Audit Work Research Articles

Internal audit under martial law

Introduction. In the conditions of martial law, the work of the internal audit system changes and is revised. Having analyzed the points of view of scientists and forensic specialists regarding the work of the internal audit service during the war, which determined the purpose of the paper. The purpose of the paper is to consider the possibilities of internal audit during martial law, its purpose, functions and tasks during this period. Results. During the writing of the paper, general logical methods of scientific research were used: observation, analysis and synthesis, theoretical generalization. It has been proved that the control function of audit during war is not as important as before war. The advisory function of the internal audit becomes the main one during the war, it will contribute to the preservation of business and the reduction of enterprise risks. It is proposed to use the work experience of internal auditors acquired during the Covid-19 pandemic. It is important to improve the efficiency of internal audit work in the company is to use a systematic approach that will contribute to the efficiency of the work of internal audit representatives. Conclusions. Martial law changed the purpose, functions and tasks of internal audit. During the war, its purpose is the continuity of the company's activities and the preservation of assets, the physical safety of personnel. The main function is consulting, analytical and predictive functions are of great importance.

The Enlightenment of Wang Anshi's Reform to Our Current Audit Work

Since the founding of New China, China's audit system has been unremittingly explored. Under the correct leadership of the Communist Party of China, China's audit system has blazed a socialist audit road with Chinese characteristics. In recent years, the importance and status of audit work become more and more prominent, and the country is constantly promoting the development of audit work. However, the audit system of socialism with Chinese characteristics still faces many realistic difficulties and needs to be reformed. How to solve the existing problems of the audit system, how to make the audit system make greater contribution to the modernization of the national governance system and governance capacity, how to make the audit system better promote the prosperity and rejuvenation of the country and realize the great rejuvenation of the Chinese nation and a series of issues are still waiting to be explored.

International auditing standards and their role in achieving financial transparency requirements in insurance companies

The research discusses the role of International Auditing Standard No. 20, in achieving financial transparency, which has become an international requirement for organizations to classified and adopt their data as an economic indicator of the efficiency of the markets in which these organizations operate. And the research discussed the concept of international auditing standards and their relationship to achieving Elements of financial transparency through the application of its principles in organizations. And research reached a number of results, the most important is the weak interest of the auditing bodies in insurance companies to share the results of audit work with the media and the parties interested in the results of their work and their weak role in attracting researchers’ attention to the results of their work as part of the requirements Audit Standard No. 20.

PENGARUH INDEPENDENSI, PROFESIONALISME DAN PENGALAMAN KERJA DALAM KINERJA AUDITOR

<p align="justify">The purpose of this study was to determine the Effect of Independence, professionalism, and Work Experience on Auditor Performance in the Inspectorate of Maluku and Ambon City. This research method is quantitative research. The sample used is functional auditors work in the inspectorate of Maluku and Ambon City as 40 respondent. Data analysis method is SPSS version 22. The result of this study indicate independence and professionalism have effect on auditor performance, but work experience have not effect on auditor performance.</p><p><strong>Key words:</strong> Independence, Proffesionalism, Work Experience, Auditor Performance</p>

The Possibility of Applying Agile Internal Auditing in the Iraqi Economic Units

The research problem is that the traditional methods of internal auditing are somewhat heavy with long and rigid procedures for the members of the audit process team, especially in light of the current developments that are reflected in the business environment and internal audit reports, so it is necessary to reconsider the traditional internal audit work method and assess the extent of its development by agile methods to reduce the time of the audit process on the activities and elements that add value and direct the effort and time to the activities and elements that add value to the work of the economic unit and the report of the internal auditor.
 The research aims to study the possibility of applying agile internal auditing in the Iraqi economic units and to achieve the goal of the research. The researchers made a checklist to test the research hypothesis, which states (there are no applications of lean internal auditing methods in the local environment). For (6) private banks listed in the Iraq Stock Exchange, which number (69) banks, after reviewing the periodic reports prepared by the Central Bank of Iraq.
 The researchers concluded that the banks of the research sample applied to the graceful internal audit in the Iraqi economic units is the Ashur Bank, as it obtained the highest arithmetic mean reached (2.55) and the highest relative importance as it amounted to (85.0%) and the second place the Iraqi Investment Bank got the arithmetic mean (2.48) and importance Relative (82.7%). In third place, the Khaleej Commercial Bank got an arithmetic mean (2.39) and relative importance (79.7%). In fourth place, the Trans-Iraq Bank got an arithmetic mean (2.28) and relative importance (76%). In fifth place, the Iraqi Islamic Bank got on the arithmetic mean (2.24) and relative importance (74.7%).
 
 Paper type: Research Paper

The Effect of Professional Ethics, Independence, and Audit Expertise on Auditor Performance

The research objective was to examine and analyze the effect of professional ethics, independence, and audit expertise on auditor performance. Meanwhile, the long-term objectives to be achieved in this study are to establish a policy on the duties and functions of auditors, so that they can improve the performance of auditors, and comply with the principles and norms in auditing (Examination). A set of Auditor professional ethics is a professional job in running it governed by the rules that have been set and each member (auditor) obeys it. The level of auditor independence is the responsibility of the public accountant profession which is expected to indirectly reflect independence and in carrying out its work it is obscured to be impartial in preparing reports on the results of audits that will be accepted by Government Agencies, the business world, and investors. In addition, auditors are required to have audit expertise in their duties which include audit expertise which includes planning audit work programs, compiling working papers and reports on audit results. To achieve specific research objectives, researchers will conduct research at the Central Sulawesi Province Financial and Development Supervisory Agency (BPKP). The data used are primary data by giving a questionnaire to each auditor at the Financial and Development Supervisory Agency of Central Sulawesi Province, and to deepen the data the researchers will conduct interviews with BPKP leaders of Central Sulawesi Province, the data are analyzed and evaluated by multiple linear regression analysis through the Normality Test, Multicollinearity. and heteroscedasticity. The results of research can contribute to the development of science, especially in the field of auditing through analysis and testing of theoretical suitability, through variables of professional ethics, independence, and audit expertise. The results of the research can be used as a source of information and as a basis for making policies related to auditor performance.

The effect of tax risk on audit report delay: Empirical evidence from Indonesia

Tax risk has the potential to have far-reaching economic consequences, including the effect on late audit reports. This study aims to empirically investigate the effect of tax risk on audit report lag. This study took a quantitative approach. Companies listed on the Indonesia Stock Exchange (IDX) between 2012 and 2017 were used as samples. Our final observations consist of 1,813 firm-years. We find that the tax risk has no effect on audit report lag. This finding holds up when one alternative measure of tax risk and several additional control variables are considered. The result of this study has clear implications not only for company management but also for tax authority. Company management is required to always implement good tax risk management practices because this can result in a relatively low corporate tax risk. A relatively minor tax risk will have no effect on auditors’ performance in completing audit work so that companies can submit their financial reports on time. Furthermore, the tax authority benefits because the finalization of tax collection settlement is improved. Tax authority is encouraged to always maintain tax regulations that are not overly complex, complicated, or change too frequently.

Роль внутрішнього аудиту у системі управління підприємством

Abstract. Introduction. It has been established that internal audit is one of the types of internal economic control of business entities. The main criteria for the quality of conducting an internal audit as a management function are the efficiency, productivity and cost-effectiveness of the internal audit system. Purpose. The purpose of the article is to reveal the need for internal audit at the enterprise and the peculiarities of its organization. Results. It has been established that internal audit is one of the types of internal economic control of business entities. The main criteria for the quality of conducting an internal audit as a management function are the efficiency, productivity and cost-effectiveness of the internal audit system. The need for the functioning of the internal audit service at the enterprise is substantiated. The peculiarities and methods of its organization are considered, and their positive and negative aspects of internal audit are determined. The content of the concept of "internal audit" and the question of the need for its operation at the enterprise as a tool for improving the efficiency of the accounting system and activities as a whole are revealed. The main stages of internal audit are formulated and a set of qualitative and quantitative parameters for evaluating the effectiveness of the accounting system is proposed, based on the directions of research of individual objects (elements) of the accounting system by means of internal audit. The tasks of the internal audit regarding the evaluation of the efficiency of the enterprise's accounting system have been substantiated and specified. Conclusions. It has been proven that the effectiveness of internal audit at enterprises is determined by the level of its organization. The main objects of the internal audit organization are the creation and organization of the work of the internal audit system, the organization of the work of internal auditors, and the organization of the internal audit process.

The relationship of internal auditors’ characteristics with external auditors’ reliance and its impact on audit efficiency: Empirical evidence from Indonesian government institutions

Previous studies have separately investigated the relationship between the internal auditors’ characteristics, the level of external auditors’ reliance, and the audit efficiency so it has not fully described how the external auditors make decisions to rely on internal audit work, which has an impact on audit efficiency. Therefore, the current study aims to fill the research gap by analyzing the relationship among the internal auditors’ characteristics, external auditors’ reliance and audit efficiency in one comprehensive research model with the institutional environment as a moderating variable in the relationship between the level of external auditors’ reliance and the audit efficiency. This study is conducted in government organizations with the consideration that the reliance of external auditors on internal audit work is one of the strategies for dealing with the limited resources faced by government external auditors in Indonesia. Surveys are conducted to collect research data. The research subjects are 164 external auditors (BPK) from 34 representative offices in Indonesia. The data are analyzed using Partial least Square-Structural Equation Modeling. The results of this study show that the level of external auditors’ reliance on internal audit work has a significant effect on audit efficiency. Furthermore, the results also show that there is a moderating effect of the institutional environment on the relationship between the level of external auditors’ reliance and audit efficiency. This study contributes to the application and development of relational coordination theory and institutional theory in accounting and auditing fields, especially in government sector audits.

A Case for Audit Automation: Evidence from Auditing Literature and an Internship During the Pandemic

External auditing is the branch of accounting where an independent accounting firm examines an organization’s financial records and provides a reasonable level of assurance that the financial statements are in accordance with generally accepted accounting principles. This is crucial to organizations in order to make a company’s financial records and, therefore, its economic condition clear and understandable both to its managers and to potential investors. The aim of this research is to examine the auditing profession and its technological advancements, particularly in light of the COVID-19 pandemic, and determine whether the remote nature of audit work since 2020 has been beneficial or detrimental. The research process consisted of review of prior research sources combined with knowledge obtained from firsthand experience in an accounting firm during the pandemic. The conclusion of this research suggests that the new methods were overall advantageous to auditors. Although some audit procedures may still require traditional methods in order to be most dependable, many auditors should consider permanent adoption of the new methods.

The The Auditing Analytical Procedures at the Beginning and Completion Phases of Engagement Toeing Discourse Analysis

This study examines external auditors lived experiences on the use of the analytical procedure (AP), drawing on interpretative perspective. Interviews of 14 experts conducted with auditors of Big4 firms and the archival data from the International Standards for Auditing (ISA) constitutes the data corpus. What we lose with the apparent number of the interviewee, we gain from the stream of knowledge of the auditors. Methodologically wise, discourse analysis was applied for data analysis. Results showed that in the imagination of the auditors, the use of AP enhances the efficiency and effectiveness of the audit. However, in the day-to-day practice, due to weaknesses in the preparation and review processes, professionals do not find pleasure in it since AP is executed to meet standards. So, drawing on New Institutional Sociology theory, a search for legitimacy justifies this end. Findings raise a concern on what practitioners ought to focus on for evidence gathering. This study advances upon the disposition of the audit work, the real need for the imposition of audit procedures by regulatory bodies, and exposure of the theme in academia. Overall, considering that on this topic, quantitative studies are mostly studied, the originality of this research spans the discourse analysis toeing interpretative perspective.

Artificial Intelligence In The Big Data Era And Digital Audit

The technology industry has entered the 4.0 era, also known as the Artificial Intelligence (AI) era, which has greatly affected various aspects of human life, particularly with the advancement and growth of big data. The integration of AI in our daily lives, including accounting, has made work more efficient, but also brought both positive and negative impacts. The accounting industry is moving towards the digital audit era, which has transformed the perspective of auditors by digitizing their work and making it easier to access and analyze data. This study aims to investigate the impact of AI development on big data and digital audit, the implications of the gap between big data technology and AI and digital audit, as well as the improvement of auditor's work quality and efficiency due to AI and big data technology. The study utilized both quantitative and qualitative research methods, and concludes that the development of Artificial Intelligence has a significant impact on the work of auditors. However, the study acknowledges its limitations, such as the restricted sample size and time constraints which limited the data analysis to multiple linear regression analysis.

International standards of audit: update of implementation practice in Ukraine

Methods. The methodological basis of the study was the work of domestic and foreign scientists and international audit standards. The results were obtained through the application of methods of analysis and synthesis to generalize the directions of development and existing shortcomings in the activities of audit subjects, to develop the forms of the auditor's working documents; historical and logical when establishing audit quality as a strategic direction of its development; general and special when determining specific steps in response to overcoming current shortcomings and future challenges; system approach for summarizing statements considered by the auditor when identifying risks of material misstatement. Results. The article summarizes the scientific and methodological approaches to determining the quality of audit services as a strategic direction of audit development in Ukraine and the world. Current vectors of audit development and its weaknesses at the organizational and practical levels, in particular, the shortcomings of auditors' activities in assessing the risks of material distortion, are analyzed. The specific steps that should be implemented by the subjects of audit activity within the framework of harmonization with the EU requirements have been determined. Examples of audit procedures (execution of actions in response to assessed risks) in the format of the auditor's working documents are offered. The categories of assertions considered by the auditor when identifying risks of material misstatement are systematized. Novelty. The strategic, scientific-methodical, and organizational-practical foundations of improving the quality of audit activity in the conditions of the European integration of the Ukrainian economy and the implementation of European legislation are summarized. Practical value. The results of the research are of an applied nature since they allow the implementation of relevant strategic directions and scientific and methodological developments, eliminate organizational shortcomings of auditing activities, and form a modern approach to improving the quality of auditing firms in Ukraine, which ensures the confidence of users of financial information.

IMPLEMENTASI REMOTE AUDIT DI ERA PANDEMI COVID-19

The COVID-19 pandemic has caused the structure of life to change, such as the way auditors work. All access is limited and the auditor's work is hampered. So one alternative that can be done is to carry out a remote audit. This study aims to determine the implementation of remote audits in the era of the COVID-19 pandemic. This study uses a qualitative approach and is included in the literature review. The data used by researchers is secondary data, namely using previous research. Sources of information are obtained by collecting relevant information regarding the implementation of remote audits in the era of the COVID-19 pandemic. The results of the study show that the implementation of remote audits has been carried out by foreign government entities and by domestic agencies or institutions. The remote audit implementation includes the planning stages, document review, field inspections, remote interviews and closing meetings.

KETERKAITAN ANTARA AUDITOR SWITCHING DENGAN FINANCIAL DISTRESS, AUDIT FEE, DAN AUDIT DELAY PADA PERUSAHAAN MANUFAKTUR

Auditor switching is an event where the company changes its cooperation with the auditor and the Public Accounting Firm (KAP). Auditor switching can be done either mandatory or voluntary. Voluntary auditor switching can be caused by several factors such as financial distress, audit fees, and audit delay. Accounting phenomena that have occurred, such as the Enron and KAP Arthur Anderson cases, the Waste Management Inc case, the Satyam case in India and the PT Great River International, Tbk. case, prove the need for auditor independence in carrying out audit work in a company. One way that can be done to maintain auditor independence is to conduct auditor switching, so that the cooperation that exists between the auditor and the company is maintained properly. This research is a qualitative research where the researcher uses the literature study method. This literature study was conducted by researchers referring to previous studies to further analyze the effect of variables such as financial distress, audit fees, and audit delay on auditor switching in manufacturing companies. According to the results of literature studies that have been carried out by researchers in previous studies, it can be concluded that the financial distress variable has no effect on the occurrence of auditor switching, while the audit fee and audit delay variables have implications for the occurrence of auditor switching in manufacturing companies.

Research on the Construction of Evaluation System of Tax Professional Training Based on OBE Concept

In order to effectively carry out a new round (2021-2025) of audit and evaluation work, the effect of professional personnel training scientific and reasonable evaluation, this paper puts forward the idea of constructing the evaluation system of professional personnel training in taxation based on the OBE concept. It discusses the OBE core concept of the design of the taxation professional talent training evaluation system from the aspects of the relationship between the training objectives and talent training requirements, the characteristics of students' learning results, the principles and procedures of the evaluation system construction, and the evaluation organization and implementation.

The interaction effect of auditor industry specialisation and board governance on financial reporting timeliness: evidence from the UAE

PurposeThis study investigates how the timeliness of financial reporting by listed companies in the United Arab Emirates (UAE) is influenced by the interaction effect between industry-specialist auditors and board governance.Design/methodology/approachThe Emirati capital markets – the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM) – were used to obtain the data, which covered the seven-year period between 2011 and 2017. In total, 385 observations were obtained. Descriptive statistics and multiple regression were the principal statistical tests employed using the panel data method.FindingsThe results of the direct effect tests reveal that board independence and industry-specialist auditors have no significant influence on financial reporting timeliness. Nevertheless, the results also show that the timeliness of financial reporting by listed companies in the UAE is influenced by the interaction effect between auditors' industry specialisation and the governance of firm boards. More specifically, the results reveal that financial reporting timeliness is positively associated with board independence for companies audited by industry-specialist auditors. This finding is consistent with the notion that industry-specialist auditors complement the role of effective board governance.Research limitations/implicationsThis study only focuses on secondary data from non-financial companies listed in the UAE markets. Therefore, the outcomes may not be generalisable to sectors related to finance. Future researchers are recommended to examine financial sectors and apply alternative measurements such as surveys or interviews with directorial boards and external auditors. Furthermore, this study used only one measure of industry-specialist auditors, while board governance was limited to board independence. Future studies could utilise different measurements for industry-specialist auditors and more board governance measures to obtain more robust findings.Practical implicationsThe evidence provided indicates that when a company listed in the UAE has a high-quality board, it benefits by engaging auditors who specialise in the industry in terms of improving the timeliness of financial reporting. The findings also indicate the need for closer monitoring of management to safeguard their reputation. This might attract the attention of the Big Four audit firms and industry–specialist auditors to continuously re-evaluate their audit work, professional training and staff skills, while they might also try to differentiate their performance and monitoring capabilities from the non-Big Four audit firms and non-industry specialist auditors.Originality/valueThe main contribution of this study to the overall body of research is the concept that having independent directors is associated with improved reporting timeliness because financial reports are monitored with greater efficiency by industry–specialist auditors. This study provides evidence for the interaction effect between internal and external governance mechanisms on financial reporting quality, which has not been the focus of prior studies on financial reporting quality.

Towards the Development of a Framework for Assessing Organizational Governance Maturity for Technical Audit of Public Works

The quality of the audit work and its products is often associated with the organizational maturity of the audit function. The absence of a well-defined organizational maturity for an audit function leads to poor quality of audit work or products and ineffective audit function. The lack of a framework for measuring governance maturity was identified as a major deterrent factor to the attainment of quality audit work. Measuring the governance maturity of the technical audit of public works is challenging due to the absence of a maturity framework that fits its needs. The noted shortcomings include: (a) existing maturity frameworks used to assess organizational maturity have not been developed based on standards and requirements governing technical auditing; (b) defined technical competency for technical auditors, work methods and processes have not been covered in those frameworks rather focused on other types of audits than technical audits; and (c) the institutional framework considered in those frameworks are not applicable in technical auditing. The challenges impede the ability of the technical audit function to establish relevant and reliable criteria to measure governance, and it largely affects the growth of the technical audit functions and the quality of audit works. This paper provides a theoretical overview of what, why and how a framework can be developed for assessing the level of organizational governance maturity for technical audits of public works.

Big Data Analytics and Auditing: A Review and Synthesis of Literature

The use of data analytics in auditing is increasingly growing. The application of common data analytics to audit engagements appears to be lagging behind other areas of practice, even though data analytics is thought to represent the future of audit, and there are still few publications that have examined this influence. This article reviews data analytics in audits and its potential for future audit engagements to describe the evolution of this research trend and picture its future growth directions. Future audit research potential and difficulties are also discussed. Data analytics application in auditing has enormous potential for refining audit quality, decreasing errors, increasing process transparency, and enhancing stakeholders’ confidence. We conducted a systematic literature review using the PRISMA approach. A total of 100 articles published in English from January 2011 to November 2021 were identified through a systematic search of reputed databases, including Web of Science and Scopus and many others. Our analysis reveals that data analytics is a promising domain for the auditing practice as it improves audit efficiency and promotes audit work digital transformation. While reviewing the most pertinent literature in the context of data analytics in auditing, this study offers insights on potential new directions and waning views on big data analytics in auditing. Doi: 10.28991/ESJ-2023-07-02-023 Full Text: PDF

Internal Audit Attributes on the Performance of Projects in Local Government Authorities in Tanzania

This study examined the attributes of internal audit on the performance of the projects in Local Government Authorities in Tanzania, in the way projects are operated and managed, based on the prevailed internal control systems. The role of an internal audit is to ensure the entity provides independent assurance towards risk management, governance and internal controls of the entity. In Tanzania, the Performance of projects are inadequate regardless of massive investments done by the Government. Internal control systems are not strong enough to ensure the performance of projects is compounded at paramount. Hence internal control systems should be addressed to cater the inadequate performance of projects in Local Government. Through examination of the attributes of internal audit work and the performance of projects in Local Government authorities in Tanzania, the study revealed that internal audit had positive influence on the performance of projects. This implied that a unit change in internal audit will increase project performance by the rate of 0.168. Therefore, the study showed that there is a significant direct relationship of internal audit and the performance of the projects in Local Government Authorities. Quantitative data, Likert scale, and multiple linear regression model was used under the study. Likert scales from questionnaires were used whereby data was analyzed by using SPSS V.26 software. These software packages have features that accommodate variables under the study and they are user–friendly. The study concluded that a great use of value-added strategies (rather than consecutive strategies) in audit results to greater performance of the projects implemented into various Local Government Authorities in Tanzania.