial opinion by having a third party conduct an environmental audit. The impact of these audits on business practices and sustainability is investigated in this paper through an analysis of case studies and empirical data. Based on the results, it seems that third-party audits help improve environmental performance by encouraging responsibility and constant development. Better resource efficiency, less waste, and reduced emissions are common outcomes of audited companies' adoption of more stringent environmental management systems. In addition, third-party audits boost stakeholder trust—an essential quality for a company's public image and the faith of its investors—due to the audits' impartiality and reliability. The thoroughness of the audit, the auditors' knowledge and experience, and the firm's resolve to follow audit recommendations are the three most important variables that determine how useful these audits will be. Concerns raised by the research include the possibility of superficial compliance and the necessity for uniform audit frameworks to permit comparison and uniformity throughout businesses. Because they offer an impartial assessment of environmental performance and advocate for best practices, third-party environmental audits are crucial in propelling corporate sustainability efforts. It is critical to resolve the highlighted issues and continually improve audit procedures to enhance their efficacy. Policymakers, corporations, and stakeholders can use this research to better understand the value of third-party audits in reaching sustainable development goals and how to improve corporate sustainability initiatives.

Intelligent manufacturing, auditor selection and audit quality

PurposeThe purpose of this paper is to examine the influence of intelligent manufacturing on audit quality and its underlying mechanism as well as the variation in this influence across different types of organizations.Design/methodology/approachThis research utilizes a difference-in-differences (DID) method to examine how enterprises that apply intelligent manufacturing choose auditors and impact their audit work. The study is based on 15,228 observations of Chinese-listed A-shares from 2011 to 2020.Findings(1) There is a strong correlation between intelligent manufacturing and audit quality. (2) This positive correlation is statistically significant only in state-owned enterprises (SOEs), those that have steady institutional investors and where the roles of the CEO and chairman are distinct. (3) Enterprises that have implemented intelligent manufacturing are more inclined to employ auditors who possess extensive industry expertise. The auditor's industry expertise plays a crucial role in ensuring audit quality. (4) The adoption of intelligent manufacturing also leads to higher audit fees and longer audit delay periods.Practical implicationsThis paper validates the beneficial impact of intelligent manufacturing on improving corporate governance. In addition, it is recommended that managers prioritize the involvement of skilled auditors with specialized knowledge in the industry to ensure the high audit quality and the transparency of information in intelligent manufacturing enterprises.Originality/valueThis study builds upon previous research that has shown the importance of artificial intelligence in enhancing audit procedures. It contributes to the existing body of knowledge by examining how enterprise intelligent manufacturing systems (IMS) enhance audit quality. Additionally, this study provides valuable information on how to improve audit quality in the field of intelligent manufacturing by strategically selecting auditors based on resource dependency theory.

What Lies Beneath: A Development-Oriented Auditing Approach to Understand Organizations Beyond the Surface of Hard-Control.

Auditing procedures aim to improve educational quality in vocational education and training. Auditing approaches often focus on checking for compliance to rules and standards. Through dialogue, development-oriented audits are thought to inspire soft-control, a form of control that aims to address what is beneath the surface of mere compliance. These kinds of audits offer opportunities to demonstrate ethical leadership as part of an ethical culture. It is expected that an ethical culture variables positively influence working climate variables and ultimately intrinsic motivation. In this study, conducted as part of the (Hermanussen et al., 2022) study, we employed structural equation modeling to test if model behavior and sanctionability positively influenced perceived autonomy, perceived relatedness, trust, and self-efficacy, and ultimately intrinsic motivation. The study was conducted at eight different Dutch secondary vocational education and training organizations including 1223 participants. Results demonstrate a good model fit, χ2 = .12, df = 3, p = .989, GFI = 1.00, AFGI = 1.00, and RMSEA <.001. All presumed effects were significant. The strongest effects include model behavior on autonomy (.49) and autonomy on intrinsic motivation (.45). Future research should employ designs and analyses that are able to account for a multilevel structure in educational organizations.

Investigation of the Current Internal Audit Processes and Procedures within Morogoro Municipal Council

This study focused on investigating the current internal audit processes and procedures within Morogoro Municipal Council. A descriptive research design and quantitative approach were utilized, targeting Morogoro Municipal Council staff and internal auditors with a sample size of 74 respondents selected via simple random and purposive sampling methods, respectively. Data was gathered through questionnaires for staff and interviews for auditors, supplemented by secondary data from relevant documents. While most respondents agree that the internal audit processes are well-documented, effectively communicated, and robust enough to address risks, there are concerns about adherence, resource adequacy, and the independence of the audit function. To improve effectiveness, it is recommended that the Council enhance adherence to procedures, allocate adequate resources, strengthen the independence of the audit function, and ensure regular updates to audit procedures. These steps will better support governance, accountability, and overall organizational efficiency.

ОСОБЛИВОСТІ АУДИТУ ДОХОДІВ, ВИТРАТ І ФІНАНСОВИХ РЕЗУЛЬТАТІВ ВІТЧИЗНЯНОГО СІЛЬСЬКОГОСПОДАРСЬКОГО ПІДПРИЄМСТВА В УМОВАХ ВОЄННОГО СТАНУ

The article is devoted to the study of the audit of income, expenses, and financial results of agricultural enterprises in Ukraine during the martial law. The main problems of the domestic agricultural industry, caused by the specifics of the industry, are identified: deterioration of economic conditions, economic difficulties, competition problems, infrastructural limitations, personnel problems, difficulty in obtaining permits and certification, limited access to modern technologies. It is substantiated that the problems of the organization of accounting and management of agricultural enterprises are represented by insufficient automation of accounting and control processes, insufficient investment attractiveness of these enterprises in reporting, the complexity of accounting for supply processes, production and formation of costs, the complexity of obtaining loans, the complexity of tax accounting. The identified problems of the functioning of domestic enterprises in the conditions of martial law: the threat of security for workers and resources, the complication and increase in the price of the supply and implementation process, the loss of qualified labor, economic difficulties, the instability of legislation, the cancellation of benefits. It was established that the state of war in Ukraine causes additional problems for auditing: changes in the conditions of audit activity and audit risks, the complication of forecasting and assessment of financial results, the need to assess the impact on financial reporting of changes in accounting policies and management strategies, the need for additional audit procedures to determine and settlement of new risks. The work analyzes the peculiarities of the audit process of financial reporting of an agricultural enterprise, its income, expenses, and results of activity. The study showed that the main factor influencing the quality of the audit is the use of effective audit procedures. The work presents directions for optimizing the audit due to its digitalization, identifies problems that may arise, and suggests ways to solve them.

The Effect of Nature of Critical Audit Matters and Outcome Indication on Investors’ Decisions

ABSTRACT Two aspects of critical audit matter (CAM) disclosure are (1) whether it relates to complexity in audit judgments (complex CAM) or uncertainty in underlying management estimates (uncertain CAM) and (2) whether an indication of the outcome of audit procedures performed to address the CAM is included in the disclosure. We use two controlled experiments to examine the joint effects of CAM nature and the presence of a CAM outcome indication on investors’ judgments of investment attractiveness. In the first (second) experiment, we used a stronger (weaker) outcome indication, which provides stronger (weaker) conclusions about the audit procedures performed to address the CAM. We find that the provision of a stronger (weaker) outcome indication increases investment attractiveness judgments to a greater (an equal) extent for an uncertain CAM than for a complex CAM. Data Availability: Please contact the authors.

A compliance and audit model for tackling tax evasion in Nigeria

Tax evasion remains a significant challenge for Nigeria, undermining economic stability and reducing public revenue. This paper proposes a comprehensive compliance and audit model designed to address tax evasion in Nigeria. The model integrates enhanced compliance strategies, advanced audit procedures, and the strategic use of technology to create a robust framework for tackling tax evasion. The proposed model emphasizes proactive measures to improve taxpayer compliance through targeted education and outreach programs, streamlined reporting processes, and incentivization. On the audit front, it advocates for the adoption of sophisticated audit techniques and technologies, including data analytics and automated systems, to detect and address evasion more effectively. The implementation framework outlines a phased approach involving key stakeholders such as the Federal Inland Revenue Service (FIRS), local tax authorities, and the private sector. By examining domestic and international case studies, the paper highlights successful practices and potential challenges, providing actionable insights for adapting these strategies to the Nigerian context. Evaluation metrics are proposed to assess the model’s effectiveness, with expected outcomes including improved tax revenue, enhanced compliance rates, and strengthened public trust in the tax system. The study concludes with recommendations for further research and policy adjustments to refine and expand the model's application. This approach aims to not only mitigate tax evasion but also contribute to a more transparent and equitable tax system in Nigeria.

Маркетинговый аудит в управлении инновационной деятельностью компании: методология и метрики

In today's complex digital business world, almost every company understands the importance of introducing innovations in the process of operation. At the same time, the issues of diagnosing and assessing the results of the chosen innovative path using a marketing audit remain relevant for the reason that there is simply no ready-made template or algorithm for conducting a marketing audit of a company. The problem is the ambiguous definition of a set of indicators for the marketing audit procedure. The purpose of the work was to determine the importance of conducting a marketing audit in the process of managing an innovative company using the algorithm and metrics of a marketing audit. The methodological basis of the study was a review of scientific works of Russian and foreign authors on the issues of conducting marketing audits and an analysis of the operating features of companies involved in the development and implementation of innovations. The specific features of managing an innovative company were identified, and the methodological and methodological problems of conducting a marketing audit of an innovative company were identified. The results of the study showed that the approaches existing in foreign and domestic literature that describe the process and mechanics of conducting a marketing audit are fragmentary. The work proposed its own algorithm for conducting a marketing audit, and identified a set of additional quantitative indicators (metrics) for a more complete and comprehensive procedure for conducting a marketing audit for managing the innovative activities of a company operating in conditions of uncertainty, risks and competition. The article substantiated the importance and relevance of introducing a marketing audit algorithm. The results of the study can be used by innovative companies when conducting a marketing audit procedure.

METHODOLOGICAL APPROACHES TO TAX AUDIT: THE IMPERATIVE OF ANALYSIS UNDER THE CONDITION OF UNCERTAINTY OF THE TERM

Introduction. A tax audit is a comprehensive examination of the financial activities of business entities with the aim of assessing compliance with tax legislation and identifying possible violations. In modern conditions, when economic instability and constant changes in tax legislation are becoming the norm, ensuring the effectiveness and accuracy of tax audits requires the use of complex methodological approaches. One of the key problems of the tax audit is the uncertainty of terms, which makes it difficult to plan and conduct audit procedures. Uncertainty can be caused by various factors, including changes in legislation, economic crises, force majeure and other unforeseen events. This uncertainty creates additional challenges for auditors who must adapt their methodological approaches to new conditions. The purpose of the article is considering methodological approaches to the interpretation of tax audits, identify their advantages and disadvantages. To justify the analysis as an imperative element of the tax audit method in the system of control over compliance with tax legislation. Methods. The following methods were used in the study of methodological approaches to tax audits in conditions of uncertainty of terms: analysis of literary sources. A systematic review of scientific publications, articles, monographs and legal acts related to tax audit was conducted. This made it possible to identify existing approaches and theoretical foundations; Comparative analysis: a comparison of different methodological approaches used in tax audits in different countries and conditions was made. This helped identify the most effective practices and adapt them to conditions of uncertainty. Results. A detailed substantiation of methodological approaches to the interpretation of tax audit from the standpoint of linguistic semantics strengthens the opinions of those scientists and practitioners who believe that in parallel with independent audit and audit services in the field of taxation, the concept of tax audit can be used for inspections carried out by tax authorities. In this case, both tax authorities and independent auditors have the right to use the concept of tax audit and have the right to conduct it. However, in our opinion, it is more appropriate to use two separate terms, in particular, such as "state tax audit" and "independent tax audit".

Corporate environmental, social, and governance information disclosure and audit governance in the context of green development

The purpose of this paper is to investigate the relationship between Environmental, Social, and Governance (ESG) disclosure and audit governance. The objective is to assess the impact of auditor team independence, auditor professional quality, and transparency of audit procedures on the quality of information disclosure, and to elucidate the role of these factors in advancing sustainable development. Research methodologies include the optimization of information disclosure text analysis using natural language processing (NLP) and text generation techniques, complemented by empirical analysis. Key findings indicate that the maximum error between NLP and manual annotation in the proportion of positive emotions in information disclosure is 0.03, and 0.06 in audit governance. The Rouge index score surpasses the 0.5 threshold, while the Perplexity value varies across three experiments, though remaining generally low. Deep learning model results reveal that auditor team independence, professional quality, and procedural transparency significantly enhance the quality of information disclosure. These findings offer crucial insights for enterprises, regulators, and investors, affirming the rationality and stability of the model, and providing valuable input for future green development strategies and decision-making processes.

Assessing the solvency of virtual asset service providers: are current standards sufficient?

ABSTRACT Centralized cryptocurrency exchanges, which manage annual trading volumes on the scale of trillions of US dollars worldwide, are classified as virtual asset service providers (VASPs). They facilitate the exchange, custody, and transfer of cryptoassets organized in wallets across distributed ledger technologies (DLTs). As any corporation, VASPs can become insolvent. Despite the public availability of DLT transactions, their cryptoasset holdings are not yet subject to systematic auditing procedures. In this paper, we propose an approach to assess the solvency of a VASP by cross-referencing data from three distinct sources: cryptoasset wallets, balance sheets, and supervisory entity data. We investigate 24 VASPs registered with the Financial Market Authority in Austria. Regulatory data insights show that their yearly incoming and outgoing transaction volume amounts to 2 billion EUR for 1.8 million customers; the financial services they provide position them closer to brokers, money exchanges, and funds, rather than banks. Next, we empirically measure DLT transaction flows of four VASPs and compare their cryptoasset holdings to balance sheet entries. Data are only partially consistent; this enables us to identify gaps in the data collection and propose strategies to address them, towards achieving a more systematic, reliable, and automated assessment of VASPs solvency.

Evaluasi Prosedur Audit atas Persediaan Obat-Obatan pada Rumah Sakit X Oleh Kantor Akuntan Publik ZYX

Inventory of medicines in hospitals is an important and significant asset. The inventory of medicines must be adjusted to meet the substantial treatment needs of the hospital, as inadequate pharmacy efficiency can prevent healthcare services in the hospital. The inventory of medicines in hospitals hold significant importance as it impacts the quality of service delivery. Therefore, auditors perform inventory audit procedures to verify that the inventory reported in the financial statements is consistent and accurate with the actual conditions in the field. The purpose of this research is to evaluate the performance of auditors in auditing financial statements, especially focusing on inventory accounts. The method used is a qualitative descriptive method with primary data sources from interviews with auditors at the Public Accounting Firm (KAP). Advices for auditors at KAP ZYX are improving their skills and knowledge regarding the audit process or the latest regulations through training and experience that can increase their insight.

Determining the materiality for auditing procedures in relation to integrated reporting

Subject. This article examines the problem of fragmentation of the methodology for auditing (certifying) non-financial reporting, namely, determining the materiality for auditing procedures in relation to integrated reporting. Objectives. The article aims to analyze and work out the existing methodological approach to determining materiality for auditing procedures in relation to integrated reporting, taking into account the features of modern corporate reporting and the requirements of international standards. Methods. For the study, I used logical analysis and synthesis. Results. The article proposes a systems approach to the implementation of audit procedures in terms of unifying the process of determining materiality in the context of the changing paradigm of corporate reporting. Conclusions. When determining materiality as part of audit procedures in relation to integrated reporting, the article recommends adhering to the principle of quantification of double materiality in relation to the financial materiality of the business process decomposed by the cost item.

Opportunities to Advance Equity Through Implementation Strategy Design.

Implementation strategies are potential tools for advancing equity goals in healthcare. Implementation scientists have increased attention to the integration of equity considerations into implementation research, but limited concrete guidance is available for developing implementation strategies to improve equity. In parallel to an active hybrid effectiveness-implementation trial in two large health systems, our research team explored potential inequities in implementation across four non-study clinics, developed equity focused audit and feedback procedures, examined the feasibility of our approach, and identified design insights that could be tested in future work to inform equitable program scale-up. Based on our experiences deploying these strategies in pilot format, our research team identified key complexities meriting further examination in future work. These considerations are vital given the dearth of guidance on delivering feedback to clinicians in efforts to improve equity. Key takeaways include the importance of understanding local data culture, engaging constituents in co-design for the full feedback cycle, leveraging feedback for shared discourse, and centering multi-level strategies as part of robust implementation approaches. Prioritizing health equity in implementation science requires that research teams probe, interrogate, and innovate - and in doing so, grapple with central conceptual and pragmatic considerations that arise in the design of implementation strategies. Our work emphasizes the value of bidirectional and continuous learning.

Procurement Audit on Organizational Service Delivery in Uganda

The researcher was interested in investigating the impact of procurement audits on organizational service delivery in Uganda. The article revealed that the government must enhance its procurement audit procedures to facilitate the efficient use of resources by public bodies and to support democratic governments. This can be achieved by promoting accountability and transparency, which can enhance operations and decision-making. All work in government bodies must ensure that goods and services, including works, are based on value for money, with due regard to propriety and regularity. Value for money does not aim to achieve the lowest initial price, but rather to satisfy the demands of stakeholders. On this note, the study calls for the government to establish systems and procedures for quality assurance, especially for auditors. Government officials should document and adhere to the budget and timetable. Government officials should monitor progress towards these targets. The audit manager and audit committee management should take responsibility for completing procurement audits within budget and on time. The design of quality control procedures should guarantee that all audits adhere to relevant standards and policies without any deviation. Keywords: Audit, Government, Organizational service, Procurement, Service delivery

ANALISIS PROSEDUR AUDIT KAS DAN SETARA KAS PADA PT ABC OLEH KAP BUNTARAN &amp; LISAWATI

Audit of cash and cash equivalents is a procedure used to examine the fairness of the presentation of cash and cash equivalents balances in the company's financial statements. This study aims to determine whether the audit procedures carried out by KAP Buntaran &amp; Lisawati at PT ABC are in accordance with generally accepted standard audit procedures for cash and cash equivalents. The research method used is descriptive qualitative research method by presenting conclusions or results from the data collected based on a theoretical concept. The results showed the procedures carried out by KAP Buntaran &amp; Lisawati auditors during the examination of cash and cash equivalents at PT ABC. The conclusion of this study is that the inspection procedures for cash and cash equivalents carried out by KAP Buntaran &amp; Lisawati auditors are in accordance with generally accepted procedural standards, so that auditors are expected to be able to detect material misstatements during the audit of PT ABC

Concept, objectives and procedure of human resources audit

Concept, objectives and procedure of human resources audit

Pelaksanaan Prosedur Pengujian Asersi LPPDK Pada Audit Dana Kampanye Tahun 2024 Oleh KAP LMR

This research aims to determine the implementation of campaign finance audit procedures and evaluate their conformity with applicable quality standards. The case study was conducted at the Public Accounting Firm (KAP) Luthfi Muhammad &amp; Partners. The data source was obtained from interviews with partners, the head of the audit implementation team, and members of the campaign fund auditors of KAP Luthfi Muhammad &amp; Partners. The research results showed that KAP Luthfi Muhammad &amp; Partners did not make direct visits to the clients concerned when collecting the required reports and supporting evidence because it was done via the SIKADEKA website. At the stage of auditing campaign funds, KAP Luthfi Muhammad &amp; Partners has referred to KPU regulations and applicable audit standards. Namely PKPU No. 18 in 2023.

COMPARATIVE ANALYSIS OF TRANSFER PRICING LEGISLATION IN THE REGULATORY FRAMEWORK OF EU MEMBER STATES

The article carries out a comparative analysis and assessment of the adequacy of legal regulation of transfer pricing in the EU Member States. The necessity and importance of studying foreign experience in building and improving the legal framework for transfer pricing is substantiated. The authors determine that the relevance of transfer pricing and related issues both in terms of ensuring the proper functioning of the single market and eliminating base erosion and profit shifting is confirmed by the existence of a special advisory body under the European Commission - the Joint Transfer Pricing Forum (JTPF), which advises the European Commission on transfer pricing taxation. The article identifies the main aspects of transfer pricing regulation in the EU Member States with a view to a detailed analysis of the regulatory framework. The criteria of related parties in the EU transfer pricing legislation are studied. It is found that a common feature in the definition of related parties is the direct or indirect influence of one person on another. The author examines and compares the grounds for conducting an audit in the EU transfer pricing legislation and finds that in the vast majority of EU Member States there is a so-called "self-assessment" regime for companies, according to which the taxpayer must ensure compliance with the transfer pricing rules; the risk factors that are relevant for conducting an audit of transfer pricing transactions are legally defined; common factors for the sample of countries studied are: unprofitability of a group of companies against the background of profitability of other entities. It is concluded that the studied foreign experience of regulatory and legal regulation of transfer pricing transactions on the example of individual EU Member States has shown a high level of unification of legislation in the field of transfer pricing, with minor differences in the provisions of the national legal framework; the differences are mainly in the systematic nature of determining the criteria of relatedness of parties in transfer pricing transactions and the grounds for conducting audit procedures on such transactions.

Peripheral Benefit of Single Audit Monitoring in Attracting Charitable Donations

SYNOPSIS Our study examines whether the presence of a Single Audit is positively associated with charitable donations. A Single Audit offers incremental monitoring benefits beyond a basic financial audit. Specifically, it includes additional audit procedures and publicly disclosed reporting on internal controls over financial reporting and on compliance over major programs. In an entropy-balanced sample of 44,364 observations over the period 2010 to 2016, we find that charities subject to a Single Audit receive higher donations, regardless of whether the audit reveals internal control deficiencies. We find similar results when donors are more sophisticated, but not when they are less sophisticated. Finally, our results show donors differentiate between clean and unclean audit findings when deficiencies are defined more strictly as material weaknesses only. Policymakers, charities, and other stakeholders should be interested in the finding that Single Audits, often viewed for their costs, also yield a peripheral monitoring benefit by attracting donations. Data Availability: All data are from publicly available sources quoted in the text. JEL Classifications: M41; M42; M48.