Internal Control Audit Research Articles

Revisiting the organization of internal financial control and audit at universities

Subject. This article explores the organizational aspects of control activities of universities. Objectives. The article aims to clarify some individual organizational provisions of internal financial control and audit of universities on the basis of a critical assessment of the positions of domestic and foreign researchers, analysis of the current practices of federal institutions of higher education, and the results of the control activities of their founders. Methods. For the study, we used the methods of analysis, grouping, comparison, and generalization. Results. The article clarifies the objectives of the internal financial audit through including in its formulation a provision on the analysis of the quality of financial management of the institution according to the International Standard on Auditing (ISA) 315. It assesses the ways used by universities for internal financial controls and audits, and it analyzes their irregularities in the financial and economic activities. Conclusions. The article concludes that the concepts and organizational frameworks of internal financial control and internal financial audit have not been finalized. Control activities of universities need to be standardized, including the basis of common criteria for choosing the ways of organizing it. The methods used to organize internal financial control and auditing at universities do not comply with the principle of independence.

The Defects and Improvements of the Internal Control Audit in Chinese Universities with respect to the Probabilistic Hesitant Fuzzy Environment

This paper analyzes the survey data and qualitative evaluation information of the internal control audit of some universities directly under the Ministry of Education of China (MEC) by using the principal component analysis. The qualitative evaluation information is given by experts and presented by the probabilistic hesitant fuzzy elements. The analysis results show that the internal control audit system and process are not perfect, the professional knowledge and skills of internal auditors in universities are not very adaptable to internal control audit, and the effectiveness of internal control audit management conducted by external firms is not good. These are the three most serious defects of the current internal control audit in universities. The most critical factors influencing the quality of internal control audit in universities are, in order, the difficulty of rational use of the results of internal control audit by universities, the poor support of the leadership for internal control audit, and the insufficient professional knowledge and skills of internal auditors to conduct internal control audit. Thus, this paper proposes that the optimization suggestions for the internal control audit of universities are to establish and improve their internal control audit system and process to continually promote the application of internal control audit results, to increase the degree of attention of the leadership, and to strengthen the construction of the internal audit teams.

Good Government Governance in The Internal Control System and Audit Opinion

This study wants to describe the impact of the implementation of the internal control system in the Governance of local governance to the audit opinion CPCs local governments achieved with the application of the principles of good government governance as a moderator variable. This study is a descriptive quantitative study that seeks to describe an application of an internal control system to BPK's audit opinion by applying the principles of good government governance as a moderating variable. Respondents in this study were OPD-OPDs in the Banten Province government, Pandeglang Regency Government, and Serang City Government. The data used in the analysis of this research is data that comes from a questionnaire which is then filled in by the respondent. SEM PLS is used as a tool to analyze the data in this study. The results of this study indicate that the implementation of a good internal control system can have a positive and significant impact on the audit opinion of BPK RI. The moderator variable in the application of the principles of good governance is also able to act as a moderating variable, namely being able to increase a positive and significant impact on the Audit Opinion Raihan BPK.

On the Internal Control and Audit of Computer Accounting

Driven by the rapid development of the information age, information technology has been widely used in various fields, especially in the accounting work of enterprises. From the perspective of information risk, the improvement of computer technology and the degree of informationization not only bring the informationization and high efficiency of enterprise accounting treatment, but also bring many risks. In the face of increasingly fierce market competition, in order to achieve better development, we must attach importance to internal control audit, continuously improve work quality and efficiency, and win a longer-term development prospect for enterprises. In the face of increasingly fierce market competition, in order to obtain better development, we must attach importance to internal control audit, constantly improve the quality and efficiency of work, so as to win a more long-term development prospect for enterprises. This paper discusses the internal control audit of enterprises under the condition of accounting computerization, and puts forward the corresponding countermeasures to improve the internal control and audit of computer accounting in Chinese enterprises.

IMPACT OF Internallcontrollonnfraud Preventionnwith Internal Audit As Moderation (Case Study Pt. Indoprismatama)

The purposesof this studyywas to determine the effect of internal control on fraud prevention with internal audit as a moderating variable at PT. Indoprismatama Bandung. The research method used in this research is explanatory. The population in this study is the Finance Division of PT. Indoprismatama Bandung, while the sample obtained through the Slovin formula as many as 90 people. The data collection technique used in this study was a questionnaire. Meanwhile, the analysis method used in this research is moderation regression analysis at a significance level of 5%. The program used in analyzing data using SPSS 25 .. The results of this study indicate that internal control, fraud prevention and internal audit are includeddin the very good category. In addition, the results of research partially and simultaneously show that internal audit can moderate or strengthen theeeffect of internallcontrollon frauddprevention.

The Development and Improvement of the Quality System OF Audit Services in Latvia

Audit activity is a variety of service industries, and cannot be developed independently of the major trends in this area. A strategicdirection in the development of audit is creation of the international market of auditing services with unified rules and standardsregulating audit, and creation of uniform quality criteria. This article examines the concept of quality audit service, analyzes themain problems of legislative and methodological character in the area of external and internal audit control in Latvia, and considersopportunities and ways of improvement based on international experience. The research results can be applied to construction anddevelopment of the systems of external and internal audit control, which will be providing the most reliable information about thestate of business of companies-customers, their performance and prospects for sustainable development. The financial stability ofa company, confirmed by the independent, objective opinion of an auditor, increases the growth of investments, the price of shares,improves the company’s reputation in the financial market and ultimately contributes to the stable development of a region. Keywords: quality system of audit, quality requirements, criteria, internal and external quality control. DOI: http://dx.doi.org/ 10.15181/rfds.v11i3.627

The Importance of Internal Control and Internal Audit in Accounting Audit: An application in Industrial Enterprises Operating in Antalya Province

Son yıllarda teknoloji ve ekonomi alanlarındaki gelişmeler neticesinde işletmelerin faaliyet alanları ve etkinlikleri genişlemiştir. İşletmeler artan rekabet ortamlarında ekonomik problemlerle karşı karşıya olmalarına rağmen sürekli bir büyüme ve gelişme süreci içerisindedirler. Bu rekabet ortamlarında varlıklarını sürdürebilmeleri için işletme varlık ve kaynaklarından maksimum ölçüde faydalanmaları gerekmektedir. İşletme kaynaklarının etkili ve verimli kullanılması, faaliyetlerin yasal ve yönetsel düzenlemelere uygun olarak yürütülmesi, güvenilir mali raporlar hazırlanması amacı ile özel sektör işletmelerinde uygulanan işletme ve yönetim faaliyetlerinin iç kontrol ve iç denetim faaliyetleri ile denetlenerek değerlendirilmesi gerekmektedir. Bu çalışma ile Antalya Organize Sanayi Bölgesinde faaliyette bulunan işletmelerde iç kontrol ve iç denetimin etkili bir biçimde uygulanıp uygulanmadığı anket çalışması yöntemi ile araştırılıp aktarılmıştır. Araştırma sonuçlarına göre araştırmaya katılan 118 işletmenin büyük bir çoğunluğunun muhasebe denetiminde, iç kontrol ve iç denetimin işletme açısından ne kadar önemli olduğunu ve işletmelerin iç denetim ve iç kontrole daha fazla önem vermeleri gerektiğinin farkında oldukları görülmektedir.

Organization of internal control and internal audit: approaches and practices

Organization of internal control and internal audit: approaches and practices

Mandatory Internal Control Audits, Audit Adjustments, and Financial Reporting Quality: Evidence from China

ABSTRACTThis study examines whether audit adjustments are a mechanism that links the effect of mandatory internal control audits (MICAs) on financial reporting quality. We argue that the requirement for auditors to publicly disclose internal control weaknesses exacerbated auditor-client conflicts and that this resulted in auditors being less likely to detect (and correct) misstatements in their clients' pre-audit financial statements. Consistent with this argument, we find significant reductions in audit adjustments following the staggered introduction of MICAs using data from China. We find the reductions in audit adjustments are associated with significant increases in material misstatements following the introduction of MICAs. In contrast, we find that the introduction of MICAs led to a significant reduction in material misstatements among clients that did not experience reductions in audit adjustments. Overall, the two effects offset each other, which explains why financial reporting quality did not improve, on average, following the introduction of MICAs.

MANAGEMENT FEATURES OF THE STATE FUND FOR REGIONAL DEVELOPMENT OF UKRAINE UNDER THE CONDITIONS OF CURRENT CHALLENGES

Abstract. The article summarizes the arguments and counterarguments within the scientific discussion on the resource management of the State Fund for Regional Development of Ukraine (Fund). The main purpose of the study is to assess the effectiveness of resource management of this Fund from the standpoint of improving the effectiveness of state financial support for regional development in Ukraine. Systematization of literature sources and approaches to solving the problem of effective use of state budget funds to finance regional development goals showed that in general there is a positive assessment of the feasibility of the State Fund for Regional development in Ukraine, but there are significant shortcomings and problems in financing regional development measures. The urgency of solving this scientific problem is that being a significant budgetary resource for the implementation of goals and objectives of regional development, the Fund is not used effectively due to improper management. The study of the peculiarities of the resource management of the State Fund for Regional Development of Ukraine in modern challenges was conducted from the standpoint of assessing compliance with national legislation of budgetary discipline, economic and social feasibility and taking into account the following factors: ensuring full compliance with budget legislation of Ukraine; absence of violations of terms of distribution of means of fund; absence of violations in planning, selection and approval of investment programs and regional development projects; directing the established share of Funds resources to the economic development of the regions; timely and full development of resources at the planned facilities; an effective system of internal control over the effective use of budget funds; based on the results of the study, conclusions were prepared. The methodological tools of the study were the methods of economic and statistical analysis, grouping, comparisons, index analysis and factor analysis. The research period is 2016—2020. The article presents the results of the empirical analysis, which showed that there are systemic problems in the organization of resource management of the State Fund for Regional Development. The study empirically confirms and theoretically proves that it is necessary to update the provisions of Article 241 of the Budget Code of Ukraine to determine the resources of this Fund in the amount of at least one percent of the total fund of the State Budget of Ukraine; the distribution of the fund’s funds should take into account territorial differentiation according to the regional human development index; identification of additional criteria for selection of regional development projects that will ensure the achievement of positive economic changes in the regions; organize an effective system of internal control and internal audit. The results of the study can be useful for use in research and in the activities of state, regional and local governments in terms of taking into account the peculiarities of the management of the State Fund for Regional Development in Ukraine. Keywords: state budget, state fund for regional development, management efficiency, investment programs and projects, regional development, financial support. Formulas: 0; fig.: 1; tabl.: 2; bibl.: 22.

Enterprise Risk Management And Internal Audit Model Proposal for Turkish Agricultural Credit Cooperatives

Örgütlerdeki önemi ve fonksiyonu bakımından denetim tartışılmaz bir faaliyettir. Denetimin rolünü gerçekleştirebilmesi için de yerinde yapılandırılmalıdır. Kamu İç Kontrol Standartları doğrultusunda kamu kurumları, riskleri tanımlamak, değerlendirmek ile izlemeye yönelik sistem kurmaları gerekmektedir. Risk belirleme faaliyetleri, kamu kurum stratejilerinin kararlaştırıldığı planlama prosedürlerine entegre şekilde yürütülmelidir. Risk yönetimi örgüt hedeflerinin tutturulmasında ehemmiyet teşkil etmesi ile iç denetim birimlerinin de bu hususta danışmanlık hizmeti vermesi düşünülmektedir. Türkiye Tarım Kredi Kooperatiflerinde denetim faaliyetleri merkez birliğine bağlı müfettişler ile bölge birliklerine bağlı kontrolörler marifetiyle yürütülmektedir. Teftiş, inceleme ve soruşturma konularında bu birimler arasında görev çakışması bulunmaktadır. Bu kapsamda çalışmanın amacı, Türkiye Tarım Kredi Kooperatiflerinde etkin iç kontrol ile iç denetim sisteminin nasıl uygulanabileceğini ortaya koymaktır. Çalışmada ilk olarak, Kurumsal Risk Yönetimi ile iç denetim kavramları açıklanmıştır. Uygulama kısmında ise, gerekli şartları sağlayan risk temelli bir iç denetim süreci için model önerisi sunulmuştur. Araştırma neticesinde Türkiye Tarım Kredi Kooperatiflerinde de Kurumsal Risk Yönetimi ve iç denetim konularında çalışmalar yapılması gerektiği tespit edilmiştir.

Internal Control, External Audit and Corporate Cash Flow Risk

Based on the sample of A-share listed companies in Shanghai and Shenzhen from 2014 to 2019, this paper empirically tests the impact of internal control and external audit on corporate cash flow risk and the interaction between the two in affecting cash flow risk. The results show that high-quality internal control and external auditing can independently reduce corporate cash flow risks, and the two play a substitute effect in this process. The research conclusions expand the impact of the company’s internal and external governance mechanisms on cash flow risks, and are of great significance for companies to effectively use internal and external resources to prevent and manage cash flow risks.

Uloga i značaj interne kontrole i interne revizije u sprečavanju i identifikovanju prevarnih radnji u bankama

Modern banks have a specific role and a whole range of functions of paramount importance, as financial institutions for granting loans, creating loans, mobilizing savings and economic development. In the financial sector, there is a growing number of people who are using increasingly innovative and creative ways of targeting all perceived weaknesses in banks and credit approval systems. The persons committing fraud have become increasingly sophisticated, which means that measures to prevent fraud must be constantly developed to ensure that they are able to deal with the threat. The fight against fraud is crucial for financial services institutions. This article aims not only to briefly describe the role of internal control and internal audit in detecting possible fraud in banks, as profit-oriented organizations in today's complex and highly changing business environment, but also to point out the advantages they have in the more efficient management of bank activities.

Integrated Big Data Audit with Internal Control Audit to Dig up the “Swindlers” behind Social Security Funds Misappropriation

Integrated Big Data Audit with Internal Control Audit to Dig up the “Swindlers” behind Social Security Funds Misappropriation

Is it Better to Kill Two Birds with One Stone? Internal Control Audit Quality and Audit Cost for Integrated vs. Non-integrated Audits

Is it Better to Kill Two Birds with One Stone? Internal Control Audit Quality and Audit Cost for Integrated vs. Non-integrated Audits

Does the Presence of an Internal Control Audit affect Firm Operational Efficiency?

Does the Presence of an Internal Control Audit affect Firm Operational Efficiency?

PENGARUH SISTEM PENGENDALIAN INTERNAL DAN AUDIT INTERNAL TERHADAP PELAKSANAAN GOOD CORPORATE GOVERNANCE

This research is conducted based on the recently viral phenomenon of the Good Corporate Governance issue, yet in reality there is also absence in full realization by state-owned institutions to implement it as the necessity and as its obligation in community service. This proves in several corruption cases which are revealed both in State-Owned Enterprise (BUMN) and Region-Owned Enterprise, especially in Bandung. The aim of this research is to identify the influence of internal control and internal audit to the implementation of Good Corporate Governance both directly and indirectly in BUMN and BUMD in particular in Bandung. This research uses the population of BUMN and BUMD in Bandung as many as 18 enterprises which consists of 14 BUMNs and 4 BUMDs. The method used for this research is analytical description with path analysis system. The results of this research show that the implementation of internal control and internal audit systems in BUMNs are significantly better than in BUMDs. This condition is caused by the rule of Good Corporate Governance binding the BUMNs to apply its organizational management better than in BUMDs. It also proves in statistical result that shows that internal control and internal audit systems have positive effects on the implementation of Good Corporate Governance. Directly, internal control system affects positively for 61.4%, while internal audit system does for 19.2%. Indirectly, both internal control and internal audit systems affect 80.6%. From this results showed, it can be concluded that internal control system in an organization supported by the efficiency of internal audit function will result in the satisfactory implementation of the Good Corporate Governance in the organization.

Does internal control quality improve earnings persistence? Evidence from China's a-share market

l We examine whether the improvement of internal control quality can enhance the earnings persistence after mandatory disclosure of internal control self-evaluation and internal control audit in China's listed companies. We aim to see the economic effect of this policy. l For a more detailed analysis, we first divide the accounting earnings into cash flows and accruals, then we group the whole sample by ownership structure —— SOEs and Non-SOEs. l We build the internal control quality comprehensive index from the view of external investors. So only the internal control quality data which can obtained from public is chosen in our modeling. l Not surprisingly, the impact of internal control quality on accruals persistence is stronger than that on cash flows persistence. Investors believe that comparing with cash flows, accruals is easier been manipulated by management. So, higher internal control quality can better improve accounting estimates accuracy and enhance the accruals persistence. l What surprising us is that the improvement of internal control quality makes accruals for SOEs more sustainable, and makes cash flows more persistence for non-SOEs.

Archival Evidence on the Audit Process: Determinants and Consequences of Interim Effort*

ABSTRACTUsing proprietary data from a global accounting firm, we investigate the determinants of auditors' interim effort as well as the impact of interim effort on audit quality, client disclosure timeliness, audit hours, and audit fees. Public statements from accounting firms and regulators suggest various benefits from accelerating auditor effort, but these claims remain largely untested. We find that interim effort is higher for large, complex clients that require integrated audits of both financial statements and internal control over financial reporting. With respect to consequences, we find that allocating relatively more work to the interim period is associated with a reduced likelihood of late 10‐K filings, decreased total audit hours, and higher fees. Although increasing interim period effort is not, on average, associated with a reduced likelihood of misstatement, we do find that current period material weaknesses are less likely with greater interim work. Thus, greater interim effort appears to facilitate the remediation of internal control deficiencies before year‐end. We also show that the benefits of increased interim period effort allocation are much stronger—including improved audit quality—when manager and partner interim involvement is high. Overall, our study provides important new insights on audit production and highlights benefits of reduced hours for auditors, earlier identification of control deficiencies for clients, and more timely financial reports for investors.

The Internal Control System as a Management Function and the Element of Integrated Reporting Financial Statements

The present article is devoted to one of the most urgent problems of financial accounting organization and preparation of accounts – the issue of implementation of internal control in the companies. The authors consider the internal control as a function of management in interrelation with internal audit and risk management. The purpose of the research is to determine the level of information disclosure about the internal control system in the company's reporting. The research subject is the industrial and economic activity of chosen companies. Public integrated reporting is the object. The authors set out the following tasks in the research process: to estimate the degree of study of the problem; to analyze public reporting, including its structure, different report forms, the content of Explanatory Notes to the reporting and the working documents; to compare the reporting of various companies; and to identify the degree of information disclosure. The methodology of the research suggests an analysis of existing studies in the field of internal control, visual analysis of internal documents of the companies and their reporting and comparative assessment of reports of some companies. The authors study public accounts of the major companies, consider it from the view of completeness of disclosure of information about the internal control system, draw conclusions and give recommendations on improvement of control procedures. The authors justify that the two concepts of internal control and internal audit are not the same. However, the management of some companies does not separate them. The authors prove that internal auditing is only a part of the internal control system.