Effective Audit Research Articles

Bio-Rollup: a new privacy protection solution for biometrics based on two-layer scalability-focused blockchain.

The increased use of artificial intelligence generated content (AIGC) among vast user populations has heightened the risk of private data leaks. Effective auditing and regulation remain challenging, further compounding the risks associated with the leaks involving model parameters and user data. Blockchain technology, renowned for its decentralized consensus mechanism and tamper-resistant properties, is emerging as an ideal tool for documenting, auditing, and analyzing the behaviors of all stakeholders in machine learning as a service (MLaaS). This study centers on biometric recognition systems, addressing pressing privacy and security concerns through innovative endeavors. We conducted experiments to analyze six distinct deep neural networks, leveraging a dataset quality metric grounded in the query output space to quantify the value of the transfer datasets. This analysis revealed the impact of imbalanced datasets on training accuracy, thereby bolstering the system's capacity to detect model data thefts. Furthermore, we designed and implemented a novel Bio-Rollup scheme, seamlessly integrating technologies such as certificate authority, blockchain layer two scaling, and zero-knowledge proofs. This innovative scheme facilitates lightweight auditing through Merkle proofs, enhancing efficiency while minimizing blockchain storage requirements. Compared to the baseline approach, Bio-Rollup restores the integrity of the biometric system and simplifies deployment procedures. It effectively prevents unauthorized use through certificate authorization and zero-knowledge proofs, thus safeguarding user privacy and offering a passive defense against model stealing attacks.

Determinants of Internal Audit Effectiveness in Local Government Authorities (LGAs): Evidence from Morogoro Region of Tanzania

This study examines the determinants of internal audit effectiveness in Local Government Authorities (LGAs), addressing the growing importance of robust Internal Audit Function (IAF) in public sector governance. The study employed the descriptive research design based on a mixed research approach integrating both qualitative and quantitative approaches. Data were collected from 45 purposively selected respondents with extensive auditing experience. A multiple linear regression model was used to assess the impact of these factors on internal audit effectiveness. The empirical results indicate that the four factors account for 65.7% of the variance in internal audit effectiveness, with IT utilization being the most significant contributor (R² = 0.657, Adjusted R² = 0.616). The ANOVA results further validate the model, showing a statistically significant F-statistic of 3.2976 with a p-value of 0.001, indicating the robustness of the findings. Top management support was found to be critical in fostering a culture of accountability, while the independence of internal audit ensures objectivity and unbiased assessments. IT utilization was identified as a key driver in enhancing the efficiency and reliability of audit processes. Finally, the competence of internal auditors was shown to significantly influence the quality and accuracy of audit outcomes. The study recommends the need for institutionalizing top management support, safeguarding auditor independence, advancing IT utilization, and promoting continuous professional development for auditors. These measures are essential for improving governance and accountability within LGAs, thereby contributing to more effective and reliable internal audit practices.

Pengaruh Kompetensi dan Independensi Terhadap Efektivitas Audit Internal Serta Dampaknya pada Tata Kelola Pemerintah yang Baik: Studi Pada Inspektorat Kota Gorontalo

This research aims to determine the influence of competency and independence on the effectiveness of internal audit and its impact on good government governance (Study at the Gorontalo City Inspectorate). The type of method used in this research is a quantitative method with data collection techniques using primary data. The number of samples in this research is 56 samples in 2020-2022. The tool used in this research uses Path Analysis.The results of this research show that competence and independence have a positive and significant effect on the effectiveness of internal audit through good government governance.

MEDIATING EFFECT OF INTERNAL AUDITORS’ ETHICAL CONDUCT ON THE RELATIONSHIP BETWEEN USAGE OF INFORMATION TECHNOLOGY, MANAGEMENT SUPPORT FOR INTERNAL AUDIT DEPARTMENT, AND INTERNAL AUDIT EFFECTIVENESS: A CONCEPTUAL FRAMEWORK

Low level of internal audit effectiveness is practically increasing in the Nigerian ministries, department, and agencies. In proffering solution to this lingering issue, this present study proposed a framework to examine the degree of effectiveness of internal audit functions in Kano state, Nigeria MDAs. The proposed framework is motivated by agency theory with the mediating effect of auditor’s ethical conduct. This present study extends the already extant body of knowledge in the area of internal audit effectiveness by expanding agency theory with the mediating effect of auditor’s ethical conduct. Also, this study has implication to support management, shareholders and other policy makers in addressing ineffectiveness and corrupt practices in the Nigerian MDAs. If this framework is authenticated, it would provide more evocative insight on the extends of internal audit effectiveness in Kano Nigerian MDAs, the legislators and government official would benefit greatly from this study if eventually concluded as it would assist MDAs to enhance internal audit effectiveness and curb corruption. In the subsequent studies the proposed framework will be empirically tested through data collection and analysis of relevant data.

The interplay of corporate governance, internal audit effectiveness, and sustainable financial reporting quality in Tanzanian commercial banks

The interplay of corporate governance, internal audit effectiveness, and sustainable financial reporting quality in Tanzanian commercial banks

Internal Auditors’ Characteristics, Internal Audit Effectiveness, and Enterprise Risk Management in Jordan: A Resource-Based View

Jordanian public-listed companies (PLCs) face significant internal, external pressures and risks that hinder their performance and survival in today’s high-risk business environment. The relatively recent implementation of Enterprise Risk Management (ERM) adds to its ineffectiveness, further complicating the situation. This study aims to examine the impact of internal auditors' characteristics on ERM effectiveness and internal audit effectiveness (IAE) from the Resource-Based View (RBV) perspective. Additionally, it explores the relationship between IAE and ERM effectiveness, as well as the mediating role of IAE. A quantitative cross-sectional research design was utilised, collecting data from Jordanian PLCs via questionnaires, with 119 final responses analysed using SPSS and SmartPLS softwares. The findings indicate that internal auditors' characteristics positively impact both ERM effectiveness and IAE. Furthermore, IAE positively impacts ERM effectiveness and serves as a partial mediator in this relationship. These results align with the RBV, highlighting that internal auditors' characteristics and IAE as valuable internal resources that foster sustainable competitive advantage. Practical implications include raising companies' awareness of the critical importance of internal auditors' characteristics and IAE, thereby offering a cost-effective solution to enhance ERM effectiveness.

PENGARUH FAKTOR-FAKTOR KEUANGAN TERHADAP AUDIT REPORT LAG PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA

The increasing number of companies in the form of Go Public is a sign that the development of activities on the Indonesia Stock Exchange (IDX) is increasing, this will trigger a high demand for effective and efficient financial statement audits. Companies that have gone public have an obligation to submit financial reports in a timely manner. Delays in submitting financial reports are caused by audit report lag. Financial factors such as company size, profitability, leverage, liquidity, earnings per share, and financial distress are indicated to be the cause of audit report lag. So that these financial factors require special attention so that the submission of audited financial reports is timely. This study aims to determine the effect of company size, profitability, leverage, liquidity, earning per share, and financial distress on audit report lag in manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the period 2020-2022. The population in this study are all manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the period 2020-2022. The sampling technique in this study used purposive sampling method, so that a sample of 86 companies was obtained with a total of 217 observations. The results showed that company size and profitability had a significant negative effect on audit report lag, leverage and liquidity had no effect on audit report lag, and earning per share and financial distress had a significant positive effect on audit report lag

Sampling targets to assess occupational health in occupational health and safety management system audits: a mixed-methods research in Japan.

Occupational health and safety management systems (OHSMS) are the foundation of occupational health and safety activities within an organization. An important element of these systems is audits. However, OHSMS auditors often lack confidence in conducting occupational health audits compared with their proficiency in conducting occupational safety audits. For occupational health to be effectively managed by OHSMS, the sampling competence of auditors engaged in third-party audits should be improved. Therefore, we conducted this study to identify appropriate sampling targets for occupational health related to International Organization for Standardization (ISO) 45001. We adopted a mixed methods approach to identify appropriate sampling targets. This involved conducting focus group discussions with experts in occupational health and performing systematic text condensation analysis. The validity of our findings was further reinforced through confirmation by external auditors who specialize in ISO 45001. In the qualitative phase, 6 occupational health sampling targets were identified, and of these, 5 were subsequently validated in the quantitative phase: (1) Health issues, legal requirements, and occupational health goals identified by the organization; (2) Occupational health risk assessment and control processes; (3) Processes related to occupational health and documented information showing the results of efforts; (4) Organizational roles and functions of occupational health professionals and opportunities for their professional development; and (5) Processes to ensure commitment to occupational health issues and objectives. To ensure effective and comprehensive occupational health audits, auditors should review these targets. This study will enhance the competence of auditors by identifying appropriate occupational health sampling targets.

Enhancing The Excellence of Quality Management System Auditors: A Competency-Based Training Model with Instructional Design Strategic Approaches and Measurable Outcomes

The development and implementation of a competency-based training model for Quality Management System (QMS) auditors are crucial for enhancing audit quality and organizational performance. This study identifies and addresses gaps in current auditor training programs through a structured approach that includes clear instructional goals, effective assessment tools, and robust instructional strategies. The research utilizes Training Needs Analysis (TNA) data and aligns training objectives with industry expectations through Occupational Standards and Competency Standards. Learning outcomes are formulated using the ABCD method (Audience, Behaviour, Condition, Degree) to ensure clarity, measurability, and achievability. The training program employs Outcome-Based Learning and Teaching (OBLT) methodologies, ensuring that the focus remains on achieving specific competencies. Self-assessment based on competency standards encourages reflective learning and self-improvement, while competency-based assessments measure the effectiveness of the training and the skills acquired by participants. The program culminates in the awarding of Micro Credentials and Certificates of Competency, which are traceable to national and international standards, thereby validating the skills and knowledge gained. Through rigorous testing and evaluation involving experts, educators, and participants, the study refines the training model to ensure its effectiveness and relevance. The findings indicate that the competency-based training model significantly improves the skills and performance of QMS auditors, leading to more effective audits and continuous quality improvement within organizations. This research contributes to the field by providing a comprehensive, evidence-based approach to developing high-quality training programs for QMS auditors.

PENGARUH PEMERIKSAAN PAJAK, JUMLAH PENGUSAHA KENA PAJAK DAN PENAGIHAN PAJAK TERHADAP PENERIMAAN PAJAK PERTAMBAHAN NILAI

This study aims to analyze the effect of tax audits, the number of taxable entrepreneurs and tax collection on value-added tax revenue, case studies at KPP Pratama Kuningan and KPP Pratama Cirebon Satu. The population in this study is tax audit data, the number of taxable entrepreneurs, tax collection and value-added tax revenue at KPP Pratama Kuningan and KPP Pratama Cirebon Satu 2018-2022 per month totaling 60 months at each KPP. The sampling used in this study used a saturated sample where all populations were used as samples. This study used multiple linear regression method. Statistical testing using SPSS Version 23. The results showed that the results of simultaneous tests of Tax Audit, Number of Taxable Entrepreneurs and Tax Collection had a significant effect on Value Added Tax Revenue. As for the partial test results of the Tax Audit variables, the Number of Taxable Entrepreneurs and Tax Collection have a positive and significant effect on Value Added Tax Revenue. Keywords : Tax Audit, Number of Taxable Entrepreneurs, Tax Collection, Value Added Tax Revenue.

How External Auditors Evaluate Internal Audit Effectiveness: An Experimental Study of the Case of Jordan

How External Auditors Evaluate Internal Audit Effectiveness: An Experimental Study of the Case of Jordan

Exploring the dynamics of internal audit effectiveness: Unravelling the mediating effect of internal auditors’ ethical conduct

The research investigates the dynamics of internal audit effectiveness and the mediating effect of internal auditors’ ethical conduct. The impact of internal auditors' ethical conduct on the management's support for the internal audit department and the effective internal control system monitoring is examined, extending the ideas of the agency and policeman theories. One hundred sixty-six responses from the chief and deputy chief internal auditors of Kano state MDAs were used as a sample group in this quantitative study, and they included cross-sectional and correlational methods. Partial Least Squares Structural Equation Modelling (PLS-SEM) was used to analyze the sample data. The internal auditors' ethical conduct served as a mediator in the internal audit effectiveness model, as supported by the data. The study failed to support the previous findings regarding the direct effects of management support for internal audit departments and effective monitoring of internal control systems on internal audit effectiveness. Still, the results validated the hypothesis that the mediating effect of internal auditors’ ethical conduct on the effectiveness of internal audits on all predictors. The analysis confirmed that conducting internal audits should be a strategic priority for professional associations and legislators.

The Influence Of Audit Fee, Audit Rotation, Audit Tenure, Company Size, Auditor Specialization And Auditor Reputation On Audit Quality In Manufacturing Companies Listed On The Indonesian Stock Exchange In 2020-2022

The aim of this research is to determine the influence of Audit Fees, Audit Rotation, Audit Tenure, Company Size, Auditor Specialization and Auditor Reputation on Audit Quality in manufacturing companies listed on the Indonesia Stock Exchange in 2020-2022. The method used in this research is quantitative associative method, using secondary data. Based on the research results, it shows that Audit Fees, Audit Tenure and Auditor Specialization partially have no effect on Audit Quality. This shows that audit fees are low and competitive for auditors without reducing auditor quality standards. Audit quality is maintained even though there are changes in the Audit Tenure period. Auditor specialization is reduced, but there is increased training, application of audit standards and use of technology in maintaining effective Audit Quality. Company size partially has a positive and significant effect on Audit Quality. This shows that the auditor has sufficient expertise to handle the high complexity of a large company size, thus providing support for increasing audit quality. Audit Rotation and Auditor Reputation partially have a negative and significant effect on Audit Quality. This shows that a decrease in the frequency of Auditor Rotation can result in a decrease in their objectivity and independence, but auditors have a high perspective and long-term relationship to improve Audit Quality. A decline in auditor reputation can reduce public trust and auditor credibility, but implementing audit standards, strengthening policies and procedures and effective supervision can play a transparent role in maintaining integrity and professionalism by assessing and improving high audit quality standards. Audit Fees, Audit Rotation, Audit Tenure, Company Size, Auditor Specialization and Auditor Reputation simultaneously have a positive and significant effect on Audit Quality. This shows that Audit Fees can ensure auditors work well, Audit Rotation can reduce the risk of fraud, Optimal Audit Tenure does not lose objectivity, Company Size provides resources for comprehensive audits, Auditor Specialization adds value with special skills, Auditor Reputation adds trust and contribute to improving Audit Quality in Manufacturing Companies listed on the Indonesia Stock Exchange in 2020–2022.

The effect of internal audit planning on risk factors: evidence from Yemen’s banks

This study aims to determine the extension of implicating risk factors in strategic planning for internal audit in Yemeni commercial banks, including inherent risk factors and control risks, whether caused by internal or external influences, and focuses on the strategic purpose of internal audit. A questionnaire instrument, specifically designed for this research purposes, was distributed to 58 respondents comprising internal auditors of commercial banks, as well as auditors of the External Control Department of the Central Bank of Yemen. The study determines whether Yemeni commercial banks include internal auditing in their operational structure. It also determines the risks that internal auditors prioritize while developing their internal audit strategies. This study uses Smart PLS methodologies to evaluate the hypotheses through data analysis. The results indicate that internal audit is considered one of the important operational activities in the structure of commercial banks of Yemen, and that the planning process for internal audit largely takes into account the inherent risk factors and control risk factors, whether the audit process is carried out by internal auditors or auditors of Central Bank of Yemen. AcknowledgmentThe authors extend their appreciation to the Deanship of Scientific Research at King Khalid University for funding this work through a large-group Research Project under grant number (RGP.2/131/45)”.

The Influence of Internal Audit Effectiveness, Top Management Supervision, Accounting Information Technology, to Prevent Fraud in Financial Reports of Palm Oil Plantation Companies in Remote Areas as a Moderating Variable (Survey of Palm Oil Plantation Companies in Indonesia)

The Influence of Internal Audit Effectiveness, Top Management Supervision, Accounting Information Technology, to Prevent Fraud in Financial Reports of Palm Oil Plantation Companies in Remote Areas as a Moderating Variable (Survey of Palm Oil Plantation Companies in Indonesia)

The Impact of Ownership Structure on Tax Avoidance: Audit Quality ss Moderating Variable

Purpose: This research is aimed at giving empirical evidence related to the correlation of ownership and corporate tax avoidance as well as describing the moderating effect of audit quality.Method: The sample comprises 315 observations from manufacturing companies listed on the IDX (Indonesia Stock Exchange) during the period of 2015-2019. For data analysis, panel data regression techniques were employed to ascertain the effect of ownership on tax avoidance moderated by audit quality.Findings: The results indicated that institutional, family, and foreign ownership were positively related to corporate tax avoidance. Nevertheless, the effect of audit quality was found to moderate the correlation of family and foreign ownership to tax avoidance. Originality/Value: This research contributed fresh evidence that elevated external audit quality held a moderating effect on tax avoidance in family-owned companies and those under foreign ownership.

THE IMPACT OF LEADERSHIP ON AUDIT EFFECTIVENESS

THE IMPACT OF LEADERSHIP ON AUDIT EFFECTIVENESS

Audit Tenure Sebagai Moderasi Fee Audit dan Ukuran Perusahaan Terhadap Kualitas Audit

Apart from being required to comply with the code of ethics, auditors must also understand client requests. In their involvement with the company, auditors will relate to the audit fees received, the audit period which has an impact on the quality of the resulting audit. This study aims to investigate the impact of audit fees, audit tenure, and audit rotation on audit quality in companies listed on the Indonesia Stock Exchange LQ45 Index from 2020 to 2022. The study employs quantitative data from secondary sources, utilizing documentation as the primary data collection technique. Data analysis is conducted through logistic regression test techniques, with totaling 69 samples. The results show that audit fees have a negative effect on audit quality, while company size has no effect on audit quality. Audit tenure can moderate the effect of audit fees on audit quality, but cannot moderate the effect of company size on audit quality. The discussion further explores the implications of these findings on auditing practices, potential areas for improvement, and considerations for regulatory frameworks.

Empowering Auditors to Pursue Fraud during Evidence Evaluation

SYNOPSIS Auditors struggle to respond skeptically to fraud, diminishing audit quality. This problem is particularly prevalent during the evidence evaluation phase of the audit, when auditors perceive intense time constraints. Theory suggests that employees who feel empowered overcome constraints and produce higher quality work. We predict and find support for our empowerment theory-driven judgment model. Specifically, as auditors in the evidence evaluation phase feel more empowered, they assess fraud risk higher when fraud is present, leading them to indicate a greater need for more work and, ultimately, recommend more effective audit procedures. In further support for our theory, we find that as auditors feel more empowered, they perceive audit constraints as less restrictive. Regulators advocate for increased auditor vigilance against fraud, and this study contributes to research and practice by identifying an audit management strategy—empowerment—that successfully improves auditors’ fraud pursuit during evidence evaluation.

The Effect of E-Commerce, Tax, Supervision, and Tax Audit on Value-Added Tax Revenue (Case Study on Kudus Regency Taxpayers)

Internet technology has a huge influence on the world economy. More economic activities are carried out using internet media. Seeing the potential for the development of e-commerce has made business people dive into the digital world. The explosion of e-commerce is about the attraction of the business world and the state represented by the tax authorities, in this case, the Directorate General of Taxes, Central Java Regional Office in Kudus Regency. In line with the government's proposal to tax e-commerce as a source of state revenue and expenditure, awareness of the important role of e-commerce in the current digital-based business environment requires collaboration between relevant stakeholders to strive for a climate and mechanisms that encourage the development and growth of e-commerce, trade and protect the activities that take place therein. This research used a questionnaire on 185 Kudus district taxpayers registered on the marketplace using 25 SPSS data analysis. E-commerce is proven to have an influence on value-added tax revenue. Tax supervision has been proven to have an influence on Value Added Tax Revenue. The audit proved that taxes have a positive effect on value-added tax revenues. The research results show that all variables used have a positive effect on value-added tax revenues.