Audit Function Research Articles

Analysis of Integrated Audit Approach in Auditing Sustainable Energy Development Programs in State-Owned Enterprises

This research examines the use of the Integrated Audit Approach in auditing National Program 6, Sustainable Energy Development, on State-Owned Enterprises (SOEs) by AKN VII of the Audit Board of the Republic of Indonesia. Sustainable energy development, focused on renewable energy and energy efficiency, is a key priority in the 2020–2024 Medium-Term National Development Plan. Given SOEs' significant role in implementing this program, auditing their performance and governance is essential to achieving national strategic goals. The Integrated Audit Approach addresses limitations of traditional audits, such as restricted coverage and less strategic recommendations, by combining financial, compliance, and performance audits. This comprehensive method yields more in-depth and sustainable recommendations. The research uses a qualitative, descriptive-exploratory approach, gathering data through interviews with Audit Board auditors and reviews of internal reports and documents. Findings indicate that the integrated audit approach enhances SOEs' audit quality by delivering more strategic and relevant recommendations, particularly in sustainable energy governance. This study aims to advance audit theory and practice within the Audit Board, contributing to improved governance and performance of SOEs.

THE ROLE OF INTERNAL AUDIT FUNCTION IN ENHANCING RISK MANAGEMENT

This study explored the role of internal audit in enhancing risk management, focusing on banks. It aimed to assess internal audit effectiveness, monitoring processes, and risk management. The research posed questions on the effectiveness of internal audits and monitoring processes, and the extent of risk management's effectiveness using questionnaire as the survey instrument. Three hypotheses were tested using a questionnaire survey method. Findings revealed effective internal audit functions at First Bank at Okpara Avenue, in Enugu, with robust monitoring processes ensuring smooth business transactions. An effective risk management process was also identified, capable of detecting and preventing errors and fraud. The study evaluated the influence of these variables on Nigerian banks, employing the chi-square model. The result showed that the value of calculated X20.298 is greater than the critical value of X20.05 at a significant of 0.585. Therefore, we reject the null hypothesis and accept the alternative hypothesis. Thus, we accept that internal audit functions are effective in First Bank and are positive and significant. Results indicated that a well-managed internal audit environment contributes to risk management and fraud prevention, reducing fraud likelihood. Recommendations included ensuring proper management of the internal audit environment, reviewing customer and supplier complaints, and securing accurate financial records.

Leveraging technology in internal audit processes for streamlined management and risk oversight

The integration of advanced technologies into internal audit processes has revolutionized organizational management and risk oversight, enabling streamlined, data-driven decision-making. As businesses face increasingly complex regulatory environments and operational risks, traditional audit methods often struggle to keep pace. This paper explores the transformative role of emerging technologies, including data analytics, artificial intelligence (AI), robotic process automation (RPA), and blockchain, in enhancing internal audit efficiency, accuracy, and transparency. By automating repetitive tasks, RPA reduces audit cycle times and minimizes human errors, allowing auditors to focus on value-adding activities. AI and machine learning algorithms enable predictive risk analysis, anomaly detection, and real-time monitoring, strengthening an organization’s ability to identify and mitigate risks proactively. Additionally, data analytics tools facilitate comprehensive assessments of large datasets, uncovering patterns and insights that would otherwise go undetected in manual audits. The paper also examines the role of blockchain technology in fostering transparency and accountability through secure, tamper-proof audit trails. Despite the benefits, the adoption of these technologies presents challenges, including integration costs, skill gaps, and data privacy concerns. Addressing these challenges requires strategic investment, workforce upskilling, and collaboration between audit professionals and IT specialists. By leveraging technology, internal audit functions can evolve into proactive, agile frameworks that align with organizational goals, providing robust risk oversight and contributing to long-term sustainability.

FAKTOR PERSONAL UNTUK MENDUKUNG EFEKTIVITAS AUDIT INTERNAL

This research aims to determine and analyze the influence of internal auditors' personal factors: experience, education and independence on the effectiveness of internal audits in manufacturing companies. The research instrument uses a questionnaire and variable measurement with a 4 (four) point Likert Scale on 100 respondents as a sample with the characteristics of internal auditors in manufacturing companies. Experience, Education and Independence will be tested for their influence on Internal Audit Effectiveness. The research results state that experience, education and independence have a significant influence on the effectiveness of internal audit. The results of this research imply that companies have a responsibility to position the internal audit function to be organizationally independent so that it can carry out effective audit tasks. Companies are required to plan and develop internal auditor resources by providing work experience in fields other than audit, and encourage professionalism by providing continuous learning opportunities and certification for internal auditors.

The evolution of Indonesian SAI maturity: Oversight, insight, and foresight functions of health-themed performance audits

The maturation of Supreme Audit Institutions varied considerably across countries, shaped by numerous factors influencing their development trajectory. This research examines the evolutionary maturation of the health sector performance audits conducted by Badan Pemeriksa Keuangan (BPK), distinguishing itself from previous studies focusing on capability development, implementation process, evaluation of government policy effectiveness, or assessment of BPK’s performance audits. Amid the limited research on Supreme Audit Institutions (SAI) maturity models across various countries, this study aims to address this gap in the existing literature. A mixed-methods approach was employed, analyzing 840 health-related performance audit reports and BPK viewpoints from 2008 to 2023. This analysis was complemented by a comprehensive literature review and triangulated through interviews with auditors and auditees. The findings reveal that BPK’s maturity development was influenced by multiple factors, encompassing the adoption of new public management concepts, efforts to achieve the National Medium-Term Development Plan (RPJMN), the impact of the COVID-19 pandemic, and the integration of Sustainable Development Goals (SDGs). It is recommended that in the future, BPK should prioritize the most recent public issues more. Furthermore, to enhance BPK’s maturity, it is essential to incorporate an insight- and foresight-driven approach with thematic performance audits.

Land operations of agribusiness: risk indicators for the auditor

The aim of the study: justification of the organizational and methodological provisions of the audit of land operations of agribusiness enterprises. Gaps in the accounting provision of agribusiness lands have been identified (information is accumulated mainly on the off-balance sheet account 01; the inventory and assessment of land as a market asset are at the initial stage of development), the audit of land transactions is very relevant. It is a means of protecting the economic interests of land owners and a means of strengthening the information security of potential investors.A description of the auditor’s inspection of agribusiness lands was made. The methods and indicators of the auditor’s detection of illegal schemes and procedures for obtaining ownership or use of land are described. The need to extend the scope of audit to lease operations is substantiated. This is necessary because the formation of leased land use in Ukraine took place in the absence of a competitive environment for potential tenants. This led to unfair lease terms. Currently, the rent, in most cases, does not protect the economic interests of the landowners. Most of the contracts provide for its possible minimum amount. Services of not the highest consumer value are performed at the expense of rent, and grain is issued at prices higher than market prices. It has been proven that the audit of land transactions will also be important for strengthening the tax discipline of agribusiness entities. Recommended procedures: checking the completeness of calculation and timeliness of payment of the single tax of group 4 on leased and subleased land; verification of liability with the Personal Income Tax on income in the form of rent; checking the calculation and payment of the minimum tax liability.

Good Corporate Governance and Internal Audit on Financial Performance with Firm Size as a Moderating Variable in Financial Sector Companies on the Indonesia Stock Exchange, 2020-2023

This study aims to analyze the effect of Good Corporate Governance (GCG) and Internal Audit on financial performance, with Firm Size as a moderating variable, in financial sector companies listed on the Indonesia Stock Exchange for the 2020-2023 period. The research adopts a quantitative approach using secondary data, analyzed through Smart PLS 3. The results indicate that the Good Corporate Governance (GCG) variable has a significant effect on financial performance, and Internal Audit also significantly impacts financial performance. However, Firm Size does not influence financial performance. Additionally, the findings reveal that Firm Size does not moderate the relationship between Good Corporate Governance (GCG) and financial performance, nor between Internal Audit and financial performance. This study concludes that Good Corporate Governance (GCG) and Internal Audit individually affect financial performance, but Firm Size does not play a moderating role in these relationships.

Developing a Data Analytics Framework Using Python for Internal Audit Functions of the Accountant General’s Department of Malaysia

Purpose: This study aims to develop a data analytics framework that incorporates Python for continuous auditing purposes. This initiative involves revisiting the existing audit framework to incorporate data analytics with Python capabilities. This comprehensive audit framework will be the foundation for a robust and continuous auditing system, maximising Python’s potential due to its versatility, efficiency, and powerful data analysis capabilities. The proposed framework is designed to significantly enhance the effectiveness and efficiency of continuous auditing practices, specifically within the BPAD of the Accountant General’s Department of Malaysia (AGD). Design/ Methodology/ Approach: This study employs a qualitative methodology to develop a comprehensive audit framework integrating Python for continuous auditing. The approach consists of focus group interviews, in-depth discussions with key stakeholders from the BPAD, and a thorough examination of the current audit procedures and guidelines within existing audit documents. This method facilitates the understanding and identification of current practices and opportunities for improvement tailored to the BPAD's (Bahagian Pengurusan Audit Dalam [BPAD]) requirements while leveraging Python's robust capabilities in data analysis and process automation. Findings: This study discovers several challenges and limitations in the existing audit framework that warrant the development of an analytical data framework using Python for internal audit functions in the public sector. The proposed framework is expected to reduce manual data processing and analysis through automation, increase accuracy in audit results, and provide continuous real-time monitoring, potentially significantly enhancing the division’s continuous auditing capabilities, leading to more efficient, effective, and comprehensive audit processes. Originality/ Value: This study proposes an analytical data framework that incorporates Python for continuous auditing purposes tailored to government agencies' unique requirements and challenges. The framework focuses on integrating data analytics in audit processes, providing a novel approach to enhance internal audit effectiveness in the public sector. The traditional audit fieldwork is divided into two (2) sub-stages: Pre-Audit Analytics and Audit Analytics Fieldwork, following the Extract, Transform, Load (ETL) process for data preparation and analysis. This approach allows for real-time insights, proactive risk management, and improved decision-making. By automating data analysis with Python, the framework also enables the identification of anomalies, fraud detection, and more effective compliance than traditional methods. Keywords: Data analytics, continuous audit, public sector, Python, government

When Auditing Is Not Enough: Analysis of a Central Line Bundle Audit Program.

Bundled interventions and auditing have been recommended to reduce central line-associated bloodstream infection (CLABSI) events at acute care hospitals. We review the outcomes of a bundle audit program at an adult and pediatric academic medical center from April 1, 2021, to May 31, 2022. To analyze the impact on CLABSI rates following the introduction of a central line maintenance bundle audit process. All audit survey data, CLABSI event rates, and line days were collected. Statistical relationships were evaluated for CLABSI bundle performance with CLABSI rates and audit volume with CLABSI rates. Analyses were conducted at the hospital and unit level. No correlation is found between CLABSI rates and audit performance at the hospital level (adult units, P =.619, r-sq=2.13%; peds/NICU, P =.825, r-sq=0.43%) or at the unit level (n=7; P =.8-.896, r-sq=0.15%-18.2%). There was no correlation in CLABSI rates when reviewing performance by audit volume at the hospital level (adult, P =.65, r-sq=1.7%; peds/NICU, P =.677, r-sq=1.5%) or at the unit level (n=7; P =.25-.8, r-sq=1.2%-8.5%). By contrast, a single unit that did not participate in the audit program during the sample period reported a lower CLABSI rate than comparable participating units (P =.008). During the sample period, there was no relationship found between this CLABSI bundle audit program and improvement in CLABSI performance.

Work Engagement and Performance of Auditors in the Province of Apayao in the Implementation of Flexible Work Arrangements

This study examines the work engagement and performance of auditors in the Commission on Audit (COA) in Apayao, focusing on flexible work arrangements and the influence of demographic factors such as age, gender, education, and years of service. Using a quantitative approach, it evaluates engagement in three dimensions—vigor, dedication, and absorption—and measures performance for the first and second semesters of 2023. Descriptive, comparative, and correlational research designs are employed, with data gathered through a survey using the Utrecht Work Engagement Scale (UWES) and performance ratings. Findings reveal that auditors exhibit high engagement, particularly in dedication, reflecting a strong sense of pride and purpose in their roles. Performance ratings were consistently "Outstanding" across both semesters, indicating a high level of commitment. Statistical analysis shows that demographic factors significantly influence both engagement and performance, highlighting the need to tailor support strategies to individual backgrounds. However, the study found no significant relationship between engagement levels and performance, suggesting that other factors, such as resources and workload management, may play a larger role in shaping performance outcomes. This study concludes that while flexible work arrangements contribute positively to engagement and performance, engagement alone does not directly impact performance. It recommends that COA consider demographic characteristics in designing engagement programs, enhance support for flexible work arrangements, and address additional factors to optimize auditor effectiveness and well-being.

Auditor Performance Perspective: Role Conflict and Due Professional Care

A decline in auditor performance has become a public concern, particularly due to the auditors’ involvement in Role Conflict and Due Professional Care during audits. The objective of this research is to determine the extent to which role conflict influences auditor performance and the extent to which due professional care impacts auditor performance. The research method employed is descriptive verification with a quantitative approach using multiple linear regression analysis through the Pearson product moment, and data collection techniques with questionnaires tested using SPSS 23.0 for Windows software. The results of this study indicate that role conflict and due professional care influence auditor performance, meaning if the auditor can manage existing conflicts well and is able to use professional skills, then Auditor Performance will increase. Similar research results also occurred in Iran and the United States, where auditor performance declined due to the lack of spiritual intelligence of auditors and communication modes. The novelty of this research is that auditor performance declines due to different roles that must be performed simultaneously, resulting in role conflict when conducting an examination that violates due professional care. This research underlines that if role conflict can be minimized and due professional care increases, then auditor performance will also increase.

The digital (r)evolution in internal audits: are we there yet? Some insights from Italy

PurposeThis study aims to identify the principal changes that digitalization has brought about in the internal audit functions (IAFs), focusing on the main characteristics that have been affected by this phenomenon.Design/methodology/approachThe study follows a qualitative approach, involving the thematic analysis of semistructured interviews. A total of 22 professionals working in Italian-listed companies’ IAFs were interviewed. The framework of institutional theory was used to analyze the results.FindingsThe elements most affected by the digitalization of IAFs in Italy are: the skills required in IAFs, the relationship with external consultants and the types of activities performed by internal auditors (IArs). Nevertheless, the extent of the level digitalization within the IAFs of the companies analyzed appears to vary in accordance with the level of institutional pressures experienced by the organizations.Originality/valueThe study contributes to the literature on IA and digitalization by delineating the principal elements that are influenced by the digitalization process of IA. Moreover, it highlights how these elements develop and evolve as the level of digitalization of the IAF changes.

Digitally Driven Short- and Intermediate-term Courses of Primary Care Psychiatry for Doctors: A Theme-based Analysis and Performance Audit.

The National Mental Health Survey of India 2015-2016 identified a substantial treatment gap in mental healthcare, emphasizing the urgent need for improved training of primary care doctors (PCDs) in managing psychiatric disorders. This study aimed to evaluate the effectiveness of three digitally delivered primary care psychiatry courses offered by the department of psychiatry in a tertiary neuropsychiatric center: the Certificate Course in Primary Mental Healthcare (CCPMH), the Diploma in Community Mental Health (DCMH), and the Diploma in Primary Care Psychiatry (DPCP). Based on the board of studies documents, including curriculum, delivery methods, accreditation criteria, and outcomes, a comparative and thematic analysis of the courses was conducted. The digital courses differed in duration, depth, and delivery methods. The DPCP, the most intensive and personalized program, was highly effective in translating knowledge into clinical practice. The CCPMH provided a foundational, short-term course for PCDs, while the DCMH covered a broader range of topics relevant to primary care psychiatry, supplemented with self-learning modules. All courses significantly contributed to reducing the mental health treatment gap by training a substantial number of PCDs. Digitally delivered courses are essential in addressing the mental health treatment gap in India. The DPCP, with its emphasis on practical training and personalized learning, demonstrates high effectiveness in equipping PCDs with the necessary skills to manage psychiatric disorders. However, further research is needed to evaluate long-term outcomes and to address the scalability and accessibility challenges of these.

Delivering Results for Canadians: Improving the Contributions of Enabling Functions

AbstractImplementing a results‐oriented management system has been a long‐term goal and a challenge for federal public sector organizations in Canada. This article highlights the efforts by the Government of Canada to improve performance measurement, evaluation, and audit (PMEA) functions over time. The article traces administrative reforms since 2000, highlighting the shift from inputs and outputs towards a results‐focused environment aimed at achieving outcomes. However, even after many reforms and goodwill, there remain gaps among the senior policymakers regarding the meaning of “results for Canadians.” The article points out that siloed approaches by function have led to isolated practices and inefficiencies in data sharing and reporting for effectively supporting decision‐making. Although individual functions have improved, implementing a comprehensive results‐focused management architecture continues to pose a significant challenge. The article proposes steps to enhance the effectiveness of PMEA functions, emphasizing the need to integrate functions to enhance public services, decision‐making, and institutional learning.

DETERMINAN PENCEGAHAN FRAUD PADA BANK BUMN DI KOTA BATAM

This study aims to analyze the influence of internal audit and internal control on fraud prevention at state-owned banks in Batam City. It's critical to comprehend the elements that can stop fraud. Employees of state-owned banks in Batam were given questionnaires as part of the quantitative approach utilized in this study to collect data. The results of the study indicate that internal audit has a significant influence on fraud prevention. This indicates that the effectiveness of the internal audit function in identifying weaknesses and ensuring compliance with operational procedures plays an important role in minimizing the potential for fraud. However, the results of the study also show that internal control does not have a significant influence on fraud prevention partially. However, when tested simultaneously, internal audit and internal control together have a significant influence on fraud prevention. This finding emphasizes the importance of synergy between internal audit and internal control in creating an effective system to prevent fraud in the banking sector. Therefore, banks need to increase the role of internal audit and ensure good coordination with the internal control system to achieve optimal results in fraud prevention efforts.

Corporate Governance, Internal Control, Risk Management of Cooperative Banks in the Philippines: Inputs to Bank Strategic Improvement Plan

This study evaluated the compliance of Philippine cooperative banks with the governance, internal control, and risk management standards established by the Bangko Sentral ng Pilipinas (BSP). A comprehensive assessment was conducted to examine corporate governance practices in terms of governance structure, board-level committees, and related party transactions; internal control mechanisms focusing on compliance frameworks, internal control frameworks, and internal audit functions; and risk management strategies and practices related to risk identification, risk assessment, and risk management evaluation. Furthermore, the study examined the relationship between corporate governance, internal control, and risk management, proposing a strategic improvement plan based on the findings. The findings revealed that cooperative banks generally adhere to BSP’s governance standards, demonstrating strong practices in governance structures, board-level committees, and related party transactions. Additionally, the banks maintain robust internal control frameworks and rigorous internal audit procedures. While risk management practices are generally effective, areas such as IT and social media risk management require further attention. A significant correlation was observed among corporate governance, internal control, and risk management practices, suggesting that improvements in one area can positively impact the others. Based on these findings, a strategic improvement plan is proposed to enhance the overall effectiveness of cooperative banks. The study recommends continuous improvement of governance structures, investment in advanced monitoring systems for internal controls, and prioritization of risk management improvements, particularly in IT and social media. Future research is suggested to explore the long-term impact of these recommendations on the sustainability and growth of cooperative banks in the evolving regulatory and technological landscape.

Behavioral aspects of auditor detection of fraud in financial statement audits

Over the past 50 years, in the researches of foreign scientists, the issues of accounting and auditing have been considered through the theory of behavioral accounting. On the other hand, in the studies of Ukrainian scientists, behavioral accounting in accounting and auditing was almost not considered. The main meaning of the theory of behavioral accounting is not to consider accounting and auditing exclusively in numbers, but to consider that accountants and auditors are people with a specific profession who behave according to their feelings and thoughts. It is customary to consider the concept of behavioral accounting according to the following topics: the influence of accounting information on behavior, management control, audit, ethics. The paper examines the behavioral aspects of financial reporting fraud, cognitive research in accounting and cognitive styles, the impact of the auditor's cognitive style on fraud detection, ethical aspects of accountants’ and auditors' behavior, etc. The behavioral aspects of fraud from both the perpetrators and the auditor, the states of fraud, and the fraud triangle are investigated. Behavioral aspects of fraud using behavioral theories, in particular cognitivism are investigated. Thus, cognitive characteristics (abilities, cognitive style, and strategy), types of auditor cognitive styles, cognitive factors that affect auditor performance, and cognitive processes used by auditors when considering financial reporting fraud are investigated.

The potential effect of digital transformation on the internal audit function in a bank: case of BADR Bank in Algeria

The potential effect of digital transformation on the internal audit function in a bank: case of BADR Bank in Algeria

Impact of stress, job satisfaction, work–life balance and telework on auditors’ job performance: a PLS-SEM and fsQCA approach

PurposeThe present study aims to analyze the influence of stress, job satisfaction and work–life balance on auditors’ job performance and examine the moderating effect of telework on previous relationships.Design/methodology/approachThe research data are collected through an electronic questionnaire with 322 Portuguese auditors. We used a partial least squares–structural equation model and fuzzy set quality comparative analysis to test our hypotheses.FindingsThere is a positive relationship between job satisfaction and job performance. Conflict, positively, and ambiguity, negatively (components of stress), influence job performance. Work–family conflict was shown to be equally impactful in decreasing auditors’ technical knowledge and ability, and this effect was amplified in the presence of telework. The results show the existence of a complex structure of configurational arrangements that are sufficient to achieve high job performance.Practical implicationsAudit firms need to pay attention to employees’ feelings related to their work since their well-being affects their job performance. In general, the teleworking context did not affect the relationships studied, which means that audit firms can enjoy its advantages without compromising audit quality.Originality/valueThe study contributes to the growing literature on the determinants of auditor performance. The inclusion of teleworking as a contingent factor is a theoretical innovation in auditing studies. The results emphasize the importance of researchers including the multi-method approach for a better understanding of the complex structure of configurations that are sufficient for job performance.

An Examination of Performance Audit Principles in Public Sector Audit: An Interpretive Study in Bangladesh

This paper aims to assess the principles of performance auditing (PA) in the public sector of Bangladesh. The PA is conducted by the supreme audit institution of the country, the Comptroller and Auditor General (OCAG). To attain the objective this study analyses all the performance auditing (PA) reports published by the OCAG. There are 19 published PA reports. The PA report has been classified into several principles, including the 3Es as suggested by the International Organization of Supreme Audit Institutions (INTOSAI). The level of compliance has been integrated into the classification scheme of the PA reports. The contents analysis demonstrates that Effectiveness has been addressed in the highest number of reports whereas Efficiency has not been addressed in any reports. The extended classifications (beyond 3Es) have been reflected in the PA reports rarely. In addition, compliance issues have been presented weakly in the reports. The findings have been analyzed in line with the contemporary studies in public sector auditing. Public sector auditing has been studied merely in developing countries. This study will contribute to this aspect. Moreover, the future potential research avenue has been explored in this study. The limitation of this study is confined in the number of reports which is 19. Therefore, these limited available data and the uniqueness of the developing country defy the generalization of the findings but can contribute to the PA research in developing countries.