Local Audit Research Articles

Pengaruh Kekayaan Daerah, Jenis Pemerintahan, Dan Kualitas Audit Terhadap Pengungkapan Internet-Based Financial Reporting

<em>This study aims to get empirical evidence related to the effect of wealth, complexity, local government type, and audit quality on the disclosure of internet-based financial reporting (IBFR) local governments in Java. The population is all local government districts/cities in Java in 2018. The sample was selected using purposive sampling method and obtained 102 local governments consisting of 26 local governments that publish their financial reports through its website and 76 local governments do not publish reports finance through the website. The method of analysis used in the study is the logistic regression. The results of this study indicate that the wealth of local government, the complexity of local government, local government types, and quality audits increase the likelihood of disclosure IBFR.</em><br /><em>Keyword: local government, wealth of local government, the complexity of local government, local government types, quality audits, and internet-based financial reporting.</em>

On the Economics of Mandatory Audit Partner Rotation and Tenure: Evidence from PCAOB Data

ABSTRACTWe analyze the effects of partner tenure and mandatory rotation on audit quality, pricing, and production for a large cross-section of U.S. public firms during 2008–2014. On average, we find no evidence that audit quality declines over the tenure cycle and little support for “fresh-look” benefits provided by the new audit partner. Audit fees decline and audit hours increase after mandatory rotation, but then reverse over the tenure cycle. We also find evidence that audit firms use “shadowing” in preparation for a lead partner turnover. These effects differ by competitiveness of the local audit market, client size, and partner experience. When multiple members of the audit team commence work at a new client, the transition appears to be more disruptive and more likely to exhibit audit quality effects. Our findings point to costly efforts by the audit firms to minimize disruptions and audit failures around mandatory rotations.JEL Classifications: J01; J44; L84; M21; M42.

Pengaruh Pendapatan Asli Daerah, Ukuran Pemerintah Daerah, Tingkat Ketergantungan Pemerintah Daerah Terhadap Tingkat Pengungkapan Laporan Keuangan Pemerintah Daerah

This study aims to empirically show the effect of of original local government revenue on local government scope, the dependence level of local government and audit findings against financial statements disclosure of local government. The sample selection uses the total sampling method. Original local government revenue is measured by using the natural logarithm of regional revenue, local government scope is measured by total local government assets in LKPD, dependency level of local government is measured by fund transfers divided by total revenue, audit findings are measured from the results of audits of the Indonesian Supreme Audit Institution on the internal control system of government (BPK). This findings show that the level of local government dependency has positive effect on the level of financial statements disclosure in local government. The findings with the sig value of 0,000 <0.05, and the calculated value of 3.785> tt table 2.006, it can be concluded that the H3 Hypothesis Accepted, and this study can contribute empirically by 28.91%. Meanwhile, the original local government revenue on local government scope variable, size of local government and audit findings do not affect the level of financial statement disclosure. The suggestions for further research are expected to improve the number of research samples and observation year. Moreover, the other variables can be used to measure the level of disclosure , and the data analysis techniques is qualitative using interview method to obtain information about disclosure of financial statement

Does quality of care in hip fracture vary by day of admission?

SummaryThis study investigates if the day of the week a person is admitted with a hip fracture influences the quality of care they receive. We found those admitted Thursday and Friday were likely to obtain poorer postoperative care, indicating a need to optimize services ensuring equality for all.PurposeWe sought to investigate how the day of admission affects the quality of care provided to hip fracture patients according to national standards (The Scottish Standards of Care for Hip Fracture Patients [SSCHFP]).MethodsRetrospective analysis of national cohort data. Data were collected by the Scottish Hip Fracture Audit (SHFA) local audit co-ordinators (LACs) at participating Scottish hospitals on behalf of NHS Scotland and the Scottish Government. Adherence to the SSCHFP included assessment of both individual and cumulative standard attainment as a marker for quality of patient care.ResultsFrom January 2014 to April 2018, 15,351 admissions for hip fracture were recorded. Compared with Monday admission (reference day), patients admitted on a Thursday or Friday had a significantly lower likelihood of achieving the postoperative standards of prompt mobilization (OR 1.77; p < 0.001 & OR 1.48; p < 0.001, respectively); prompt physiotherapy assessment (OR 8.61; p < 0.001 & OR 3.47; p < 0.001, respectively); and prompt comprehensive geriatric assessment (OR 1.88; p < 0.001 & OR 1.41; p < 0.001, respectively). Patients admitted on a Friday or Saturday were less likely to receive the preoperative standards of no delay prior to theatre (OR 1.24; p = 0.001 & OR 1.23; p = 0.002, respectively) and avoidance of repeat fasting (OR 1.22; p = 0.009 & OR 1.22; p = 0.01, respectively).ConclusionPatients admitted on Thursday or Friday were significantly more likely to not receive postoperative care standards than patients admitted on the reference day (Monday). This appears to be related to inequalities in service provision for Saturday and Sunday compared with the rest of the week.

Higher Academic Qualifications, Professional Training and Operating Performance of Audit Firms

This study examines the association between professional training, higher academic qualifications (educational levels) and operating performance of audit firms in Taiwan. We particularly focus on the curvilinear effects of higher academic qualifications on operating performance. We group the total sample into three categories: national, regional and local audit firms. Based on the theoretical framework in industrial economics, we establish a cross-sectional multiple regression equation to test our hypotheses. Both higher academic qualifications and professional training are positively related to the operating performance of audit firms. Professional training moderates the relation between higher academic qualifications and operating performance. Higher academic qualifications exhibit a curvilinear effect on operating performance with a reverse U-shaped relation for the national audit firms and a U-shaped relation for both regional and local audit firms. Due to data unavailability, some factors affecting the audit quality and operating performance are not included in our analysis, such as auditor teamwork, internal control system, operating policies and auditing procedures of audit firms. The findings that higher academic qualifications are positively associated with the operating performance of audit firms justify the educational policy of establishing institutes or graduate schools in accounting over the past two decades. Furthermore, audit firms skillfully exploit employees with higher academic qualifications to improve their operating performance. We are the first to document the moderating effects of professional training and the curvilinear association between higher academic qualifications and operating performance, contributing knowledge to related literature.

A retrospective review of vancomycin dosing in paediatric patients

Background: Vancomycin has antimicrobial activity against most Gram-positive pathogens. Reduced susceptibility of vancomycin to many microbes has necessitated higher target vancomycin trough levels (VTL) of 10-20mg/L. Paediatric dosing algorithms have remained unchanged despite higher VTL targets; increased doses are required. The study outcomes were to assess the impact of new dosing guidelines on VTL, time to target VTL and vancomycin-associated acute kidney injury (vAKI). Methods: A single-centre review assessed 63 vancomycin treatment episodes between Apr-2016 and Feb-2019. Demographic data, treatment duration, daily vancomycin dosing and VTL were collected. Episodes were grouped as high-dose vancomycin (HDV) (≥60mg/kg/day) and low-dose vancomycin (LDV) (&lt;60mg/kg/day). Target VTL was 10-20mg/L. AKI was defined by modified pRIFLE criteria as ≥50% increase in baseline creatinine within 7 days of treatment commencement. The project was registered with the local audit team. Results: Initial VTL were significantly higher in the HDV group (mean 10.4, SD±4.7mg/L; n=20) than LDV (mean 7.9,SD±4.0mg/L;n=43), p=0.0397. Whilst time-taken to reach target VTL was improved in the HDV group (53.5±22.3 hours vs 66.1±37.1hours), this was statistically insignificant (p=0.2675). Paired t-tests revealed no significant changes to baseline creatinine in HDV (p=0.1267) and LDV (p=0.2006). No differences in vAKI incidence between the two groups were noted (p&gt;0.05). Conclusion: Increasing vancomycin dosages improved initial VTL but was insufficient to improve the length of time to reach target VTL. Reassuringly, there was no increase in vAKI incidence with HDV. The study suggests loading doses in paediatrics may be needed to improve time to target VTL.

Capital Market Consequences of Audit Office Size: Evidence from Stock Price Crash Risk

SUMMARYThis study examines the association between the office size of engagement auditors and their clients' future stock price crash risk, a consequence of managerial bad news hoarding. Using a sample of U.S. public firms with Big 4 auditors, we find robust evidence that local audit office size is significantly and negatively related to future stock price crash risk. The evidence is consistent with the view that large audit offices effectively detect and deter bad news hoarding activities in comparison with their smaller counterparts. We further explore two possible explanations for these findings, the Auditor Incentive Channel and the Auditor Competency Channel. Our empirical tests offer support for both channels.JEL Classifications: G12; G34; M49.

The B-MaP-C study: Breast cancer management pathways during the COVID-19 pandemic. Study protocol

IntroductionApproximately 55,000 women in the United Kingdom are diagnosed with new breast cancer annually. Since emerging in December 2019, SARS-CoV-2 (coronavirus disease 2019, COVID-19) has become a global pandemic, affecting healthcare delivery worldwide. In response to the pandemic, multiple guidelines were issued to assist with rationalising breast cancer care. The primary aim of the B-MaP-C study is to audit and describe breast cancer management of patients newly diagnosed with breast cancer during the COVID-19 pandemic against pre-COVID-19 management practice in the UK. The implications of changes to management will be determined and the impact of a COVID-19 diagnosis on the patient’s breast cancer management will be determined. Methods and analysisThis is a multi-centre collaborative audit of consecutive breast cancer patients undergoing treatment decisions during the acute and recovery phases of the COVID-19 pandemic. All patients with newly diagnosed primary breast cancer, whose treatment was decided in a multidisciplinary meeting from the 16thMarch 2020, are eligible for inclusion. Ethics and disseminationAs this is an audit ethical approval is not required. Each participating centre is required to register the study locally and obtain local governance approvals prior to commencement of data collection. Local audit data will be available to individual participating units for governance purposes. The results of the data analysis will be submitted for publication, as well as disseminated via the ABS newsletter and a webinar. All data will be presented at national and international conferences, circumstances permitting. Registration detailsEach participating centre received local governance audit registration.

Research on Application of Big Data in Local Government Debt Audit

While big data provides massive information for auditing work, it also changes the specific requirements of audit procedures. The pressure of economic downward has increased the concealment of local government debt risks in China, hence the requirements for its audit have increased accordingly. This paper combines the method of investigation and theoretical analysis to study the status quo of local government debt. Based on big data, the audit procedure of local government debt is designed in order to provide a reference for actual government debt audit work.

Audit of open pediatric tracheostomies at the University College Hospital, Ibadan

Background: Tracheostomy is the creation of a communication between the trachea and the overlying skin, maintained by a tube. This is done either by an open or percutaneous technique. Anatomical and physiological variation of the paediatric trachea and adjoining structures necessitates finite skills and consistent competence in performing pediatric tracheostomies, lack of which may cause higher mortality and morbidity outcome in tracheostomies in the pediatric age group. Objectives: There are inadequate local data on the outcomes of pediatric tracheostomies; therefore, we conducted a local audit of pediatric tracheostomy to describe our experience. Methods: A retrospective study of pediatric patients who had tracheostomies from June 2011 to December 2017 was done. Results: Thirty‑four patients were identified, all of whom had an open tracheostomy. The age range was 3 weeks to 16 years; M: F ratio was 2.4:1. Indications for surgery were obstructive (88.2%) and prolonged‑assisted intubation (11.8%). Recurrent respiratory papillomatosis, retropharyngeal abscess, and foreign‑body aspiration were the main obstructive causes. Three patients (8.8%) had repeat procedures, and these patients were initially discharged on tracheostomy tube and instructions were given for home care. Conclusion: Despite the evolving local challenges peculiar to clinical practice in developing countries, the outcome of pediatric tracheostomy in our hospital is good. Keywords: Audit, pediatric, tracheostomy

Audit Leadership Diversity and Audit Quality

We examine whether a culture emphasizing diversity in accounting firms, as embodied by the diversity of local offices’ audit leaders, influences audit quality. An organizational culture that emphasizes diverse perspectives and experiences can have a permeating influence on the execution of all local audits. We develop a composite measure of audit partner diversity within offices by capturing and combining variations among the following characteristics: gender, age, religiosity, ethnicity, nationality, and education. Our results indicate that greater diversity among office audit partners is associated with higher audit quality among office clientele, incremental to characteristics of the client, the geographic area, the audit office, and the engagement partner. These findings underscore the importance of an audit office culture that values diversity and provide important practical implications.

Fraud Detection Gap between Auditor and Fraud Detection Models: Evidence from Gulf Cooperation Council

This study investigates an auditor’s fraud detection gap (FDG) in Gulf Cooperation Council (GCC) companies by comparing the result of the fraud detection models (namely the Beneish M-score, Dechow F-score, and Altman Z-score) with an actual of audit opinion given by the auditors. Prior scholars documented that financial models are accurate and important measurements in fraud detection. However, the majority of fraud cases in the region are revealed accidentally which indicates the unclear role of the internal and external auditor. The data consists of 365 companies operated in the GCC for the period from 2015 to 2017 with a total of 1,095 observations. The study found that the success rate of detecting financial statement frauds for Dechow F model is much higher than Beneish M or Altman Z models. The result also indicated that the highest FDG-score results were obtained by the Dechow F model. However, the Beneish M model can detect financial statements’ fraud better for companies associated to local audit firms as compared to international audit firms. Additionally, Big 4 audit firms are associated with a lower FDG in Beneish M model but increase FDG in Altman Z model. Hence, the study supported the inclusion of statistical models, to a certain extent, as an alternative or supplementary method that assisted in making better decision-making for companies within the Gulf States. The regulators, policy maker, and practitioners, mainly the audit firms must concern that the ability to detect financial statement’s fraud can be enhanced by utilizing the appropriate fraud detection model.

Audit Firm’s Characteristics and Assurance Services’ Provision (An Empirical Study)

Abstract This study examines the relationship between audit firm’s characteristics (size, technology level, and industry specialization) and assurance services’ provision in Egypt. The ability of audit firm’s to provide and offer the assurance services is related to audit firm’s characteristics (size, technology level, and industry specialization). The current study adopts the quantitative research approach by the logistic regression model, for analyzing the size, technology level, and industry specialization to assurance services’ provision. The study sample is all audit firms which audit the listed traded companies of all sectors in the Egyptian stock exchange for the period from 2013 to 2017, which are 67 audit firms that include audit firms with foreign partners and local audit firms without foreign partners. Results show that the relationship between level of technology and assurance services’ provision is highly significant. There is a positive relationship between technology level and assurance service provision; using and adopting advanced software packages and audit tools lead audit firms to provide assurance services’ other than audit of financial statements. There is no significance interaction between size and industry specialization of audit firm with assurance services’ provision. The three independent variables were different in value and significance with the assurance services provision.

Evaluating and measuring the internal control system in light of local and international auditing standards

The study aimed to define the theoretical framework for the internal control system in the light of studies, research and recent publications by touching on the concept of the internal control system, its objectives, importance, constituents and types in general, and exposure to the components of the internal control system in light of the requirements and standards of domestic and international auditing related to the internal control system, In addition to studying and evaluating the internal controlsystem in the Circle Erbil Health Department to know the availability of local audit requirements in it and the extent of its compatibility with international auditing standards to identify the shortcomings in this system and determine the most important procedures Take it to avoid it. The study generally tries to answer the following questions: Does Circle Erbil Health Department follow proper internal control procedures?Are the control procedures followed in conformity with the laws, regulations, and instructions, and are they in compliance with local and international auditing standards? The study hypothesis is as follows: There are indicators in the performance of the internal control system in the Circle Erbil Health Department that comply with the auditing standards. To achieve the goals of the research, the descriptive approach was adopted to cover the theoretical aspect of the study and the applied approach in evaluating the internal control system in the Department of Health, Erbil. The study reached many conclusions and suggested many recommendations. Among the most important conclusions reached by thestudy issued by many international bodies and organizations Several standards and guidelines, which touched on the components and elements of the internal control system due to its importance, as studies indicate that a quarter of the international auditing standards addressed aspects related to the internal control system.

Financial Performance of Local Governments in Indonesia

This study aims to identify the effects of local revenue, audit opinion, legislative size, and intergovernmental revenue towards the financial performance of Local Governments in Indonesia. This study uses all districts/cities within the island of Java as a sample. The sample identification uses the purposive sampling method. Secondary data used in this study originates from the report of examination of the local government financial report and the summary of examination published per semester by the national audit board of the Republic of Indonesia. A total of 108 samples were retrieved, resulting in a total of 120 samples. The hypothesis testing was done using the multiple linear regression analysis method. The results of this research show that local revenue, national audit board opinion, and legislative size has a significant relationship on the financial performance of local governments in Indonesia. However, Intergovernmental Revenue does not have a relationship on the financial performance of Local Governments in Indonesia.&#x0D;

The state of IFRS in Africa

PurposeThe purpose of this paper is to appraise existing literature on International Financial Reporting Standards (IFRS) in Africa. It covers all 54 African countries and their membership in regional and international accounting bodies.Design/methodology/approachThis paper uses qualitative research methods, including review and synthesis of a variety of archival materials.FindingsUnlike the numerous variations in IFRS adoption on other continents, IFRS countries in Africa have adopted the standards as issued by International Accounting Standard Board (IASB). However, most countries are slow to implement the ROSC (AA) recommendations for IFRS adoption due to lack of institutional and professional capacity. With regards to the unintended consequences, IFRS adoption has made international professional qualifications such as Association of Certified Chartered Accountants popular in Africa; hence, national accounting qualifications are not attractive to prospective accountants. Similarly, IFRS adoption has created a competitive advantage for the Big4 audit firms because companies in IFRS countries prefer the services of the Big4 to that of the local audit firms.Originality/valueIt is concluded that international organisations that recommend IFRS to Africa, such as the IFRS foundation, IMF and World Bank, should build the sustainable professional and institutional capacity of the countries before persuading them to adopt IFRS, because in Africa, adopting a law is easy but operationalising it has always been the challenge.

U.S. Big 4 and Local Auditors in the China Initial Public Offering Market

This paper examines (1) whether auditor type affects initial public offering (IPO) pricing; (2) whether the effect of IPO pricing is different for clients with different ownership structures. We find that (1) firms being audited by Big 4 accounting firms receive IPO premium while others being audited by local accounting firms do not; (2) Big 4 auditors receive higher audit fees than China’s Top 10 or small local auditors. This paper extends the prior research (e.g., Kumar, P and N Langberg (2009). Corporate fraud and investment distortions in efficient capital markets. The RAND Journal of Economics, 40, 144–172) that reduces agency conflicts between shareholders and manager (by means of better audit quality) and also reconciles corporate misreporting and investment distortions.

The Effects of Local Government Size, Income per Capita, Local Government Wealth and Audit Opinion on the Quality of Internet Financial Reporting Disclosure: Studies in Indonesia

The Effects of Local Government Size, Income per Capita, Local Government Wealth and Audit Opinion on the Quality of Internet Financial Reporting Disclosure: Studies in Indonesia

Co-producing a typology for Green and Blue spaces for a longitudinal, national dataset of Green and Blue spaces

Background with rationaleSpending time in green-blue spaces (GBS) is beneficial for mental health and wellbeing. There are few longitudinal studies, and definitions of GBS differ within academic studies and between policy, practice and research.&#x0D; Main AimQuantify the impact of longitudinal exposure to GBS on wellbeing and common mental health disorders, for a national population (2008-2018) for use in a population-wide natural experiment.&#x0D; MethodsWe co-produced a GBS typology with planners and policy makers at a day-long workshop using validated public participation methods. Using this typology, we built a national, longitudinal GBS dataset created from local government audits and satellite data for 1.4 million homes in Wales, UK.&#x0D; Results produced a nested national typology to define GBS that built on previous academic literature and considered policy and local government planning priorities. The typology differentiated between inland and coastal GBS and facilities available at the GBS e.g. benches, public toilets etc. We created a national, longitudinal dataset of GBS and a cross-sectional dataset of household-level access to GBS for 2018. Access to GBS varied by socio-economic status, urban/rural classification and type of GBS.&#x0D; ConclusionWe worked with policy and planners to produce a typology that will enable us to translate our findings to be used in evidence based policy and planning. We will use the dataset to create quarterly household access to GBS for eleven years (2008-2018). We will link GBS access scores to individual level mental health for 1.7 million people with primary care data and survey data (n = ~12,000) on wellbeing. The results from the wider study will inform the planning and management of GBS in urban and rural environments and contribute to international work on impacts of the built environment on mental health and wellbeing.

Do PCAOB Inspections of Foreign Auditors Improve Global Financial Reporting Comparability?

This study investigates whether PCAOB inspections of foreign auditors affect global financial reporting comparability. Foreign auditors may adjust audit methodologies to address PCAOB inspection findings, which could affect financial reporting of local clients. Exploiting both within- and cross-country variation in PCAOB inspections, we predict and find that non-US-listed foreign companies’ financial reporting becomes more comparable to their US and non-US industry peers after their auditors undergo an initial inspection. However, there is a decrease in comparability compared to local peers whose auditors have not been inspected. Subsample tests suggest that the improvement in comparability is driven by (i) auditors that satisfactorily address deficiencies and (ii) auditors that do not publicly push back against deficiencies. The effects are dampened after local audit regulators begin inspection programs. Overall, our evidence suggests that the PCAOB international inspection program affects audit methodologies of inspected auditors in a consistent way, improving comparability across jurisdictions. The improved comparability implies that the PCAOB international inspection program may unintentionally help meet accounting regulators’ goals of cross-country financial reporting convergence, which potentially promotes efficient cross-country capital allocation.