Audit Function Research Articles

A Matter of Perspective: Mitigating the Outcome Effect in Auditor Performance Evaluations

SUMMARY We experimentally demonstrate that perspective taking improves the auditor performance evaluation process by mitigating the outcome effect and increasing evaluator focus on decision process quality. In a common setting in which a staff auditor exhibits appropriate skeptical behavior that correctly identifies no misstatement, supervising auditors prompted to take the perspective of the staff auditor evaluate the staff’s performance more highly than unprompted auditors—performance ratings that align with ratings provided to auditors who detect a misstatement. Results indicate that perspective taking mitigates the outcome effect by increasing supervisor attention to information cues about the staff’s decision process quality and away from cues about the nondiagnostic misstatement outcome. We also show that perspective taking increases evaluator consensus and reduces the variance in evaluator ratings that often plague performance reviews. Overall, our findings suggest that perspective taking can improve attention to process quality and help align reward structures with desired auditor behavior. JEL Classifications: M40; M42.

UNIQUE CHARACTERISTICS OF INTERNAL AUDITS IN THE PUBLIC SECTOR AND GLOBAL INTERNAL AUDIT STANDARDS

The IIA’s new draft Global Internal Audit Standards™ highlight the public sector’s unique characteristics, which distinguish it from the private sector and affect how the internal audit function does its work. Distinctive issues of the public sectors are reffered to the definition, purpose, governing the internal audit function, managing the internal audit function and performing internal audit services.

ISSUES OF INTERNAL AUDIT DEVELOPMENT

Internal audit receives different interpretations among professionals. Currently the functions of internal audit have expanded so much that they have penetrated into the field of consulting, management and evaluation of business results. As a result, operational, managerial and performance audit functions have been put into practice, which in their objectives are sometimes mixed, cross with each other and give rise to different opinions.
 The article attempts to clarify the scope and objectives of each of the types of internal audit. In particular, the features and unique functions of operational, managerial and performance audits within the framework of internal audit are recorded, emphasizing their development stages and the tools used. The development directions of internal audit are analyzed based on the changing goals of entrepreneurship and the requirements of effective development.
 

Faktor-Faktor yang Mempengaruhi Kinerja Auditor (Studi Kasus pada Auditor Bpk Perwakilan Provinsi Papua)

This study aims to determine the effect of Computer-Aided Audit Techniques, professional training, work experience, and professional ethics on auditor performance (Case Study on BPK Perwakilan Provinsi Papua Auditors). Data collection was carried out by distributing questionnaires to auditors at the BPK Representative of Papua Province as respondents using purposive sampling technique. The analysis technique used is multiple linear regression. Based on the research results obtained, it shows that TABK, professional training, work experience, and professional ethics have a positive effect on auditor performance. This shows that the increasing use of TABK and auditors who often attend professional training and have high work experience and auditors who adhere to professional ethics, the performance of auditors will increase.
 

Development of the Nova Scotia Potential Donor Audit (PDA) Tool and 2020 Historic Performance Database: Lessons Learned From the First 1000 Medical Record Reviews.

Legislation and accountability frameworks are key components of high-performing deceased-donation systems. In 2021, Nova Scotia (NS), Canada, became the first jurisdiction in North America to enact deemed consent legislation and concurrently implemented mandatory referral legislation similar to that found in other Canadian provinces. Frontline financial resources were provided by the government to support the development of program infrastructure, including implementation of means to evaluate system performance. The Organ Donation Program (ODP), in collaboration with other stakeholders, developed a Potential Donor Audit (PDA) tool and database for referral intake and manual performance audits. Medical record reviews of deaths in the year before legislative change were conducted to pilot and revise the PDA and evaluate missed donation opportunities. The NS PDA was piloted on 1028 patient deaths. Of 518 patients (50.4%) who met clinical triggers for referral to the ODP, 72 (13.9%) were referred (86.1% missed referral rate). One hundred sixty-three patients met the NS definition of a potential donor; 53 (32.5%) were referred (110 missed potential donors). Referral consent rates reached 71.7% (n = 38 of 53 approaches). The actualized donation rate reported by Canadian Blood Services was 29.9 donors per million population (n = 34 donors). We documented high rates of missed referrals and missed potential donors before the enactment of mandatory referral and deemed consent legislation. The ODP has intentionally broadened clinical criteria for referral to shift the responsibility of identifying medically suitable potential donors from bedside clinicians to organ donation specialists. Lessons learned from our experience developing a PDA include the importance of early involvement of multiple stakeholders and ongoing modification of fields and workflow based on data availability and utility for clinical, educational, research, and reporting purposes.

Forecasting a satisfactory balance sheet structure as part of performance audit

Subject. The study addresses the problem of formulating a modern concept of audit, which assumes verification of reliability of accounting (financial) statements and assessment of auditee's performance efficiency. Objectives. The aim is to search for tools to assess the going concern assumption, develop models to predict a satisfactory balance sheet structure based on relationship between current liquidity, current asset turnover and profitability. Methods. The study rests on methods of systems and functional-structural analysis. Results. The paper offers a correlation-regression model for predicting the satisfactory structure of balance sheet. It confirms the hypothesis about the existence of relationship between the indicators of current liquidity, turnover of current assets and profitability; proves the possibility of using the assessment of unsatisfactory structure of auditee's balance sheet to conclude that the latter is able to continue as a going concern. Conclusions. The findings can be applied to optimize business processes.

Analisis Peran Lembaga Badan Pemeriksa Keuangan dalam Kemakmuran Masyarakat

This research aims to analyze the role of the BPK in providing financial reports and providing evaluations of state agencies' efforts to optimize community prosperity. Through the use of qualitative systems and strategies for reviewing legislation and literature. The research results show that performance audits are the thing that has the strongest relationship between audits and community prosperity. Performance evaluation is the only test that can guarantee the management of public funds (people's prosperity).

The power from folk monitoring: Leading Officials’ Natural Resources Accountability Audit (NRAA) and corporate ESG performance

This paper investigates the impact of China's Leading Officials' Natural Resources Accountability Audit (NRAA) on corporate Environmental, Social, and Governance (ESG) performance, using its implementation as a quasi-natural experiment. Findings highlight the NRAA's positive effect on ESG performance, primarily driven by increased folk environmental monitoring (FEM). The impact is more evident in firms with higher institutional shareholdings, lower information asymmetry, and within regions with strong legal frameworks. These results align with the NRAA policy's objective of promoting sustainable development and addressing ecological concerns through its positive role in corporate ESG performance.

Penerapan Audit Operasional untuk Efektivitas dan Efisiensi Pengendalian Internal Kas pada Klinik XYZ

This study aims to conduct an operational audit at XYZ Clinic to evaluate the effectiveness of internal controls related to cash receipts and disbursements activities. The research methodology involves data collection through observation, document searches, and interviews with clinic management. Preliminary audit is carried out using the Internal Control Questionnaire (ICQ) to assess internal controls. The results of the ICQ evaluation show an effectiveness of internal controls at 59.34%. Weaknesses in internal control are identified, including the absence of written policies and procedures related to cash, and insufficient supporting documents. Analysis of the findings generates recommendations for improving internal controls in cash receipts and disbursements activities at XYZ Clinic. This research concludes that the company needs to enhance cash management through more structured and effective measures.

Exploring Communication Channel Selection for Enhanced Audit Quality: Internship Student's Perspective

Effective communication is essential for maintaining audit quality and providing assurance over financial information. This study investigates auditors' communication channel preferences and their impact on audit quality in the context of digitalization and changing communication norms. The research aims to address two primary questions: the communication channels auditors prefer and use for audit-client communication, and how the choice of communication channels influences audit quality. The audit quality is measured through audit effort and auditor performance using a descriptive and quantitative research design. The preferred and actual communication channels are categorized as traditional (face-to-face) and technology-mediated (e-mail, instant messaging, phone calls). The findings reveal that while auditors prefer in-person meetings and texting platforms, they mostly use technology-mediated communication during audits, possibly due to factors like the COVID-19 pandemic. The study contributes to a deeper understanding of auditors' communication choices and their impacts on audit quality. It suggests that the complex relationship between communication channels and audit quality needs further exploration, potentially through larger sample sizes and mixed-method approaches. The insights gained from this research can benefit audit practitioners, regulators, and educators in enhancing audit communication practices and quality.

The Influence of Leadership Style, Workload, Compensation and Organizational Culture on Performance of Auditors in National Private Company

Using organizational culture as a moderator, this study seeks to gather empirical data on the effects of pay, workload, and leadership style on auditor performance. This investigation focused on certified auditors. Purposive sampling is used in the process for sample determination. Auditors were given questionnaires to complete, and 100 questionnaires may be processed to create the sample for this study. With the aid of IBM SPSS, multiple linear regression analysis (MLRA) and moderated regression analysis (MRA) are the data analysis techniques used. The study's findings indicate that the performance of an auditor is influenced by workload more so than by the auditor's remuneration or leadership style. Organizational culture, therefore, has limited control over the workload and compensation of auditors. It can, however, attenuate the impact of leadership style on auditor performance.

Pengaruh Etika Profesi, Pengalaman Auditor dan Independensi Terhadap Kinerja Auditor Pada Kantor Akuntan Publik di Kota Medan

This study aims to determine the effect of professional ethics, auditor experience and independence on auditor performance at the Public Accounting Firm in Medan City. In this study the authors used an associative approach, the data source used was primary data. The data collection technique used was by distributing questionnaires to 173 auditors working at the Public Accounting Firm in Medan City. The sampling technique used is saturated sampling. The data analysis technique used to test the hypothesis in this study is Multiple Linear Regression Analysis using Statistical Package for the Social Sciences (SPSS) version 25. The results of this study indicate that 1) Professional Ethics has a positive and significant effect on Auditor Performance, 2) Experience The auditor has no significant effect on the performance of the auditor, 3) Independence has a significant effect on the performance of the auditor, 4) Independence has a positive and significant effect on the performance of the auditor and professional ethics, experience of the auditor and independence simultaneously and has a significant effect on the performance of the auditor.

Driving and Inhibiting Factors for Implementing Audit Analytics in an Internal Audit Function

ABSTRACT Internal audit function (IAF) effectiveness can be improved by embracing Audit Analytics (AA). However, despite its promises, AA implementation remains limited. Although there is research on AA implementation in general, there needs to be an overview of insight into inhibiting and driving factors for internal auditing. This paper examines those driving and inhibiting factors by exploring the literature on AA implementation. The initial search revealed 98 uniquely identified papers. Further filtering and the additional search returned 42 articles, which were analyzed in detail. The analysis resulted in 12 driving and 23 inhibiting factors, grouped into internal, regulation, data, infrastructure, and audit practice categories. The literature shows that IAF encounters multiple and intertwined factors in AA implementation and needs to anticipate those factors. Moreover, AA implementation affects IAF’s parts and stakeholders differently, requiring internal and external collaboration. Building on these insights, we provide recommendations for further research. JEL Classifications: M42; M49; O32.

Quality standards for the management of alcohol-related liver disease: consensus recommendations from the British Association for the Study of the Liver and British Society of Gastroenterology ARLD special interest group

ObjectiveAlcohol-related liver disease (ALD) is the most common cause of liver-related ill health and liver-related deaths in the UK, and deaths from ALD have doubled in the last decade. The...

Analisis Perspektif Auditor Kementerian Keuangan atas Pengawasan Intern Jarak Jauh

The study aims to analyze the perspective of government auditors on the use of remote internal supervision. A qualitative method with a case study approach is used in this study to get an overview of the use of remote internal control in organizations based on the UTAUT2 theory of technology use. Interviews were conducted with several auditors from various levels of Itjen Kemenkeu. The study finds that that the PIJJ method will be used by Itjen Kemenkeu auditors in the future. To maintain and increase the use of PIJJ in the future, the Itjen Kemenkeu needs to consider several factors that support the use of PIJJ, namely expectations of effort, expectations of performance, facilitative conditions, social influence, hedonic motivation, and habits. Organizations can provide training according to competency needs in PIJJ; use technology that is easy to use and user-friendly; promote the advantages and benefits of PIJJ for auditor performance; establishing a reward system for PIJJ's performance; managing organizational policies and culture; and arrangement of assignment teams. The results of this study have implications for the Inspector General of the Ministry of Finance and other government internal auditor organizations. Organizations can anticipate actions that need to be taken to increase the use of PIJJ.

Pengaruh Risiko Perusahaan, Fungsi Audit Internal, Independensi Dewan Komisaris Terhadap Fee Audit

The auditor will charge the audited firm a fee, called the "audit fee," in exchange for doing the audit. the fee charged by the auditor for conducting an audit is impacted by diverse aspects like the intricacy of the assignment, the expertise required to carry it out, the fee structure of the knowledge acquisition program (KAP) and other pertinent professional elements. the objective of this inquiry is to recognize the influence in audit fees on banking sub sector on the indonesia stock exchange between 2017 and 2021 in relation to corporate risk, the internal audit function, independence of the board of commissioners. the population comprises of orporations sub sector banking and indexed at the indonesia stock exchange at some point of the duration spanning from 2017 to 2021. in this research, a purposive selection technique was utilized. twenty company, and data from 100 units on the banking sub sector registered on the indonesia stock exchange were utilized for the sample. quantitative methods were employed for the analysis. the analysis in this paper is conducted through the utilization of eviews 12 software is used for the analysis in this paper. based on the results of this study, it shows that the company's risk. the internal audit function, and the independence of the board of commissioners simultaneously affect the audit fee. while the results of the partial test of company risk and the independence of the board of commissioners have no effect on the audit fee, while the internal audit function has an effect on the audit fee.

Internal Auditing in the Arab World: A Systematic Literature Review and Directions for Future Research

This study provides a systematic review of the literature on internal auditing (IA) research in 17 Arab countries. It focuses on four key aspects, namely the quality and effectiveness of IA, the objectivity and independence of IA, the consequences of IA, and the challenges facing IA in Arab countries in order to provide insights and avenues for future research in this field. Ninety-one (91) articles collected from the Scopus database between 1996 and April 2022 were analyzed in this study. The results show that there has been an increase in the number of studies that discussed IA, especially in the last 6 years. Most of these studies have focused on the quality of IA and its functions. It also shows that Jordan and the Kingdom of Saudi Arabia dominate the literature published so far in terms of the number of studies. Also, most of the studies were based on agency and institutional theory evaluating the various aspect of IA. This study highlights the lack of in-depth qualitative research that allows researchers to challenge the theories developed in the auditing field, add nuances to the existing theoretical framework, and unpack new theoretical directions. Furthermore, the results also show that the IA literature did not contribute significantly to the knowledge of internal audit functions (IAFs) as specified by the Institute of Internal Auditors (IIA). This study contributes to the body of knowledge by determining future research directions and surveys by interested researchers and regulators, including IIA.

Evaluasi Penerapan Pengendalian Internal atas Proses Bisnis Pendapatan Jasa

Revenue business processes are the primary key for a company to generate profits as a financial performance target. In its implementation, it must be supported by a clear internal audit function and accounting information system with an effective level of control in all business processes to produce accurate and quality data or information, as well as increase the effectiveness of the company's operational activities. However, if these factors do not support it, all personnel will work by habit factor, and management will face the risk of loss. This study aims to analyze the condition of PT X’s internal control and aspect that can be improved in optimizing internal control over the performance and reporting of the company's revenue business processes. The research method used is descriptive qualitative with a case study approach at PT X, a container management company, that previous research on this field of business is still limited. The data sources were derived from observation, a series of interviews with the management, and an analysis of internal documents. The results show that there were weaknesses in the procedures for implementing revenue business processes caused by the absence of adjustments to clear and documented recording procedures, unstructured implementation of control activities, and not being supported by an adequate information system. Therefore, this study provides recommendations for corrective actions to optimize the performance and reporting of the company's revenue business processes.

Taro Ada Taro Gau Sebagai Indikator Kinerja Auditor Wanita Di Kantor Akuntan Publik Kota Makassar


 
 
 
 The purpose of this research is to find out how taro ada taro gau is understood as an indicator of the performance of female auditors and to find out how a female auditor carries out performance using the term taro ada taro gau principle as motivation in completing work. This research was conducted from February to April 2023 at the Makassar City Public Accounting Office. The type of data used in this research is qualitative data. The data sources in this research are primary data obtained directly from interviews and secondary data. The results of this research show that the understanding of the taro ada taro gau philosophy among female auditors at the Makassar Public Accounting Firm is proven to mean that each auditor understands and applies and makes the principles held have an influence on the auditor's performance. This is what can be seen in the attitude of the female auditors at the Makassar Public Accounting Firm in carrying out their duties with good self-control as a form of siri. The values ​​of the Taro Ada Taro Gau philosophy as motivation to complete the work of female auditors are carried out well. The internalization of the values ​​of the Taro Ada Taro Gau philosophy can be seen from the formation of the character of a female auditor who speaks well, is friendly and respects others.
 
 
 

Do Chief Audit Executives Able to Influence Real Earnings Management Practices? Evidence from Indonesia

Purpose : This study aims to investigate the relationship between financial expertise and tenure of the Chief Audit Executive [CAE] on real earnings management [REM] practices
 Method : This study uses a sample of 797 observations from companies in the manufacturing sector in Indonesia during the period 2012 – 2019. For data analysis, regression of feasible generalized least squares was used. Data related to financial expertise and tenure of CAE were manually collected from the annual report and financial data was obtained from Thomson-Reuters Database. 
 Findings : The results of this study indicate that CAE with better financial expertise is associated with lower REM. Conversely, this study also indicates that CAE tenure has an association with higher REM. This result is robust by using an alternative REM measurement. By breaking down the indicators of CAE’s financial expertise, namely CAE’s certification, experience in financial positions within/inside the company or outside the company, the results show that CAE certification has the largest effect on REM.
 Novelty : This study contributes to the real earnings management and internal audit literature by demonstrating the importance of attributes possessed by CAEs as leaders of the internal audit function in mitigating REM practices.
 Keywords : Chief Audit Executive, Financial Expertise, Tenure, Real Earnings Management