Audit Institutions Research Articles

The adaptation of design thinking in auditing

How can a supreme audit institution (SAI) use design thinking in auditing? SAIs audit the way taxpayers’ money is collected and spent. Adding design thinking to their activities is not to be taken lightly. SAIs independently check whether public organizations have done the right things in the right way, but the organizations might not be willing to act upon a SAI’s recommendations. Can you imagine the role of design in audits? In this paper we share our experiences of some design approaches in the work of one SAI: the Netherlands Court of Audit (NCA). Design thinking needs to be adapted (Dorst, 2015a) before it can be used by SAIs such as the NCA in order to reflect their independent, autonomous status. To dive deeper into design thinking, Buchanan’s design framework (2015) and different ways of reasoning (Dorst, 2015b) are used to explore how design thinking can be adapted for audits.

Are Latin American performance audits leading to changes?

The purpose of this paper is to analyze the perceptions of the public entities audited in Latin America (the auditees) about the effectiveness of the performance audits carried out on their institutions by their supreme audit institutions (SAIs; the auditors) to determine to what extent these audits are promoting changes in these public entities. After revising the webs of the SAIs of all Latin American countries, a sample of the entities evaluated with performance audits was selected and a questionnaire (focused on the audit process, the actions taken afterwards, and the follow‐up processes) was sent to them. The results show, as in other Organisation for Economic Co‐operation and Development settings, different degrees of real implementation of performance audits in this geographical area. The audited entities that perceive performance audits useful and trust in the SAIs' activities are also those that implement more recommendations and sooner.

Consequences of (un)regulated party funding in South Africa between 1994 and 2017

Globally, the topic of political party funding evokes strongly defended positions, partly because of the nasty dynamics that usually arise whenever money and politics cross paths. The primary issue in contention is whether to institute mandatory disclosure legislation, legally compelling parties to reveal their sources of funding, and the likely consequences of such disclosure. Alternatively, a laissez-faire approach may be adopted to party funding, and to determine which parties to exclude from state or public funding. In South Africa, these issues routinely raise public outcry and result in emotive debates pertaining to the expenditure of public finance and accountability. Thus, this article explores contemporary issues on political party funding in South Africa, focusing on recognised parties and examining their sources of funding. This article examines recent media reports on allegations of a lack of accountability on the part of political parties, particularly their apparent reluctance to disclose their sources of funding. It seeks to contribute to the debate on party funding in South Africa, through the use of a qualitative research method using content analysis. The authors contend that officially recognised parties should be audited by a Supreme Audit Institution (the Auditor General South Africa, locally) prior to tabling their annual reports in Parliament. The article concludes that such audit responsibility should not be given to private audit firms in order to avoid possible conflicts of interest, as some audit firms and individual employees may also be funders of some of the political parties.

The influence of Corporate Governance Mechanism Towards Company Performance

Corporate Governance explains the relation between many participants in the company that determines the direction of company performance. The purpose of this study is to analyze whether the mechanism of Corporate Governance affects company performance. the results of the study, it can be concluded that institutional ownership, managerial ownership, and audit committees do not have a significant effect on company performance. Independent commissioners have a significant effect on Company Performance.

IFRAMES DESIGN IN HEALTH SECTOR BLUD: ASSET AND INVENTORY SYSTEM

This research aims to design an information system to record assets and inventories at DKI Jakarta Regional Public Service Agency (BLUD). This study is based on the findings from Examination Report (LHP) issued by the Indonesian Supreme Audit Institution (BPK RI) which states that there are quite a few problems about assets at BLUD (BPK RI, 2017). This research is expected to answer research questions about how to design the system of assets and inventories needed by BLUD to assist the process of internal control and asset management. This study uses the Framework for the Application of Systems Thinking (FAST) as a method for systems development popularized by Whitten and Bentley (2007). This study uses a case study approach with the triangulation method, where the qualitative data as primary data by conducting interviews and observations. Unit of analysis in this study is the BLUD responsible for asset management. Currently, the existing asset information systems only record fixed assets and not connected to the financial reporting system. Assets and inventories information need to move manually by re-inputting the value to prepare financial statements. The result of this research is a design of asset information system to enhance internal control. Keywords: Assets, Information Systems, Internal Control Systems

IFRAMES DESIGN IN HEALTH SECTOR BLUD: ASSET AND INVENTORY SYSTEM

<p class="Default"><em>This research aims to design an information system to record assets and inventories at DKI Jakarta Regional Public Service Agency (BLUD). This study is based on the findings from Examination Report (LHP) issued by the Indonesian Supreme Audit Institution (BPK RI) which states that there are quite a few problems about assets at BLUD (BPK RI, 2017). This research is expected to answer research questions about how to design the system of assets and inventories needed by BLUD to assist the process of internal control and asset management. This study uses the Framework for the Application of Systems Thinking (FAST) as a method for systems development popularized by Whitten and Bentley (2007). This study uses a case study approach with the triangulation method, where the qualitative data as primary data by conducting interviews and observations. Unit of analysis in this study is the BLUD responsible for asset management. Currently, the existing asset information systems only record fixed assets and not connected to the financial reporting system. Assets and inventories information need to move manually by re-inputting the value to prepare financial statements. The result of this research is a design of asset information system to enhance internal control.</em><em></em></p><p class="Default"><strong><em>Keywords:</em></strong><em> </em><em>Assets, Information Systems, Internal Control Systems</em><em></em></p>

감사기구와 적극행정: 17개 시 · 도 사전컨설팅제도 운영 성과와 위험요인 분석

감사기구와 적극행정: 17개 시 · 도 사전컨설팅제도 운영 성과와 위험요인 분석

An Evaluation of the Role of Supreme Audit Institutions in Reduce of Audit Failure to Promote Economic Development: The Case of the Federal Board of Supreme Audit of Iraq

An Evaluation of the Role of Supreme Audit Institutions in Reduce of Audit Failure to Promote Economic Development: The Case of the Federal Board of Supreme Audit of Iraq

The Impact of Board Composition on Corporate Dividends Pay-Out: "An Empirical Examination of Industrial Companies Listed in Amman Stock Exchange"

This study investigates the impact of board composition on corporate dividends pay-out of a sample of 30 Jordanian industrial companies listed on the Amman Stock Exchange (ASE) during the period (2007-2017). The study examine the impact of a certain variables that represent board composition (Board size , Independent (non-executive ) director , duality of chief executive officer (CEO) and chairman position , Director nationality , Institutional investors ) .Panel-Data analysis was used to test the empirical model in the current study using a fixed affect model and Random effect model. Relevant data were collected from the (ASE) website and from the annual reports of the sampled companies.The result of the study revealed that there is a negative significant effect between Institutional investors, audit firm and dividend per share (DPS) at the 1% level. Moreover, there is a negative significant effect between Independent director and DPS at the 5% level. In contrast, board of director size and firm profitability positively affect the DPS at the 5% level. Furthermore, Duality of CEO and chairman position, director nationality, firm size and financial leverage were found to have no effect on DPS at the 5% level. Keywords: Board Composition, Corporate Governance, Pay-out, ASE DOI : 10.7176/EJBM/11-27-16 Publication date :September 30 th 2019

Impact of Time Budget Pressure, Locus of Control, Independence, Professional Skeptisism and Audit Judgement on Audit Quality in Indonesian

This study aims to analyze the impact of Time Budget Pressure, Locus of Control, Independent, Professional Skepticism and Audit Judgment on Audit Quality (empirical study of Indonesian Supreme Audit Institution). This study uses primary data and uses a questionnaire for data collection. The sampling technique used was simple random sampling, namely 80 auditors. The method of collecting data uses a survey method by sending questionnaires directly to the respondent and the analytical method using multiple linear regression analysis. The results of this study indicate that time budget pressure has a negative effect on audit quality. Locus of control and independence have a positive effect on audit quality. Professional skepticism, Audit Judgment shows a positive effect on audit quality. Keywords: Audit Quality, Time Budget Pressure, Locus of Control, Independent, Professional Skepticism, Audit Judgment DOI : 10.7176/EJBM/11-27-10 Publication date :September 30 th 2019

The Influence of Institutional Ownership, Leverage, and Audit Committee on Earnings Management: Evidence of Companies Listed on the Indonesia Stock Exchange

Objective – This research aimed to analyze: 1) The influence of institutional ownership to earnings management, 2) The influence of leverage to earnings management dan 3) The influence of audit committee. Design/methodology – Population in this research is entire companies listed on the Indonesia Stock Exchange (BEI) in 2015-2017. Election of the sample with the purposive sampling method and is obtained by the amount of sample counted 194 company. This research used secondary data. The analysis used is multiple linear regression and t-test, to seek the influence of institutional ownership, leverage, and audit committee to earnings management. Results – Result of examination indicate that: 1) Institutional ownership had a significant effect to earnings management, with direction is positive 2) Leverage had a significant effect to earnings management, with direction is negative and 3) audit committee had a significant effect to earnings management, with direction is positive.

PERFORMANCE AUDIT: A CROSS-COUNTRY COMPARISON OF PRACTICES OF SELECTED SUPREME AUDIT INSTITUTIONS

This study aims to present the conceptual framework of performance audits impact that support our investigation of the process of selection performance audit topics at Supreme audit institutions (SAIs) level. The results of the study include the technique for choosing performance audit topics used by the Lithuanian SAI and the SAI of the Netherlands. The data were gathered using case studies and semi-structured in-depth interviews with the field experts. The results of the study demonstrated a range and the complexity of the arguments underlying the selection of the topic for performance audits: there are no mandatory requirements or standards governing the process; therefore, every SAI chooses its own path. Each SAI applies specific performance audit topics selection methods determined by their original long-term practical experience. Selecting right topics for performance audit is a task of crucial importance for each SAI. Gathering information about all areas and making a decision where to perform an audit is an important part of strategic research efforts. Data collection is a lengthy process that takes place throughout the year. Each SAI has a framework for strategic and annual planning that has clearly set deadlines, uses a transparent qualified and/or quantified approach to ranking risks/audit proposals, and is based on the criteria relating to materiality, topicality, feasibility and added value.

Development and Validation of a Readiness for Knowledge Management Implementation Questionnaire (RKMIQ)

The purpose of this study was to identify the psychometric properties of a Readiness for Knowledge Management Implementation Questionnaire (RKMIQ) administered to State Audit Institution (SAI) Employees. This study explored the level of readiness for knowledge management (KM) process implementation in SAI. The dimensional structure of the questionnaire was investigated with a sample of 170 SAI employees (70% males and 30% females). Based on factor analysis results, the questionnaire emphasized sixteen factors categorized in five themes: organization culture, organization structure, information technology (IT) infrastructure, employees’ acceptance of KM, and employees’ intention to be involved in the KM process. The internal consistency and concurrent validity of RKMIQ were verified (Cronbach’s alpha = 0.95). RKMIQ and its factors were significantly correlated with factors influencing the KM initiatives questionnaire (FIKMIQ). Testing of the reliability of RKMIQ using Test-Re-Test method revealed a significant correlation of (0.96) between the two applications. This questionnaire was proved to be relatively reliable and valid. The results showed that SAI is ready for KM process implementation. Since it is essential to assess organizational readiness for KM before embarking on KM initiatives, this study designed an instrument that brings together organizational and human factors influencing the readiness of organizations for KM. The comprehensiveness of the instrument, as well as the degree of validity and reliability that it demonstrated, justifies its adoption to measure the readiness of organizations to implement KM processes.

Sais work against corruption in Scandinavian, South-European and African countries: An institutional analysis

International pressures on Supreme Audit Institutions (SAIs) to fight corruption are increasing. Nevertheless, SAIs lack a clear mandate and may appear ineffective in their anticorruption work. Using an institutional approach, this paper compares the cases of seven SAIs from Scandinavian, South-European and African countries to better understand how these institutions perceive their role in fighting corruption. Our article demonstrates that the way SAIs organize their work cannot simply be explained by the countries' level of corruption. Rather, efforts to fight corruption reflect the ways in which coercive, mimetic and normative pressures interact with institutional logics to guide the SAIs' work. We conclude that the influence of INTOSAI still appears to be limited, and it needs increased institutional recognition if it is to be effective in harmonizing SAIs' work worldwide to fight corruption.

JUDGEMENT STATE AUDITOR ON AUDIT OPINION FOR GOVERNMENT FINANCIAL STATEMENT WITH PERSPECTIVE HERMENEUTIC PHENOMENOLOGY

Background. The Audit Act no 15, 2004 stated that audit opinion is based on 4 (four) criterias, which are accounting standard, compliance on law and regulation, effectivity internal control system and full disclosure. Public accountability quality of financial statement that audited by BPK RI should be based on State Finance Audit Standard (SPKN) and audit system or guidelines to attest the truth and fairness of the judgement. State finance auditor will make audit judgement for audit opinion based on all material of financial statement, not only in quantitative but also qualitative manner of significance financial information as part of public accountability. However, audit process is not only depends on structured standard system approach but also influenced by individual (auditor) subjectivity. Auditor subjectivity is difficult to be avoided during the audit process and may play a role in the audit judgement and final audit opinion.Objective. Our study aims to analyze the role of BPK RI auditor subjectivity during audit judgement in government institution and in making final audit opinion, using interpretive hermeneutic phenomenology.Methods. Our study analyzed audit judgement with interpretive process hermeneutic and phenomenology perspective.Results. We conducted in-depth interviews with BPK audit opinion signing auditors and analyzed how auditor interpreted audit data, in regards with the basic principles of public accountability, audit standard, law and regulation, internal control and complexity organization in the auditee institution. Our study found differences among auditors in interpreting audit data based on different perspective and understanding of standard system, law and regulation and complexity of organization, mostly because they did not use basic principles of public accountability during the process and making audit judgement and final audit opinion.Conclusion. Our results came to understanding that auditors should be using basic principles of public accountability when interpreting audit data, audit standard, law and regulation to improve quality of audit judgement. Auditors of BPK as supreme audit institution in Indonesia should combine all aspects in auditing process and making final audit judgment.Key words : Audit Opinion, Public Accountability, Audit Judgement, Hermeneutic Phenomenology.

Determinants and consequences of environmental investment: an empirical study of Indonesian firms

PurposeThis study aims to examine the effect of institutional ownership, audit committee and types of industry on environmental investment. Furthermore, this research investigates the consequences of environmental investments on firm financial performance.Design/methodology/approachThe sample consisted of 145 companies listed on the Indonesia Stock Exchanges and receiving PROPER awards issued by the Ministry of Environment, Republic of Indonesia in the year 2009-2015. The data were then analyzed using ordinal logistic regression and multiple regression.FindingsThe findings showed that environmental investment was significantly affected by types of industry. However, institutional ownership and audit committee did not influence environmental investment. Finally, the finding indicated that environmental investments positively affected firm financial performance.Research limitations/implicationsThis research only covered companies listed on the Indonesia Stock Exchanges and receiving PROPER awards. Thus, the findings cannot be generalized for all companies in Indonesia and other markets.Originality/valueThis study is the first effort intended to investigate the determinants and consequences of environmental investment which have been ignored by previous studies, especially in the Asian emerging markets. This study at least provides us with two main contributions. First, the findings on determinants of environmental investment can be used by governments in Asian countries, especially Indonesia as a reference in making policies concerning the obligations of companies to the environmental problems. Second, the finding on the relationship of environmental investment and financial performance can be used by companies as strategies to generate profits without destroying the environment.

Linguistic Audit as a Professional Activity

The subject of this research is linguistic (or: language) audit. The term is new and not being widely used so far. Linguistic audit, in particular, is offered as a service of linguistic-consulting agencies’ activities. Modern linguistic consulting, according to the author, is a form of stimulating theoretical and practical development of linguistic ecology, a new branch of applied linguistics, which, in turn, predetermines development of communication ecology as a new direction of integrated humanitarian research. Today, the most representative form of linguistic ecology is linguistic landscape, which, in the space of a certain society, demonstrates the most characteristic visual dialects of that society. Studying visual dialects makes it possible to judge the language situation in a society, the degree of vitality of languages represented in it; levels that its culture, science and education are at. The linguistic landscape has a high level of representativeness as well as a significant impact on the various circumstances of life and activities of a society, including its culture, religion, politics, science, education and even economy. Stability of a particular society as a whole can be determined by the level of linguistic landscape ecology. Linguistic audit is considered by the author from the functional and integrative point of view. Conducted by language means and aimed at studying and evaluating visualized forms of speech activity, linguistic audit (provided its algorithm has been systematically and conceptually developed) can become an effective tool to optimize language and communication ecology. Using the modeling methodology, the author offers and substantiates her own model algorithm of organizing and conducting linguistic audit institutions in the field of restaurant business in Moscow, Russia, to optimize their activities, improve their status and an optimal impact of their names on various aspects of their social interaction.

Role of Axillary Radiotherapy in Patients of Locally Advanced Carcinoma Breast with Inadequate or unknown Lymph Node Dissection Status - An Institutional Audit

Role of Axillary Radiotherapy in Patients of Locally Advanced Carcinoma Breast with Inadequate or unknown Lymph Node Dissection Status - An Institutional Audit

Децентралізація як мотиватор розширення функцій вітчизняного інституту аудиту

Децентралізація як мотиватор розширення функцій вітчизняного інституту аудиту

PENGARUH PENERAPAN GOOD CORPORATE GOVERNANCE, OPINION SHOPPING, KUALITAS AUDIT, DAN AUDIT CLIENT TENURE TERHADAP PENERIMAAN OPINI AUDIT GOING CONCERN AUDITING

The Impact of Good Governance, Opinion Shopping, Quality Audit and Audit Client Tenure Application towards Going Concern Opinion Audit Acceptance (Empirical Studies on Infrastructure Services Company, Utility, and Transportation which Registered at Indonesian Stock Exchange (ISE) during 2013 – 2017 Period). Essay. Tegal: Economic & Business Faculty, Pancasakti University Tegal. 2018. The aim of this research is to finding out the impact of institutional ownership, independent commissioner, committee audit, opinion shopping, quality audit, audit client tenure towards going concern’s opinion audit on infrastructure services company, utility, and transportation which registered at ISE during 2013 – 2017 period. The population in this research are infrastructure services company, utility, and transportation which registered at ISE during 2013 – 2017 period and the sample determination by using purposive sampling method, so within the result obtained 15 company’s samples. The data analysis method used is logistic regression analysis. Based on logistic regression analytic, the research result concluded that institutional ownership (0,109), audit committee (0,429), opinion shopping (0,607), and quality audit (0,998) are not affecting the going concern opinion audit. Meanwhile, the independent commissioner (0,006), and audit client tenure (0,004) are affecting the going concern opinion audit. Keywords: going concern, opinion audit, institutional ownership, independent commissioner, committee audit, opinion shopping, quality audit, audit client tenure