Auditor Independence Research Articles

Issues in Enforcing Accountability in Mahatma Gandhi NREGS: Study of Social Audit in Telangana

Social audit is a pivotal tool for enforcing social accountability in the planning and implementation of Mahatma Gandhi National Rural Employment Guarantee Scheme. It involves comparing official records with ground realities to assess the achievement of objectives of the Act through correct processes. Social Audit is done by people with facilitation by independent social audit units established for this purpose. This paper is based on a study on the integrity of the social audit process in Telangana, facilitated by the Society for Social Audit, Accountability and Transparency (SSAAT). Key findings of this research are poor maintenance and provisioning of records by implementing agencies; non-transparent selection of Village Resource Persons (VRPs); unsystematic training of VRPs; inadequate community mobilisation and awareness efforts; absence of independent observers in most Gram Sabhas; low attendance and voice of wage-seekers in Gram Sabha; low transparency and people’s participation in Mandal level public hearing; postponement of Social Audit process; and non-reporting of some issues by resource persons. This research paper recommends optimal utilization of the resource persons; stringent actions in case of poor maintenance and non-provisioning of records; enhancement of resource fee for VRPs; training of trainers and quality monitoring of training; proactive disclosure of information; enhancement of community involvement and mobilisation; mandatory registration of grievances and issuance of receipts; a standard pictorial technical manual with the detailed methodology of verification; mandatory presence of Junior Engineer or Technical Assistant during worksite verification; stringent disciplinary action on independent observer not attending the Gram Sabha; and public hearing at Mandal level to be chaired by an official other than those from implementing agency.

Provision of Evidence-Informed Psychological Interventions Following the Queensland (Australia) 2010-11 Floods and Cyclones; the Barriers and Successes.

The study assessed the impact on clinicians' 'perception of skills' in postdisaster evidence-informed care (EIC) following participation in an online training programme implemented following the Queensland floods and cyclones of 2010-11, clinician confidence to provide EIC, the frequency clinicians used EIC and barriers to providing postdisaster specialist mental health care. Clinician perception of pre and posttraining skills, confidence in providing therapies such as trauma-focused cognitive behaviour therapy (TF-CBT), frequency of therapies provided and clinician perception of barriers to the programme were assessed quantitatively and qualitatively. Clinical staff (n = 60) employed by the 2010-11 postdisaster mental health programme participated in an online survey conducted over the last 12 weeks of 2012. After the programme concluded an independent audit of the clinical record of mental health clients treated by clinicians employed in the specialist mental health programme was undertaken. Perception of clinical skills in various EIC modalities was completed pre and posttraining. Confidence to provide a treatment was rated on a five-point scale. The clinical record audit identified the treatments provided to clients. Barriers to programme delivery were rated on a five-point scale, with qualitative feedback highlighting programme concerns. Posttraining clinicians perceived skills in TF-CBT (p < 0.0001), cognitive behaviour therapy (CBT) (p < 0.001) and exposure therapy (p < 0.001) had improved. Following training, clinicians described themselves as moderately to extremely confident in implementing TF-CBT (87%), exposure therapy (80%) and skills for psychological recovery (SPR) (88%). Clinical records analysis indicates that 25% of cases received no TF-CBT, while 43% received one to five sessions. Barriers to care included a lack of cross-service relationships. Recommendations focused on training and early commencement of intervention programmes. The study echoes the findings of the 2020 Australian Bushfire Royal Commission recommendations that highlighted a need for clinician training in postdisaster EIC and the availability of clinicians with specialised postdisaster mental health skills.

The impact of accountability pressure and time budget on the quality of audit services of independent auditors

The impact of accountability pressure and time budget on the quality of audit services of independent auditors

Bridging Profitability and Sustainability: Insights from Carbon Emission Disclosures and Governance Practices

Background: This study investigates the impact of Good Corporate Governance (GCG), profitability, and carbon emission disclosure on firm value in the mining sector listed on the Indonesia Stock Exchange (IDX) from 2019 to 2022. The mining sector's significance in Indonesia's economy and the growing importance of sustainable corporate practices provide the context for this research. Methods: The study employs multiple regression analysis to analyze data from 11 mining companies. The variables include GCG mechanisms (managerial ownership, institutional ownership, independent commissioners, and audit committees), profitability (measured by Return on Assets), and carbon emission disclosure. Firm value is proxied by Tobin's Q. Results: The findings indicate that profitability has a positive and significant impact on firm value. However, GCG mechanisms such as independent commissioners and audit committees have negative effects on firm value. Carbon emission disclosure does not significantly influence firm value. Conclusion: The study highlights the importance of profitability in driving firm value but also underscores the need for effective GCG mechanisms and greater emphasis on environmental responsibility. The results contribute to the discourse on sustainable corporate practices and their implications for investor confidence, emphasizing the necessity of balanced approaches that integrate financial performance with environmental sustainability.

Auditors’ Life Cycle in Clients and Auditor Independence

This study hypothesizes that, in client firms, audit teams or auditors go through life cycle phases—entry, adjustment, and recursion—that give rise to distinct patterns of independence across time. The life cycle paradigm depicts the auditors as facing pressures during entry to adhere strongly to their professional mandate, including the strict exercise of independence. The result is tense auditor–client relations and an increased likelihood of auditor turnover during the entry phase. Auditors that gain entry will “loosen up” and adjust their stance on independence due to the reduced entry pressures. As a result, the adjustment phase will witness a decline in auditor–client disagreements and a lower likelihood of auditor turnover. Over protracted periods, the audit process becomes tightly structured and recursive; the repetitive nature of the processes leads to audit fatigue, less attention to the independence mandate, and greater reliance on clients. The phenomenon portends an even further decline in auditor–client tension and a diminished likelihood of auditor turnover. These predictions are tested using auditor turnovers following auditor–client disputes as surrogates for auditor independence. The results confirm the life cycle phenomena and show that the level of auditor independence peaks during the early years of the auditors’ tenure and declines afterwards.

Evaluation of Financial Reporting Standards Adaptation Process: Research for Professionals and Academicians

The formation and widespread use of standards to ensure international uniformity in the world is recognised as one of the most significant changes in financial reporting in the history of accounting. These changes and developments have a significant impact on professional members and accounting education, which are closely related to the adaptation process of standards. The purpose of this study is to examine the views of academicians and independent auditors who provide accounting education at universities in Turkey on the financial reporting standards adaptation process. The analysis of the data obtained from 389 participants revealed no significant differences in opinion between independent auditors and academicians regarding their general views on standards and the services provided by relevant institutions on standards. However, there was a notable divergence of opinion on the perceived effectiveness of the POA in addressing standards-related issues and the broader challenges associated with standards.

Pengaruh Motivasi Auditor dan Kompleksitas Tugas terhadap Kinerja Auditor Pemerintah Daerah: Studi pada Inspektorat Aceh

This study aims to analyze the influence of auditor motivation and task complexity on the performance of government auditors. Auditor motivation is considered a crucial factor that can drive work efficiency and effectiveness, while task complexity contributes to determining an auditor's ability to optimally complete their tasks. This research was conducted on employees of the Aceh Inspectorate, encompassing 82 individuals from various positions, including Inspectors, Secretaries, Assistant Inspectors, functional auditor officials, and other staff. The study employed a quantitative approach with a census method, where the entire population was used as the research sample. To test the hypotheses, Structural Equation Modeling (SEM) was utilized, allowing simultaneous and in-depth analysis of variable relationships. SEM was chosen for its ability to test causal relationships and provide accurate estimations regarding the influence of variables in the study. The findings indicate that auditor motivation has a direct and significant effect on auditor performance, with a greater contribution than task complexity. High motivation has been proven to enhance the efficiency and effectiveness of auditors' work. Task complexity also has a significant impact, though its contribution is moderate (value of 0.417). However, the study also revealed that other factors, such as integrity, professionalism, and auditor independence, influence auditor performance, even though they were not the primary focus of the research. This study emphasizes the importance of enhancing auditor motivation and managing task complexity, as well as integrating other factors into further analyses to provide a holistic understanding of the factors affecting the performance of government auditors.

How the Corruption and Predictors of Audit Structure Impact the Firm Performance in Developing Economy?

Corruption remains the core issue in developing economies. In the last decade of the 20th century three elected governments were dismissed in Pakistan on account of malpractices and corruption. Present study evaluated the effect of corruption on performance of listed firms first time in the context of Pakistan. The results showed that corruption positively affects the performance of the firm measured by Tobin’s Q. The results revealed that payment of extra money to corrupt government officials to enter social networks and to enjoy the tax benefits, speedy transaction processes and relaxed regulator supervision have positive effect on firms’ performance. The results support the corruption theory of ‘Grease in Wheels’. This study also examined the impact of Audit Independence and External Audit Quality on performance of listed firms. The results showed that audit committee independence has a statistically significant and positive impact on firm market value whereas the impact of external audit quality is insignificant on market performance of the firm. The results necessitate anti-corruption measures for the development of the performance of the listed firms. Results also suggest the presence of good corporate governance practices improve the firm’s performance. The present study used data of 86 companies of commodity sectors listed on Pakistan Stock Exchange for 13 years from 2008 to 2020. Generalized Method of Moments (GMM) is used for analysis.

The Effect of Earlier Contract Date for Auditor Change on Audit Quality

ABSTRACTThis study investigates the effect of an earlier contract for auditor change (ECAC) on audit quality. In November 2018, the Korean government mandated that client firms must complete audit engagement contracts before the date of the audit report. This requirement informed incumbent auditors about the final year of their engagement prior to completing audit procedures. Our hypothesis suggests that this increased awareness enhances the independence of incumbent auditors, resulting in improved audit quality. The findings support the hypothesis and reveal that audit quality with incumbent auditors in the year preceding the auditor change is higher following the implementation of ECAC. ECAC is identified as a cost‐effective approach, as it can be readily implemented by advancing the notice date for auditor changes. These findings offer valuable insights to other countries seeking to enhance their audit quality while minimising costs.

Determinants of Earnings Management: The Moderating Role of Firm Size

This study aims to provide empirical evidence on the impact of financial distress, financial ratios, and corporate governance on earnings management, using company size as a moderating variable. This study focuses on real estate, construction, and property companies listed on the Indonesia Stock Exchange (IDX) between 2020 and 2022, with a sample of 54 companies selected through purposive sampling. Data analysis was conducted using multiple linear regression to test the direct effect of independent variables on earnings management and interaction test to evaluate the moderating role of firm size. The research findings show that financial distress affects earnings management, which suggests that companies under financial stress are more likely to rely on earnings management to present favorable earnings performance. In contrast, financial ratios do not affect earnings management, which suggests that well-performing firms are less likely to engage in the practice. Good corporate governance, represented by the proportion of independent directors, audit committee and managerial ownership, also affects earnings management. In addition, firm size moderates the relationship between financial distress and earnings management, with larger firms showing a greater tendency towards earnings management when facing financial challenges. These results underscore the importance of considering financial conditions and firm size when monitoring earnings management, as larger firms may be more prone to earnings management practices under certain conditions.

Audit Forensik sebagai Upaya Pemberantasan Korupsi Partai Politik : Komparisi Indonesia dan Nigeria

Indonesia's political party reporting especially during the election period is not yet accountable, transparent, and leads directly to corruption. And preventive and repressive measures to detect fraudulent reporting have not been done with the maximum on a cadre of both the political and the political party themselves. Such a situation would require the government to devise a strategy for the political party's financial checkups through forensic audits as applied in several countries, including Nigeria. The study aims to examine the model against the corruption of the political party done by Nigeria through its forensic audits and compartmentalizing its application in Indonesia. The author used normative-approach juridical methods with two approaches: the statute approach and comparative approach. The study raised two major issues. First, how is the corruption of political parties that occurred in Indonesia and Nigeria during the election period? Second, how does the forensic audit in Indonesia and Nigeria help to stop the corruption of the political party? Studies have shown that political corruption in both Indonesia and Nigeria consists mainly of bribery, votes buying, and cheating in reporting on party campaigns. The forensic audit is one of the most effective efforts to prevent and treat the political party's corruption through fraud detection coupled with increased independent forensic audit team to ensure healthy political finances.

Shareholder Pressure, Independent Audit Committee and Sustainability Reports

Shareholder Pressure, Independent Audit Committee and Sustainability Reports

Dinamika Kinerja Keuangan dan Opini Audit Going Concern pada Perusahaan Manufaktur yang Terdaftar di BEI

The existence of the capital market requires companies to undergo independent audits conducted by a Public Accounting Firm (KAP) that has obtained permission from the Minister of Finance and is trusted by the company. Auditors must carefully evaluate the company’s situation so that the audit report reflects the true condition of the company and does not mislead investors. A going concern audit opinion is the auditor's assessment of a company's ability to continue its operations. Factors influencing the going concern audit opinion include profitability, liquidity, leverage, company size, and company growth. This study aims to analyze and provide empirical evidence regarding the influence of profitability, liquidity, leverage, company size, and company growth on the going concern audit opinion. The population of this study is all manufacturing companies listed on the Indonesia Stock Exchange (BEI) during the period of 2020-2022, with a sample of 153 companies selected using purposive sampling. The data were analyzed using logistic regression. The results show that company size has a negative effect on the going concern audit opinion, while factors such as profitability, liquidity, leverage, and company growth do not significantly influence the going concern audit opinion. Future studies are recommended to expand the sample size and include additional relevant variables.

Mastering Corporate Integrity: The Dynamic Relationship Between Board Independence and Financial Quality

The quality of financial reporting is increasingly scrutinized in the context of corporate governance, particularly with respect to board independence. This study explores the relation among board independence and financial reporting quality, an area of growing interest as stakeholders demands greater transparency in corporate financial practices. Board independence is hypothesized to increase the quality of financial reporting by mitigating conflicts of interest and increasing accountability. This research employs a bibliometric approach to review 66 journal articles published between 1995 and 2020, focusing on the social sciences and business disciplines. Using the bibliometric 3.0 package in R-studio, we carry out a comprehensive bibliometric analysis to identify key sources, influential authors, and the evolution of research themes. Our findings indicate a rising focus on the impact of board independence on financial reporting, with significant attention to the role of independent audit committees and the importance of diversity in board composition. We also observe an increasing number of studies on how board independence affects company transparency and earnings management. This paper offers important implications for policymakers, investors, and corporate governance researchers, emphasizing the need to strengthen board independence practices to enhance financial reporting quality and corporate transparency.

The implications of objectivity and independence in ensuring the efficiency of internal audit in public institutions in the Republic of Moldova

This article presents the results of the examination of the impact of objectivity and independence on the efficiency of the internal audit in the public sector of the Republic of Moldova. The study begins with the theoretical examination of the key features of internal audit effectiveness, objectivity and independence. The validation of research results is carried out based on econometric methods by means of Spearman and Pearson correlation coefficients. The practical information was gathered from the consolidated annual report on public internal financial control for the year 2022 and 56 individual activity reports of the internal audit subdivisions of national public entities. Finally, it was demonstrated that the optimization of the audit processes is also considered effective when taking into account the reality, complexity and dynamics of economic operations, and the effectiveness of the internal audit is directly influenced by the objectivity and independence of the internal auditor. This article aims to provide a comprehensive perspective on internal audit in the public sector and how it contributes to enhancing added value and ensuring transparency and accountability.

The Impact of Emotional Intelligence on Audit Quality through Job Stress: Evidence from Vietnamese Independent Auditors

Introduction: This study was conducted to examine how emotional intelligence can affect audit quality through its impact on job stress. Objectives: The aim of the study is to determine whether higher levels of emotional intelligence can reduce job stress and improve audit quality, taking into account the pressures that auditors face in Vietnam, such as tight deadlines and complex regulatory requirements. Methods: Using quantitative research methods, using a structured survey to collect data from 327 auditors, audit team leaders, audit department heads and directors of 125 independent auditing companies in Vietnam and using the SEM structure model on SPSS and AMOS 20 software to test hypotheses. Results: The results show that all dimensions of emotional intelligence (Assessing one's own emotions, Assessing others' emotions, Using Emotions, and Regulating Emotions) significantly reduce work stress and work stress, which in turn negatively affect audit quality. Conclusions: These findings are significant because they highlight the importance of emotional intelligence training and stress management interventions in improving auditor health and improving audit quality. By addressing work stress, audit firms can ensure better performance and higher audit standards in a fiercely competitive market like Vietnam, where Big4 audit firms account for 70% of the audit market share

Gig Work at What Cost? Exploring Privacy Risks of Gig Work Platform Participation in the U.S.

In recent years, "gig work" platforms have gained popularity as a way for individuals to earn money; as of 2021, 16% of Americans have at some point earned money from such platforms. Despite their popularity and their history of unfair data collection practices and worker safety, little is known about the data collected from workers (and users) by gig platforms and about the privacy dark pattern designs present in their apps. This paper presents an empirical measurement of 16 gig work platforms' data practices in the U.S. We analyze what data is collected by these platforms, and how it is shared and used. Finally, we consider how these practices constitute privacy dark patterns. To that end, we develop a novel combination of methods to address gig-worker-specific challenges in experimentation and data collection, enabling the largest in-depth study of such platforms to date. We find extensive data collection and sharing with 60 third parties—including sharing reversible hashes of worker Social Security Numbers (SSNs)—along with dark patterns that subject workers to greater privacy risk and opportunistically use collected data to nag workers in off-platform messages. We conclude this paper with proposed interdisciplinary mitigations for improving gig worker privacy protections. After we disclosed our SSN-related findings to affected platforms, the platforms confirmed that the issue had been mitigated. This is consistent with our independent audit of the affected platforms. Analysis code and redacted datasets will be made available to those who wish to reproduce our findings.

The board gender, audit committee features, and social disclosure: Corporate governance practices from emerging markets

This study aims to analyze the empirical testing of four hypotheses, i.e., the influence of the independent board of directors, the board gender, the independent audit committee, and the audit committee features on the extent of social disclosure. This study was conducted on companies listed on the Indonesia Stock Exchange (IDX) in the mining and energy industries, totaling 63 companies. Out of these, 55 companies met the criteria to be included in the unit of analysis. The data analysis then used ordinary least squares (OLS). The study results found that independent board of directors, independent audit committee, and audit committee features have a significant effect on the extent of social disclosure. Meanwhile, board gender has no significant effect on the extent of social disclosure. The results of testing this hypothesis also imply that the existence of an independent party, both on the board of commissioners and the audit committee, is urgently needed. They use an independent, professional, and non personal interest attitude in their assignments. In addition, the existence of gender in the audit committee is essential to improve oversight of disclosure.

Optimizing data collection for obstetrical ultrasound research at the primary health care level in rural Uganda

ABSTRACT Background Neonatal and maternal mortality remains high in low- and middle-income countries (LMIC), especially in sub-Saharan Africa. Quality data collection is crucial to understand the magnitude of these problems and to measure the impact of interventions aimed at improving neonatal and maternal mortality. However, data collection in the low-income country setting, especially in rural areas, has been a challenge for researchers, policy makers, and public health officials. Here, we describe the methodology, experience and lessons learned while collecting data at lower-level primary health care facilities in rural Uganda. Methods Data collection was performed at Health Center III sites in rural Uganda, in partnership with Imaging the World and its affiliate Imaging the World Africa. The primary purpose of the data collection was to study the efficacy and clinical effect of introducing prenatal ultrasound services at these sites. Local data clerks were hired to perform the data collection through a combination of intensive training and on-the-ground support. Frequent oversight was used to support data collection. Results Of 2,397 enrolled pregnant women, 1,977 (82.5%) had complete outcome data. Upon independent expert audit, the data were >80% accurate for 10/11 variables and >90% accurate for 6/11 variables. Overall, the data collected at the rural HCs were 90% accurate. Discussion Accurate and complete data collection is possible in an LMIC setting if appropriate training and oversight are employed.

Mediating Assurance in Auditing Standards: Auditors Mitigation of Risks of Frauds

This study critically interrogates mediating assurance in auditing lived experiences of independent auditors. It is qualitative research based on constructivist perspective. A combination of participant observations and interviews were used to build data corpus. Data was analysed using thematic coding. Findings show that assurance is felt in the present auditing standards, corroborated by mediating assurance while drawing on the main objectives of auditing. Findings also show that ISA motivates the verification of accounting functions disrupting status quo for perpetuation of fraud outside the outreach of auditor. Therefore, the auditor tends to mold credibility with its works, towards reducing auditing expectation gap. As the auditor reports to the corporate governance, mainly the audit committee, certain cases may reveal barriers for additional audit jobs to elucidate cases of significant accounting errors that have the characteristics of accounting fraud. We conclude that, insofar as the ISA tries to favour a set of auditors who suppress compliance or auditor with a myopic approach, the main motivations of assurance would not have been met. As an implication, it constitutes an innovation in the fieldwork of the auditors to embrace the current responsibilities demanded by users of financial statements to mitigate the risk of fraud.