Accounting Audit Research Articles

Promoting China’s city-level renewable energy technological innovation through reforming the official promotion system: a quasi-natural experiment

ABSTRACT The promotion incentives for local officials are essential key influencing renewable energy technological innovation in China. However, there needs to be clear evidence that reforming the promotion system promotes renewable energy technological innovation. Employing the Accountability Audit of Natural Resources pilot project as a natural experiment, a difference-in-differences model with multiple periods method was used to test the impact of reforming this system on city-level renewable energy technological innovation. Our findings indicate that such reforms do increase renewable energy technological innovation, with mechanisms involving environmental regulation, research and development investment, intellectual property rights protection, and foreign direct investment. Specifically, this positive effect is most significant in cities with a mayor aged 50 or older due to differing environmental regulations. Both environmental regulation and intellectual property rights protection result in this positive effect being significant only in low administrative level cities and non-resource-based cities. Our finding highlights a breakthrough in the Chinese government’s long efforts to establish a scientific performance appraisal system for officials.

Reformation of government officials’ performance evaluation and corporate environmental investment: The moderating effect of corporate bargaining power

With increasing deterioration of the environment and growing global environmental awareness, there is a need to reform the performance evaluation of government officials from focusing solely on economic growth to incorporating environmental protection indicators. We use the pilot scheme of China's natural resource accountability audit (NRAA) as a natural experiment. Using data for 2010–2022 from Chinese listed companies in heavily polluting industries, we apply a difference-in-differences (DID) model to test the impact of the NRAA policy on corporate environmental investment (CEI) and further examine the moderating role of corporate bargaining power. The empirical results demonstrate that the level of CEI in pilot cities is significantly higher than that in non-pilot cities. However, if firms possess stronger bargaining power, the positive effect of the policy on CEI diminishes. Further analysis reveals that the influence of corporate bargaining power on the effectiveness of the policy can be constrained within the context of better internal and external governance. China's experience provides a viable approach for integrating environmental governance into a more comprehensive framework of performance evaluation systems for government officials.

Hybrid accountability in global health public-private partnerships: a literature and case study

Abstract Background Recent global health public-private partnerships (PPPs) offer novel approaches to public health issues, yet they lack clear public accountability. Hence, it remains unclear how accountability is organised and practiced. This research examines accountability in global health PPPs, how it is manifested, and derives lessons for developing an accountability framework. Methods The study utilized both a scoping literature review, examining the databases SCOPUS, Web of Science and MEDLINE, which yielded 35 eligible articles from 334 records, and an exploratory case study focused on an accountability event within the Global Stop Tuberculosis Partnership (STBP), incorporating a document analysis and an expert interview to enhance insights from the literature review. Results Authors studying PPPs often conceptualized accountability broadly and favoured a view tied to hierarchical state-led governance and democracy. However, at the global level, this political accountability is largely absent. In PPPs, it is replaced by a mix of bureaucratic, legal, social, audit, fiscal, and rather soft accountability mechanisms. Also, PPPs' accountability landscape is dynamic, shaped by different normative considerations and by the interdependence among partners. In 2020, the allegations for misconduct at the STBP exemplified public reputational accountability, followed by audit accountability leading to an enforced soft accountability to STBPs' mission & purpose. Conclusions This study highlights the necessity for rethinking accountability in global health PPPs due to the limitations of existing structuralist frameworks. A new hybrid accountability framework is proposed. It considers a strong accountability focus on PPPs' purpose, their processual dynamics, and normative aspects. Lastly, it is recommended to further investigate the trade-off between transparent accountability mechanisms and the practical necessity for confidential backstage processes in PPPs. Key messages • Exploring a hybrid accountability framework in global health PPPs beyond only static accountability snapshots, helps to understand PPPs’ true dynamic, purpose-driven and individualized accountability. • Without regulatory mechanisms and state governance, individual action and new collaboration become essential, requiring soft accountability mechanisms as increased trust and cooperation among partners.

Intelligent accounting optimization method based on meta-heuristic algorithm and CNN.

The evolution of social intelligence has led to the adoption of intelligent accounting practices in enterprises. To enhance the efficiency of enterprise accounting operations and improve the capabilities of accountants, we propose an intelligent accounting optimization approach that integrates meta-heuristic algorithms with convolutional neural networks (CNN). First, we enhance the CNN framework by incorporating document and voucher information into accounting audits, creating a multi-modal feature extraction mechanism. Utilizing these multi-modal accounting features, we then introduce a method for assessing accounting quality, which objectively evaluates financial performance. Finally, we propose an optimization technique based on meta-heuristic principles, combining genetic algorithms with annealing models to improve the accounting system. Experimental results validate our approach, demonstrating an accuracy of 0.943 and a mean average precision (mAP) score of 0.812. This method provides technological support for refining accounting audit mechanisms.

THE INFLUENCE OF AUDIT DELAY, SIZE OF PUBLIC ACCOUNTING FIRM, AUDIT OPINION, AND MANAGEMENT CHANGE ON AUDITOR SWITCHING

This study explores the impact of audit delay, the size of public accounting firms, audit opinions, and management changes on auditor switching among companies listed on the Indonesia Stock Exchange. The research aims to identify the key factors that influence a company's decision to switch auditors. Using logistic regression analysis and secondary data from financial reports, the study introduces a unique approach by simultaneously analyzing four independent variables, which is rarely done in prior studies. The results reveal that audit delay and management changes significantly affect auditor switching, while the size of public accounting firms and audit opinions do not have a significant impact. The findings suggest that operational and managerial factors play a more critical role in auditor switching decisions compared to financial factors. Theoretically, the study supports the relevance of agency theory in explaining auditor switching, particularly in addressing conflicts of interest between management and shareholders. Practically, these results provide valuable insights for company management when deciding to switch auditors and highlight the importance for regulators to implement policies that enhance transparency and audit quality, strengthening corporate governance practices in Indonesia.

Green signalling under environmental pressure: Does local government environmental regulatory pressure promote corporate environmental information disclosure?

Corporate environmental information disclosure (EID) is an important green signal. While prior literature well documents that the leading officials’ accountability audit of natural resources assets (AANRA) can effectively enhance the environmental regulatory pressure of local governments, little is known about whether this pressure can promote corporate EID. Utilizing panel data of 2,073 Chinese industrial listed enterprises from 2008–2021, we employ a staggered difference-in-difference-in-differences approach and identify the causal effect of AANRA on corporate EID. The results show that the EID quality of heavily polluting enterprises in AANRA cities increases by 3.28 % after the implementation of AANRA, and this effect persists. Meanwhile, AANRA does not trigger selective disclosure of enterprises, and its improvement of negative EID is more effective. Our mechanism analysis suggests that AANRA improves corporate EID through environmental incentive effect, environmental, social and governance (ESG) engagement effect and cost constraint effect. Moreover, the effect of AANRA varies with firms, industries, and regions, and it is more pronounced in non-state-owned firms, small firms, growing and mature firms, highly competitive firms, high-tech firms, and firms located in the eastern region, high audit intensity region and better institutional region. Our findings highlight the role of government environmental regulatory pressure in corporate EID, providing new insights into green transformation for enterprises in developing countries like China.

AKUNTABILITAS PENGELOLAAN WAKAF PADA BAITUL MAAL HIDAYATULLAH PROVINSI BENGKULU

Accountability is important for a waqf management institution. There arevarious ways an institution can demonstrate accountability. This study aims to describethe practice of the accountability of waqf management at Baitul Maal HidayatullahBengkulu. This type of research is a qualitative research with descriptive qualitativeresearch type. This study focuses on 5 accountability mechanisms, namely reportingand disclosure, performance appraisal and evaluation, participation, self-regulation andsocial auditing.The results show that in reporting and disclosure, the financial statements ofwaqf use PSAK 109 and are consolidated with the central Baitul Maal Hidayatullah,data recording of waqf assets in the form of immovable assets is submitted to thedepartment of waqf assets and reports are submitted through various media. In theperformance appraisal and evaluation accountability mechanism, Baitul MaalHidayatullah carries out an evaluation once a month and uses Key PerformanceIndicators as performance appraisal indicators. In the participatory accountabilitymechanism, Baitul Maal Hidayatullah management publishes program plans throughvarious media, involves observers in the implementation of the waqf program, involvesall administrators in institutional decision making. In the self-regulation accountabilitymechanism, the Baitul Maal Hidayatullah administrators provide rewards andpunishments to improve the performance of the management and consult with theRegional Leadership Council and the central Baitul Maal Hidayatullah in resolving waqfproblems. In the social audit accountability mechanism, the management of Baitul MaalHidayatullah provides special media for community aspirations, plays a role in helpingsocial problems and is already responsible for the waqf mandated by the supervisor.

Blockchain for Accounting and Auditing—Accounting and Auditing for Cryptocurrencies: A Systematic Literature Review and Future Research Directions

The aim of this study is to analyze and synthesize the key challenges that are prevalent in the application of blockchain in accounting and auditing, to study the approaches to account for cryptocurrencies, to study the effect of blockchain on the accounting and auditing profession, and to identify the current direction of research of blockchain in accounting and auditing, as well as identify potential avenues of future research. The research is based on 75 peer-reviewed academic studies on the topic of blockchain in accounting and auditing, followed by a descriptive and thematic analysis of the literature. Our results indicate that there is a need for more empirical studies to be carried out, which coincides with the notion of growing digitization and blockchain adoption in accounting and auditing. Based on our thematic analysis of the literature, we recommend that future research on blockchain in accounting and auditing should concentrate on the following specific areas: skills and education, governance, auditor independence, accounting standards and regulation, and the challenges faced by the accounting and auditing professions due to the adoption of blockchain technology.

Impact of an official accountability audit on industrial structure adjustment: a case study of environmental regulation in China

As a unique environmental regulation in China, the official accountability audit was piloted in 2014. With a focus on prioritizing the ecological environment, officials in pilot districts have implemented economic construction, adjusted industrial structures, and promoted coordinated development between the economy and environment. The effects of implementation have garnered widespread attention from society. However, there is limited research on the impact of an accountability audit on industrial structure adjustments. Using the “Accountability Audit of Officials for Natural Resource Assets (Trial)” released in 2015 as a quasi-natural experiment, this study collected panel data from 279 cities between 2013 and 2017. It then empirically analyzed the impact mechanism and effects of the accountability audit on industrial structure adjustment using the Propensity Score Matching and Difference-in-Differences model. The research findings indicate that the accountability audit directly impacted industrial structure adjustment, promoting the upgrading of the primary industry to the secondary industry and restricting the development of the tertiary industry. In addition, the audit is beneficial for enterprise entry, but not conducive to technological innovation, and has no significant impact on foreign direct investment. This conclusion fills a gap in the existing research and provides valuable insights for policymakers.

Can China’s leading officials’ accountability audit of natural resources policy promote corporate emissions reduction?

The Chinese government proposed the policy of the leading officials’ accountability audit of natural resources (AANR) in 2013 and launched pilot audits in some regions in 2014. In order to explore whether AANR reduces corporate environmental pollution, this paper validates the impact of AANR on corporate emission reduction using a multi-period difference-in-difference (DID) method based on a sample of Chinese A-share heavy-polluting corporations from 2010 to 2017. The results indicated that AANR can significantly reduce corporate pollutant emissions, with legitimacy pressures and resource dependence playing a mediating role. Further research found that the AANR promoted emission reduction more strongly for large-sized corporations and political connection corporations, and more significantly for corporations with higher internal and external governance levels. Policy effects were more significant in regions with favorable economic growth and legalization. The above findings verify the effect of government audits on micro corporation pollution management, enrich the theoretical system of AANR research, and provide meaningful empirical evidence for AANR's further improvement.

Accountability audit of natural resources and total factor productivity—Evidence based on Chinese listed companies

Based on a natural event, namely a pilot accountability audit of natural resources conducted by local officials in 2014, this study empirically investigates the impact of the pilot on the total factor productivity (TFP) of enterprises. The study utilizes the Differences-in-Differences model with an observation window spanning from 2012 to 2015. The findings indicate a significant reduction in the total factor productivity of enterprises in the pilot area due to the implementation of the pilot program. The study identifies that this impact is primarily driven by increased production costs and decreased investment. Further analysis reveals heterogeneity in the effects, with regions characterized by low levels of economic development, distortions in the production element market, low competition in industries, heavy asset-intensive industries, large enterprises, and absolute holding enterprises experiencing a more pronounced impact of the audit on total factor productivity. Overall, this study sheds light on the influence of accountability audits of natural resources on the real economy and offers valuable insights for policymakers.

AUDITING ACCOUNTING INFORMATION SYSTEMS TO DETECT AND PREVENT CASH FRAUD IN THE DIGITAL ERA

AUDITING ACCOUNTING INFORMATION SYSTEMS TO DETECT AND PREVENT CASH FRAUD IN THE DIGITAL ERA

AUDIT OF EDUCATIONAL PROGRAMES IN DOCTORAL STUDIES

The evaluation of the effectiveness implemen­tation doctoral programs has an informative demand among the beneficiaries of university education. As a rule, in practice, it is carried out by rating processing of scientific education programs, when the doctorate programs of the university are presented in the published ranking scales.
 The article argues, that this is not satisfactory to evaluate the effectiveness of the doctorate organiszing only in this way, and suggests to carry out accountability audit evaluations of on going doctoral programs.
 

Pengaruh Time Budget Pressure, Locus Of Conrol Dan Integritas Laporan Keuangan Terhadap Kualitas Audit Dengan Auditor Switching Sebagai Variabel Moderasi

Every company must present quality financial reports. One way to find out quality financial reports is through a public accountant audit, which measures the level of fairness of financial reports compared to accounting standards. What happens in a country, especially in a company amidst increasingly fierce competition. Companies strive to continue making reports such as financial and annual reports which contain profiles, management discussions and corporate governance (Siagian & Machdar, 2023). External auditors or public accountants are considered independent third parties who can prevent conflicts of interest between company management and shareholders. Apart from being used by companies and shareholders, audit results are also used by stakeholders outside the company such as potential investors, creditors, the government and other related parties. All of these parties consider audit results as an important factor in decision making (Wardani et al., 2020).

Audit, Fraud, and Forensic Accounting

First, the paper will define fraud and analyze a fraudulent accounting situation and the responsibilities of a forensic accountant. Then, the paper will examine and analyze an accounting fraud case involving a money laundering scheme involving a retired couple who own a business and their son. Lastly, the paper will offer insight into the differences between an accounting audit and a fraud examination of financial statements and recommendations on what current fraud model offers the best explanation for the actions of the fraudulent retired couple.

Whether the agricultural energy rebound offsets the governance effectiveness of the China's natural resource audit policy?

Due to the absence of a Chinese agricultural environmental trading market and the national government's "dual carbon" goal, government audit reform has been an important central government tool to ensure parallel economic and environmental performances and promote the green transformation of agriculture; however, in practice, the energy rebound effect may offset this effort. Based on panel data from 206 prefecture-level cities in China from 2011 to 2019, this study took China's leading official accountability audit of natural resources (LOAANR) pilot as a standard natural experiment to explore the policy effects and action paths of LOAANR on the agricultural direct energy rebound (DAER) and the indirect energy rebound (IAER), for which a spatial difference-in-difference (SDID) model was used. The results show that the LOAANR resulted in an agricultural energy rebound (AER) in the pilot cities and also had positive spillover on the AER in neighboring cities through demonstration, imitation, and training effects. It was also found that this effect was strongest in developed and agricultural non-focus cities. Finally, the mechanism test found that the LOAANR positively promoted AER in the pilot cities and negatively affected the AER in neighboring cities through agricultural energy efficiency (ATFEE). Therefore, several policy recommendations that can refine the LOAANR policy audit checklist and promote the green transformation of agriculture were presented.

The power from folk monitoring: Leading Officials’ Natural Resources Accountability Audit (NRAA) and corporate ESG performance

This paper investigates the impact of China's Leading Officials' Natural Resources Accountability Audit (NRAA) on corporate Environmental, Social, and Governance (ESG) performance, using its implementation as a quasi-natural experiment. Findings highlight the NRAA's positive effect on ESG performance, primarily driven by increased folk environmental monitoring (FEM). The impact is more evident in firms with higher institutional shareholdings, lower information asymmetry, and within regions with strong legal frameworks. These results align with the NRAA policy's objective of promoting sustainable development and addressing ecological concerns through its positive role in corporate ESG performance.

How to account for tax planning and its uncertainty in firm valuation?

I compare two approaches from the recent literature on how to account for tax planning and its uncertainty in a valuation framework [the separate view of Drake et al. (J Account Audit Financ 34(1):151–176, 2019) vs. the composite view of Jacob and Schütt (Eur Account Rev 29(3):409–435, 2020)], emphasizing measurement issues of tax planning and firm heterogeneity. Replication analyses and extensive robustness tests suggest that only considering tax planning and it’s uncertainty jointly and connecting them to firm value via income leads to consistent results, implying that higher uncertainty-adjusted tax planning amplifies the positive association between pre-tax income and firm value. However, the economic magnitude of this association depends on the measurement approach, ranging between 0.8 and 12.91%. Conversely, the separate view produces inconsistent results in all tests. These conclusions are not affected by incorporating recent losses (Dyreng et al. in Tax avoidance or recent losses? Working Paper, 2021) when an appropriate tax planning measure is chosen. While the results become insignificant when effective tax rates are used, applying the measure of Henry and Sansing (Rev Account Stud 23:1042–1070, 2018) mitigates this problem. Moreover, the positive value implication of uncertainty-adjusted tax planning is particularly pronounced for firms with low leverage whose debt tax shield and debt overhang are relatively small. The logic of jointly measuring tax planning and its uncertainty seems to be extendable to a variety of measures and to provide a more suitable measure than traditional isolated effective tax rates in a valuation framework.

Audit of Bank Lending Transactions Accounting when Applying International Standards

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

Can environmental regulations change the environmental behaviour of local leaders and enterprises? Evidence using the accountability audit of natural resources in China

ABSTRACT Securing long-term environmental pollution control in a system where local leaders in China hold tenure for only a short term is a challenge. The innovative Chinese accountability audit of natural resources (AANR) pilot project attempts to address this problem by mandating lifelong accountability for local leaders. Using this pilot as a quasi-natural experiment, we explored macro-effectiveness and micro-mechanisms of AANR. The results show that AANR has a positive impact on the environmental investment behaviour of enterprises. This paper finds that AANR stimulates enterprises’ investments in the environment by improving the environmental behaviour of local leaders. During mobilisation meetings, local leaders convey signals on environmental matters. Political connections are bridges which convey the signals of mobilisation to enterprises. Those enterprises receive the signals and increase environmental investment. AANR thus promotes collaborative governance by ensuring that the interests of key stakeholders are aligned to prevent pollution.