Effective Audit Research Articles

Agile Readiness Assessment of IT Audit Function at Indonesia’s State-Owned Bank

Recently, there has been increased interest in using Agile methodologies in auditing to improve efficiency and adaptability. This study examines whether Bank XYZ in Indonesia is ready to adopt Agile for IT auditing, marking a first for the country's banks. The need for Agile is driven by a significant reduction in audit staff, increased demands from management, and higher fraud risks, all of which call for a more effective and responsive audit process. The research employed both surveys based on the CA Agile Framework and qualitative analysis. It found that Bank XYZ is moderately ready to adopt Agile, showing strengths in commitment to user research, organizational culture, and training support. However, challenges such as utilizing past Agile experiences and enhancing governance must be addressed. The study recommends a gradual adoption of Agile, focusing on building a supportive Agile culture, enhancing training for auditors, and improving governance structures. This step-by-step approach will help Bank XYZ effectively integrate Agile into its IT auditing practices to better meet management's expectations for more business-focused auditing.

The Impact of Internal Audit Effectiveness, Risk Management Practices, and Organizational Culture on Financial Performance

The Impact of Internal Audit Effectiveness, Risk Management Practices, and Organizational Culture on Financial Performance

The Influence Of Servant Leadership And Auditor Competence On The Improvement Of Internal Audit Effectiveness With The Creation Of Risk Culture As An Intervening Variable In The Main Inspectorate Of BRIN

The Influence Of Servant Leadership And Auditor Competence On The Improvement Of Internal Audit Effectiveness With The Creation Of Risk Culture As An Intervening Variable In The Main Inspectorate Of BRIN

The Effect of Audit Fees and Auditor Professionalism on Audit Quality with Remote Auditing as A Mediating Variable (Empirical Study of Auditors in the Province of Banten 2022-2023)

The study aims to determine the effect audit fees and auditor professionalism on audit quality with remote auditing as a mediating variable. This research method uses quantitative methods. This research uses primary data by collecting data using a questionnaire. The sample of this research are auditors who work in Public Accounting Firms Banten Province. The sample technique used in this research is Purposive Sampling method with a total sample of 50 research data. The data analysis technique for this study used multiple regression analysis with Statistical Package For the Social Sciences Software (SPSS v27) and Path Analysis with the help of an online Spbel Calculator. The result of this study prove that audit fees have a significant positive effect on audit quality, auditor professionalism has a positive effect on audit quality, remote audits have a negative effect on audit quality, audit fees have a positive effect on remote audits, and auditor professionalism has a positive effect on remote audits. Behind that, remote audits are not able to act as a mediator on the effect of audit fees on audit quality. But, remote audits is able to act as a mediator on the effect of auditor professionalism on audit quality.

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.

Key drivers of cybersecurity audit effectiveness: A neo‐institutional perspective

The aim of this paper is to analyse which factors explain the effectiveness of internal audit in providing assurance about cybersecurity risk management. On the basis of neo‐institutional theory, we hypothesize that coercive (cybersecurity regulation), normative (professionalization of internal auditors and Boards) and mimetic forces (outsourcing of cyber security assurance services) positively contribute to cybersecurity audit (CSA) effectiveness. As these forces do not come about in an interest free model, we study the role of and the interaction with other actors who shape the CSA practices—Boards and security experts. We hypothesize that Board's support to CSA and the level of internal auditors' cooperation with the first and the second line of defence positively affect CSA effectiveness. To test our hypothesis, we conducted a survey involving IT auditors and Chief Audit Executives from various industries, organizations of different sizes and countries. We examined the hypothesized relationships in a series of regression analyses. We find that normative forces (professionalization of the internal auditors and Boards' competences), Board's support to CSA and cooperation between the internal audit function (IAF) and the first two line of defence significantly explain the CSA effectiveness. We find no support for the effect of regulation as a coercive force and outsourcing as a mimetic force. We discuss potential reasons for our findings and their implications. The paper is an original analysis that advances our understanding of key drivers of CSA effectiveness and their relationships.

Integrated predictive analytics in IT audit planning

This review explores the integration of predictive analytics in IT audit planning, emphasizing its transformative potential in enhancing the efficiency and effectiveness of audit processes. Predictive analytics, which involves the use of machine learning, data mining, and statistical modeling to forecast future events based on historical data, has seen widespread adoption across various industries. In the context of IT audit planning, its application can significantly improve risk assessment, resource allocation, and overall audit execution. The study begins by defining predictive analytics and outlining its key techniques. It then provides an overview of the traditional IT audit planning process, highlighting its critical steps and inherent challenges, such as limited risk visibility and inefficient resource use. By integrating predictive analytics, organizations can address these challenges by leveraging data-driven insights to identify emerging risks, prioritize audit areas, and optimize audit schedules. The integration process involves several stages, including data collection and preparation, model development, and implementation. The review discusses the importance of selecting appropriate data sources, cleaning and preprocessing data, and choosing the right predictive models. It also covers the deployment of these models within existing IT audit frameworks, emphasizing the role of advanced tools and technologies. The benefits of integrated predictive analytics are manifold. Enhanced risk assessment allows auditors to proactively identify and mitigate potential issues, while improved resource allocation ensures that audit efforts are focused on the most critical areas. Additionally, predictive analytics can detect anomalies and patterns that might go unnoticed in traditional audits, thereby increasing audit effectiveness. Case studies of successful implementations in various organizations are presented to illustrate the practical benefits and outcomes of integrating predictive analytics into IT audit planning. The review also addresses potential challenges, such as data quality issues, model accuracy, and organizational resistance, offering strategies to overcome these hurdles. The integration of predictive analytics in IT audit planning represents a significant advancement in audit practices. By adopting these techniques, organizations can enhance their audit capabilities, leading to more proactive and effective risk management. The review provides recommendations for implementation and highlights future trends in predictive analytics and IT auditing. Keywords: Integrated, Predictive Analytics, IT, Aduit Planning.

Digital Transformation, Emotional Intelligence, and Organizational Culture Toward Internal Audit Quality: Conceptual Framework

This paper investigates the interplay between digital transformation, emotional intelligence (EI), and internal auditing quality within Saudi public institutions, with a focus on the mediating role of EI and the moderating role of organizational culture. The advent of digital transformation has significantly influenced internal auditing practices, necessitating an adaptation to new technologies and methodologies. Emotional intelligence is identified as a crucial factor in enabling audit teams to effectively manage the challenges and opportunities presented by digital transformation, enhancing communication, decision-making, and adaptability. Organizational culture further influences this relationship by providing a supportive environment that facilitates the adoption of digital innovations and the development of EI among audit personnel. The findings suggest that a synergistic approach, incorporating digital transformation initiatives with the development of EI and fostering a conducive organizational culture, can significantly enhance the quality and effectiveness of internal auditing in Saudi public institutions. This study contributes to the understanding of how digital transformation, EI, and organizational culture interact to improve internal auditing practices, offering valuable insights for policymakers and practitioners aiming to optimize internal audit functions in the face of ongoing digital advancements.

How to Design Effective Audit and Feedback Interventions With Nurses: A Set of Hypotheses Based on Qualitative and Quantitative Evidence.

To propose practical hypotheses on audit and feedback that support the effectiveness with nurses. Audit and feedback interventions have been mainly studied with physicians; however, the processes have been practiced by nurses for years. Nurses' response may differ from that of physicians and other healthcare disciplines because of their roles, power, and the configuration of nursing activities. A comparative analysis of the Clinical Performance Feedback Intervention Theory was conducted using nursing-specific empirical data from: 1) a mixed-methods systematic review and 2) a pilot study of audit and feedback with a team of primary care nurses. Researchers hypothesize that audit and feedback interventions are more effective when: 1) feedback emphasizes how it relates to the relational aspect of nursing; 2) indicators are measured and reported at team level; and 3) feedback is provided in a way that highlights benefits to nurses' practice, such as the potential to reduce workload. These proposed hypotheses provide concrete guidance to researchers and managers for an effective use of audit and feedback as a quality improvement strategy with nurses.

Strategies for Integrated Audits to Ensure Control, Risk Management, and Ethical Practices

The purpose of this study is to examine the role of integrated audits in organizational governance and ethical practices. Through a systematic literature review, the research design entails identifying relevant academic journals, industry reports, and scholarly publications related to integrated audits, organizational governance, and audit effectiveness. The selected literature will be critically evaluated to identify key themes, trends, and theoretical frameworks, with thematic analysis used to uncover recurring patterns. The findings reveal that integrated audits play a pivotal role in fortifying organizational resilience, promoting sustainable business practices, and enhancing stakeholder trust. From a strategic management perspective, integrated audits provide valuable insights for decision-making and resource allocation, while ethically, they foster a culture of accountability and transparency. The integration of emerging technologies such as artificial intelligence and blockchain further enhances audit effectiveness. The implications of this research underscore the need for organizations to embrace integrated audits as a strategic imperative for enhancing governance, risk management, and ethical practices. This study contributes to the advancement of knowledge in the field of integrated audits and informs organizational practices in navigating the complexities of the modern business landscape.

Sistem Informasi Manajemen Audit Trio Motor Banjarmasin (Studi Kasus : General Affair)

The study discusses the development of the Audit Management Information System (SIMA) at PT. Trio Motor, a company selling cars and motorcycles, also serving as the Main Dealer for Honda motorcycles in South Kalimantan and Central Kalimantan. SIMA addresses branch separation and reduces fraud in audits. Its goal is to streamline data collection, storage, analysis, and enhance planning, execution, and reporting efficiency. The research formulates design, creation, and implementation issues of SIMA for spare part audits. SIMA scans real-time part numbers, shelf locations, generates H3 format reports, and conducts synchronized warehouse audits. It aims to design, create, and utilize SIMA as a spare parts audit tool. The benefit lies in improving spare parts stock opname data collection. SIMA uses UML for database design, SQLServer for storage, and is developed with codeigniter 3 and bootstrap. It offers user access levels: Super Admin, Auditor Manager, Auditor, General Affairs, and Warehouse. Recommendations suggest ongoing development for complexity, features, and regular maintenance to prevent bugs. This research is crucial in aiding PT. Trio Motor's Audit Division for efficient and effective spare parts audits, reducing fraud risk.

Determinants of Tax Audit Effectiveness in Ghana

Determinants of Tax Audit Effectiveness in Ghana

PENGARUH AUDIT INTERNAL TERHADAP PENGENDALIAN INTERNAL PENJUALAN PADA PERUSAHAAN AIR MINUM DI KOTA BANDUNG

Internal Audit is a series of processes and technical personnel within a company that confirms the accuracy of financial information and activity procedures according to regulations. The purpose of this study was to determine internal audit control and sales control and to determine the effect of internal audit on internal sales control in the regional public company PT X, Bandung City. Internal audit also provides very objective information regarding the accuracy of sales data which will become the basis for management decision making. Sampling using purposive sampling. Collecting data using literature study, questionnaires. For data analysis techniques using validity test, reliability test, data normality test, Spearman rank correlation analysis. Simple linear regression analysis, Determination Coefficient Test, t test. The results showed that internal audit had a significant effect on internal control of sales at the public company in the PT X area, Bandung City.

The impact of risk management implementation on the effectiveness of SAI’s internal audit function

Internal audits play an important role in monitoring the achievement of organizational objectives. However, research on the factors influencing the success of internal audits remains limited. This study aims to investigate the effectiveness of BPK’s Itama (The Inspectorate General of the Audit Board of the Republic of Indonesia) functions, hypothesized to be influenced by risk management policy implementation. This study employs quantitative methods; data were collected via surveys and analyzed using structural equation modeling (SEM) to test theory-based hypotheses. Results reveal a significant positive correlation between risk management policy implementation and the effective functioning of Itama. Additionally, the study identifies key factors determining the success of risk management policy implementation: economic, social, and political conditions. Therefore, internal auditors of supreme audit institutions must consider these external factors when implementing risk management policies. This study contributes to understanding internal audit effectiveness by highlighting the impact of external economic, social, and political conditions.

TAX COMPLIANCE CONTROL AND AUDIT OF TRANSFER PRICING TRANSACTIONS

The article presents the authors' vision of the features and mechanism of tax compliance control and audit in the management of transfer pricing operations. Effective interaction between business entities and tax authorities in the process of controlling and auditing transfer pricing transactions should be based on the principles of compliance with the help of two tools – assessment of the quality of transfer pricing policy and internal control system (as a result of interaction of internal and external control systems) and assessment of the quality and effectiveness of internal audit of transfer pricing (as a result of interaction of internal control and audit systems). In accordance with the above, tax compliance control and audit becomes a new element of the established system of monitoring of controlled transactions of a business entity, which proposed to understand as the use of tools to confirm the quality and effectiveness of internal control and audit systems of transfer pricing transactions of a business entity by a tax authority, which certifies the taxpayer's commitment and responsibility to comply with tax legislation in terms of compliance with the arm's length principle. Confirmation by the tax authorities of the quality of the transfer pricing policy and internal control and audit system of the entity should be based on the developed, tested and approved system of assessment parameters. Confirmation of the assessment of the quality of the transfer pricing policy and internal control system will demonstrate the responsible position of the taxpayer based on tax compliance with the transfer pricing legislation in accordance with the arm's length principle and will increase the level of trust in it on the part of the tax authorities. In turn, the introduction of such a tool as an internal transfer pricing audit quality assessment into the process of monitoring-controlled transactions will allow the company to submit and use the results of its internal audit in assessing transfer pricing risks to form its tax rating and assess the need to include it in the audit plan. This tool assumes that the internal audit system is sufficient to timely detect violations of tax legislation in the field of transfer pricing in accordance with the arm's length principle.

Ownership Structure and Financial Reporting Quality of Listed Non Financial Firms in Nigerian: The Moderating Role of Audit Committee

The aim of this study is to evaluate the moderating role of audit committee on the relationship between ownership structure and financial reporting quality of listed non-financial firms in Nigeria. The study used annual reports from 41 listed non-financial firms in Nigeria between 2010 to 2021 period. The study used causal research design approach. The analysis was done using descriptive statistics and multiple regression technique using Generalised Method of Moment (GMM). The findings of the study show that there is significant relationship between ownership structure and financial reporting quality and audit committee can effectively moderate their relationship. The study therefore, rejects all the null hypotheses formulated. The implications of the study are that regulators and policy makers, may encourage more shareholders representation in audit committee of listed companies and mandate financial expertise to all audit committee members. The study concludes that presence of institutional, managerial and foreign ownerships as well as sound audit committee are important for improving firms' financial reporting quality. The study therefore, recommends that in order to enhance the reporting quality, management of listed non-financial firms in Nigeria should ensure that they have effective and functional audit committee. The ownership structure should also be strengthened in order to assist in improving financial reporting quality and also improve relevance and reliability of annual reports and make it easier for the stakeholders to make appropriate decisions relevant to their needs.

Influence of Management Input on Effectiveness of Saccos Internal Audit in Western Kenya

Purpose: Examination of management input on effectiveness of Saccos internal audit in Western Kenya. Methodology/Approach: Employing causal design for cause and effect association, a target of 129 staffs in 15 DT-SACCOS was identified of which stratified sampling led to 97. Researcher designed structured questions in questionnaire that formed basis for data gathering. Findings: Results indicated that management input had a significant effect on effectiveness of Saccos internal audit in Western Kenya as indicated by p value and t values. Implications: The study recommended that the management should enhance their input by availing finances on time. This basically improves performance of Saccos.

The Effect of Internal Audit, Whistleblowing System and Surprise Audit on Fraud Prevention at BRI Regional Audit Office Bandung

The Effect of Internal Audit, Whistleblowing System and Surprise Audit on Fraud Prevention at BRI Regional Audit Office Bandung

Pengaruh Penerapan Remote Audit pada Kualitas Audit Internal Pasca Pandemi Covid-19

Despite the challenges encountered in the field, audit quality within the scope of internal audit remains a top priority. The study outlines the ways in how remote audits impact audit quality and the approaches implemented by internal auditors to enhance audit quality. Examining the effect of remote auditing on audit quality is appropriate given the COVID-19 pandemic. This combination of auditor competence and time budget pressure to moderate the effect of remote audits on internal audit quality are also addressed in this study. Survey data is used in this study to measure how far APIP in East Java Province began using remote auditing after the epidemic. SmartPLS is used in the analytical method combined with the Structural Equation Modeling (SEM) model such as reliability and convergent validity test, discriminant validity test and PLS path algorithm and bootstrapping test. The research questionnaire's are measured using a Likert scale (1-7). Remote audits have a positive effect on improving internal audit quality, according to the result of a survey conducted towards 76 out of 100 internal auditors. But auditor competence and time budget pressure does not significantly moderate such a relationship. The research's conclusions have significance for practitioners looking to improve audit quality in remote audits and may benefit users of financial reports to comprehend the level of audit quality in remote audits

Tax Audit and Tax Compliance, Does Religiosity Moderate?

The purpose of this paper was to investigate the impact of tax audit on tax compliance and examine the moderating effect of religiosity on the associations between tax audit and tax compliance in Pakistan. In this study, 400 questionnaires were distributed by using convenience sampling to actual as well as potential taxpayers of Pakistan, after which a total of 247 useable questionnaires were deemed suitable for analysis. Partial least squares structural equation modelling (PLS SEM) was devised using SmartPLS 3 to validate the measurement model and structural model and the predictive relevance of the study’s model. The findings showed that tax audit was positively associated with the level of tax compliance. They also demonstrated significant moderating effect of religiosity on the relationship between tax audit and tax compliance. Tax authorities and policymakers in developing majority societies in developing countries and in other South Asian countries, especially in Pakistan may use the results to focus their interest on the formulation of policies founded on the outcomes of the study to strengthen revenue collection. This study extended the deterrence theory in the context of tax compliance by studying the effect of tax audit on tax compliance as well as the proposed moderating effect of religiosity in the purview of deterrence theory on tax compliance. The study explored the said relationships among actual as well as potential taxpayers in socio-cultural context of Pakistan. Moreover, the suitability for the use of PLS-SEM as a statistical tool in investigating the above-mentioned relationships was also discussed.