International Auditing Standards Research Articles

A Comparative Analysis of Independent Audit Sectors in Turkiye And Uzbekistan

The independent audit sector consists of independent auditing companies and professionals providing auditing services to businesses and organizations. The sector has a critical importance for developing countries to provide and sustain qualitative operations of enterprises and organizations. A strong independent audit sector helps to improve the operations of entire private sector and hence provides better integration to international markets In this context, due to the importance of the subject, a research on the audit sector is carried out in this study. The main axis of the study is the comparative analysis of the independent audit sectors in Uzbekistan and Türkiye. Since there is no other study comparing these two countries in terms of this sector, this paper tries to make a contribution to the related literature. The study’s central hypothesis is that Uzbekistan has a significant potential to catch international auditing standards. A comparative analysis is conducted for independent audit sector of two counties in order to test this hypothesis

How hours allocated to year-round auditing procedures affect audit quality

PurposeThis paper aims to examine how the allocation of audit hours to the year-round procedures, based on the risk of material misstatements in financial statements, impacts audit quality.Design/methodology/approachUsing a data set on audit hours spent on year-round and year-end procedures, the authors build an empirical model for testing the effectiveness of year-round auditing of Korean public firms during the period of 2014–2018.FindingsThe initial tests do not show that proportionate increases in year-round procedures increase audit quality. However, after the authors control for the risk of material misstatements, the authors find that proportionate increases in year-round audit hours generally increase audit quality, except for high-risk firms where audit quality increases only as year-end hours proportionately increase. For high-risk firms, the results suggest that increases in year-round audit procedures occur at the cost of the essential year-end work. Similarly, except for high-risk firms, the authors find that the allocation of more audit effort to year-round procedures improves audit efficiency.Originality/valueTo the best of the authors’ knowledge, this study provides some of the first empirical evidence showing how a risk-based approach to allocating audit effort over the duration of an audit can impact audit quality and efficiency. Regulatory bodies, such as the International Auditing and Assurance Standards Board and Public Company Accounting Oversight Board, which consider the proper allocation of audit hours as a key audit quality indicator, should find the results useful.

Impact Smart Applications To Enhance The Transparency and Accuracy Of Financial Auditing

The research aimed to analyze the impact of employing artificial intelligence and blockchain technologies in enhancing transparency and accuracy in financial audits.WeeThe research sought to understand how these technologies contribute to improving...ActivitiesAuditing by reducing human errors and enhancing confidence in financial statements.throughData was collected usingQuestionnaire from the research sample, and analysisResults through the statistical programSPSS v 26 and AMOS v 26,The most important conclusions of the research were that applicationsSmart provides the ability to quickly analyze large amounts of financial data, which improves the quality of auditing and decision-makingFinance. WowMRecommendations are a necessityStrengthening cooperation between regulatory authorities and banks to ensure the application of international auditing standards in light of the use of modern technology,The research contributes toAnalysis of the role of intelligent applicationsOhIn improving the accuracy and transparency of financial auditing using advanced technologies.whatHussein audits and detection of financial errorsWhich enhancesConfidence in financial reports by reducing errors and increasing accuracy using smart technology.

The Role of Internal Audit Practices in Improving The Quality of Financial Reporting for Commercial Companies. A Sample of Iraqi Commercial Banks

The research aims to explain the role of internal audit standards in improving the quality of financial reporting for the financial reports of the banks in the research sample. Accordingly, the deductive approach was followed for the theoretical side and the inductive approach for the practical side by employing standards for internal audit standards and their role in achieving quality in financial reporting for the financial reports of the banks in the research sample. The most important conclusions were that standards standards Internal auditing has a role in achieving and improving the quality of financial reporting for the Bank of Sumer first, then the Iraqi Gulf Bank secondly, and the Assyria Bank last. The most important recommendations were to document and confirm the application of the internal audit standards for the Bank of Assyria first and the Iraqi Gulf Bank secondly by virtue of the assessments of appropriateness standards, honest representation and the appropriate timing for presenting the financial statements within Bankers' reports.

Evaluating Audit Oversight Board’s Regulatory Impact: Analysis of Sanctions Imposed on Malaysian Audit Firms

This study analyzes the 12-year trend of cases involving auditor wrongdoing as disclosed on the Audit Oversight Board (AOB) Malaysia's website from 2012 to 2023. Utilizing content analysis, the research examines the nature, frequency, and severity of penalties or sanctions imposed on audit firms for various offenses. Findings indicate a dynamic pattern of regulatory actions, reflecting Malaysia's evolving landscape of audit quality and regulatory oversight. It was revealed that a total of 56 breaches of the Securities Commission Act 1993 involving 30 audit firms were reported and disclosed by the Audit Oversight Board over the period from 2012 to 2023. The findings revealed that most misconduct cases relate to the failure of audit firms to comply with the requirements of International Auditing Standards, International Standard on Quality Control and Malaysian Institute of Accountant By-Laws. There has been a notable decrease in cases involving auditors over the past six years. This could also indicate the dedication of the AOB to monitoring auditors' conduct to prevent their involvement in malpractice. This study contributes to the understanding of audit regulation effectiveness and the behavioral patterns of auditors in response to regulatory scrutiny.

Contributions of internal control to public governance: a study of the perception of internal auditors of federal educational institutions

Purpose: The article aims to analyze the perception of Internal Auditors of Federal Educational Institutions regarding the contributions of Internal Control to Public Governance. Methodology: Regarding the technical procedures for collecting research data, a structured questionnaire (Survey) with multiple choices was used, on a 10 (ten) point scale with alternatives of no agreement/a lot of agreement, with 1 being no agreement and 10 being very agreement. The analysis was carried out using Factor Analysis. Results: As a result of the research, it was identified that the factors: Risk-Based Audit Planning, Transparency, Public Integrity and Accountability, obtained the highest averages as contributions of internal control to public governance in the perception of the responding auditors. Factors such as the Provision of Consulting Services and Society Participation presented the lowest averages among the factors analyzed. After the factor analysis, it was found that the first factor, Adherence to International Auditing Standards, presents approximately 59.7% of the explanatory power of the variances contained in the sample. According to the auditors' perception, adherence or alignment with international auditing standards is representative of the evolution of the governance process in federal public administration. Contributions of the Study: The study contributes to the discussion on public governance regarding the contributions of internal control to its development. The results suggest that the process of adhering to international auditing standards is an irreversible process and recognized as necessary for the development of governance in the federal public sector, given that this adherence to international auditing standards presents itself as a factor with greater explanatory power in the analysis, signaling that for public administration to follow the evolution of its governance, it must remain integrated with international standards and best practices.

Informal Communication: A Path to Success for Internal Auditors

SUMMARY The newly issued 2024 Global Internal Audit Standards recognize the need for informal communication for the first time, highlighting the vital role of informal communication in facilitating effective information flow and building relationships between internal auditors and their stakeholders. Frequent informal communication can significantly enhance the benefits of formal reporting by helping internal auditors gain deeper knowledge of the organizational culture and dynamics, nurture mutual understanding of internal audit work, and take a comprehensive perspective on risk. Drawing upon data gathered through interviews, surveys, and audit committee charters, we find that informal communication between internal auditors and the audit committee plays a pivotal role in obtaining audit committee support and building strong relationships. However, there is a significant gap between current practice and the new guidance for informal communication. We discuss implications of the new standards and offer suggestions to improve informal communication.

A Comparison Study of Risk-based Auditing in Four Developed Countries

Purpose: This study aimed to identify and compare the best practices of a risk-based audit (RBA) approach used in four developed countries. Design/ Methodology/ Approach: A thorough library search and examination of the literature on the RBA approach was conducted. Denmark, Australia, Canada, and the United Kingdom were selected based on their excellent positions in the Corruption Perception Index 2022 ranking. Findings: The four countries adopted the Institute of Internal Audit standards in conducting their RBA. All four countries, except Denmark, used the ISO 31000:2018 as a guidance framework. Furthermore, the four countries used comparable risk determination, assessment, and control techniques. Additionally, the RBA risk governance structure of the four countries is based on the Three Lines of Defence concept. Research Limitations/ Implications: Most of the data were from secondary sources. Only four countries were compared and were selected using only one index. Additionally, the study focused on internal auditing practices as a public governance tool. Practical Implications: The results presented the opportunity for government internal auditors to reconsider and enhance auditing procedures to increase public sector delivery system efficacy. Originality/ Value: This article covers the RBA used by internal auditors in four developed countries. The results could catalyse investigations into the efficacy and best practices of additional elements in public sector governance. Keywords: Risk-based audit, internal audit, public sector, governance, risk management.

A Comparison Study of Risk-based Auditing in Four Developed Countries

Purpose: This study aimed to identify and compare the best practices of a risk-based audit (RBA) approach used in four developed countries. Design/ Methodology/ Approach: A thorough library search and examination of the literature on the RBA approach was conducted. Denmark, Australia, Canada, and the United Kingdom were selected based on their excellent positions in the Corruption Perception Index 2022 ranking. Findings: The four countries adopted the Institute of Internal Audit standards in conducting their RBA. All four countries, except Denmark, used the ISO 31000:2018 as a guidance framework. Furthermore, the four countries used comparable risk determination, assessment, and control techniques. Additionally, the RBA risk governance structure of the four countries is based on the Three Lines of Defence concept. Research Limitations/ Implications: Most of the data were from secondary sources. Only four countries were compared and were selected using only one index. Additionally, the study focused on internal auditing practices as a public governance tool. Practical Implications: The results presented the opportunity for government internal auditors to reconsider and enhance auditing procedures to increase public sector delivery system efficacy. Originality/ Value: This article covers the RBA used by internal auditors in four developed countries. The results could catalyse investigations into the efficacy and best practices of additional elements in public sector governance.

აუდიტორული კომპანიების ფუნქციონალური სისტემა და მართვის თანამედროვე ტექნოლოგიები

The functional system of audit companies can be presented as a unity of those processes, procedures, human resources, infrastructure and devices (including hardware and software) intended to ensure the functioning of audit companies. Issues related to the functional systems of auditing companies are insufficiently covered in the special scientific literature. Thus, the effectiveness of functional systems and the challenges they face remain understudied. The research aims to identify the general framework of the functional system of audit companies and audit procedures in accordance with international audit standards. The auditor obtains reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or other error. According to the research findings, the functional system of the companies is established in the form of certain provisions and modern management technologies, the use of which improves the quality of the audit and enables the identification of opportunities for the use of automation and analytics.

Pengaruh Audit Internal Terhadap Penekanan Resiko Literature Review Artikel Terindeks Sinta

In this qualitative study, it became clear that an evolution towards a higher level of risk-based auditing is absolutely necessary, if internal auditors are to play an important role in risk management. The implementation of effective risk management is the key to the success of a company. This article aims to provide a literature review related to the role of the internal auditor function in carrying out effective and efficient risk management. The explanation of this article can add to the literature related to the role of internal auditors in implementing corporate risk management and can assist company management in selecting internal auditors so that company goals can be achieved. Thus, the company can have an optimal level of risk according to the company's risk appetite. Internal auditors are also required to uphold the professional standards of internal audit in carrying out their duties so as to provide the best guarantee for the company.

The Impact of International Accounting and Auditing Standards on the Quality of Financial Reporting

Objective: This study aims to measure the impact of applying international standards for financial reporting and auditing on the quality of financial reports for a sample of Iraqi joint-stock companies. Methodology: The study goal is achieved by developing a special form to examine financial reports in addition to a special form to examine the reports of auditors and the extent of compliance with the adopted international standards. To achieve the research objectives, a content analysis method was used for the financial reports of a sample consisting of 18 companies listed on the Iraq Stock Exchange distributed across 8 different sectors of activity. Results: Our findings reveal that most of these companies do not adopt international accounting standards and financial reporting, except for the banking sector. Additionally, statutory auditors do not follow international auditing standards, except for those auditing companies that apply international financial reporting standards. Conclusion: The non-compliance to International Accounting and Auditing Standardsfor the most of listed companies could affect negatively the quality and reliability of financial information provided by them.

The Impact of Transfer Pricing on the Company’s Image. Implications in Audit Work

In an economy strongly marked by globalisation, transfer pricing is at the top of the agenda of taxpayers, tax authorities and regulatory bodies, with its influence manifested primarily in the fiscal area, respectively in the correct determination and proper allocation of the corporate tax base between different jurisdictions or between companies operating within the same jurisdiction. However, transfer pricing transcends the fiscal problematic and significantly influences other aspects of a company's life, one of which is the image reflected in the annual financial statements, including cash flows or financial performance indicators, and through their analysis, the investment decisions of potential users of accounting information. Transfer pricing is, therefore, also a reference point in the audit work carried out at the level of companies part of national or multinational groups and involved in significant intra-group transactions, as compliance or noncompliance with the arm’s length principle directly influences the way in which different elements of income, expenses, results, assets, equity or liabilities are reflected or not in accordance with the true and fair view principle and thus, ultimately, the audit opinion. National and international auditing standards provide recommendations and guidance on how to deal with transfer pricing issues as part of audit engagements, reflecting a continuing concern by professional bodies to develop best practices in this area.

Summary on the Development of Accounting and Auditing Practises towards IFRS-IAS/ISA in Jordan: Historical and Theoretical Perspective

In this article, we take a look at the evolution of accounting in the Middle East [ME] region, with a focus on Jordan. We shall examine the major events in this region’s history and see how they relate to the global accounting agenda, changes in the local and international economic landscape, and other relevant developments. Pay close attention to how cultural and historical factors, in addition to worldwide accounting principles, impact the local accounting environment. The adoption of “International Financial Reporting Standards” [IFRS] by MENA nations is examined, along with the reasons and motives behind it, and the effects on the auditing and accounting professions as a whole. This marks a significant milestone in recent history. This article looks at the history of accounting and auditing in Jordan and how it has developed in relation to the International Accounting and Auditing Standards. It also discusses potential future advances in this field.

The Effect of Applying Internal Auditing Standards on The Effectiveness of Internal Control In Service Units: Iraq Case Study

Internal auditing is one of the functions that characterize the economic unit, as some researchers indicated that one year of internal auditing is equivalent to the work of three years of external auditing, Internal audit is an independent evaluation body located within the organizational structure of the economic unit and is considered one of the means of internal control. The researcher recommends the need to give the internal audit function in government institutions and sufficient attention as the basic function that can provide assurance services (financial audit, performance audit or operational audit, rapid response) and advisory services (evaluation services, facilitation services, treatment services) as well as its importance in Improving and strengthening guidance for service institutions.

Comments of the AFAANZ Auditing and Assurance Standards Committee on Proposed International Standard on Auditing 570 (Revised) Going Concern

AbstractThe International Auditing and Assurance Standards Board (IAASB) issued for public comment Proposed International Standard on Auditing 570 (Revised) Going Concern. The Australian Auditing and Assurance Standards Board (AUASB) and New Zealand Auditing and Assurance Standards Board (NZAuASB) also called for comments. The Auditing and Assurance Standards Committee of AFAANZ prepared a submission, based on the findings reported in extant research, informing a number of the questions asked by the IAASB. This technical note presents the formal submission made to the IAASB.

THE GLOBAL INTERNAL AUDIT STANDARDS – OLD WINE IN NEW BOTTLES?

In this paper the authors suggest that the Global Internal Audit Standards (the IIA’s Standards) issued in January 2024 resemble the placing of old wine in new bottles, insofar as they represent a missed opportunity to truly transform rules-driven Standards into principles-based Standards. This co-authored essay provides two perspectives on the revised Standards: although written independently, and originating from different premises, they both arrive at similar conclusions in favor of principles-based Standards. The authors suggest that the prescriptiveness of the IIA’s Standards continues to petrify individual judgment and critical reasoning, narrowing intellectual and moral horizons in modern internal auditing. By following rules, the focus of internal auditors is misguided toward form over substance, encouraging a checklist-based mind-set that diminishes moral agency. The authors therefore advocate principles-based Standards because they tend to encourage the internal auditor to apply abstract concepts to concrete examples. The authors see unexploited potential inherent in the encouragement of individual judgment, especially when entering the pioneering zone of the pragmatic implementation of the IIA’s Standards – a zone characterized by complexity, chaos, ambiguity, and trade-offs, in which internal auditors are compelled to address WHAT IF types of question. Although the two authors converge in their overall conclusion, they offer alternative reasons for their views, and differing (though perhaps not entirely irreconcilable) suggestions for the future. Lenz draws our attention, in our VUCA and BANI world, and in the age of artificial intelligence, to rethink what it means to be human, and to rethink the skills that make internal auditors strong, influential, and effective. He presents the Trust Triangle that places authenticity as an anchor term to the discourse. Effective internal auditors must have strong human skills: he therefore suggests a model with five competence blocks of the most important skills of the effective internal auditor. There is no need for humans who behave like robots. The refined leitmotif of “The Gardener of Governance: Our nature is Nurture” is suggested as purposeful for internal auditing. O’Regan proposes a future focus on the rigorous application of traditional logic to internal auditing. He suggests that such an emphasis on logic might offset the socially-constructed, slippery, and ever-changing knowledge base of internal auditing, thereby facilitating the development of principles-based standard-setting.

Innovation in Audit and Assurance: A Global Study of Disruptive Technologies

ABSTRACT The study at hand develops the Audit and Assurance Value Chain as a structured framework with four categories: accessing information and data, verifying information, protecting information, and assessing internal controls. After development of the Audit and Assurance Value Chain, it was utilized to categorize emerging technologies derived out of investigations of more than 100 technology innovator companies and interviews with 23 organizations comprising audit and assurance practitioners, regulators, associations, and national standard-setters. The study is based on global data coverage to identify emerging technologies that have not been connected to audit and assurance services before, bringing new insights to the field. Additionally, it emphasizes the importance of the International Auditing and Assurance Standards Board convening power and influence in promoting the adoption of emerging technologies. JEL Classification: M40; M41; M42; O30; O32; O33.

Comments on Exposure Draft for Proposed ISSA 5000, sustainability assurance engagements by the Auditing and Assurance Standards Committee of AFAANZ

AbstractThe Exposure Draft for Proposed International Standard on Sustainability Assurance (ISSA) 5000 has been issued by the International Auditing and Assurance Standards Board (IAASB) because there is increasing demand by stakeholders for assurance of sustainability information. Our recommendations include: (i) a more flexible approach to ethics and quality management instead of the requirements for standards that are at least as demanding as the accounting profession's standards; (ii) more differentiation between the requirements for limited as opposed to reasonable assurance and (iii) more cautious use of the term materiality and clearer definitions of the different materiality concepts to avoid potential confusion.

The role of international auditing standards in the system of countering money laundering

Relevance. Countering money laundering is a critical global issue that requires coordinated international efforts. The United Nations and other organisations have developed programs to combat this problem, and International Auditing Standards play a significant role in these efforts. One of the goals of these standards is to prevent the legitimisation of criminal incomes. Purpose. The purpose of the study is to show the role of international auditing standards in the system of countering the laundering of illegally obtained funds. Methodology. The study employs the method of analysis and the historical method to examine various sources and draw conclusions on the role of international auditing standards in combating money laundering. Results. The study identifies and describes the basic principles of international auditing standards and their effectiveness in preventing the legitimisation of criminal income. It highlights how these standards are implemented across different countries and their impact on reducing money laundering activities. The analysis shows that adherence to these standards improves transparency and accountability in financial transactions, making it harder for illegal funds to be integrated into the legitimate economy. Conclusions. The findings underscore the importance of international auditing standards in the global fight against money laundering. These standards serve as a critical tool for enhancing the integrity of financial systems worldwide. The study's insights can aid policymakers and educators in understanding and teaching the significance of auditing standards in combating financial crimes. Additionally, the research provides practical recommendations for improving the implementation and enforcement of these standards to better address the evolving challenges of money laundering. Keywords: money laundering; international relations; crime prevention; auditing