Practice Of Internal Auditing Research Articles

ENHANCING INTERNAL AUDIT QUALITY IN JORDANIAN INSURANCE COMPANIES A COSO FRAMEWORK PERSPECTIVE

This study assesses the efficacy of the COSO framework in improving internal audit quality in Jordanian insurance firms across five dimensions: control environment, risk assessment, control activities, information and communication, and monitoring. Using a 36-item questionnaire distributed among 24 randomly selected companies, the research employs both descriptive and analytical methods, including multiple and simple linear regression through SPSS, on 193 valid responses. Results reveal a statistically significant (± ≥ 0.05) positive impact of the COSO framework on internal audit quality. The findings suggest a high adherence to COSO dimensions among Jordanian insurance companies, indicating a robust foundation for effective internal auditing practices within the industry.

Audit Internal terhadap Kecurangan dan Penyimpangan Keuangan Pemerintah Daerah

This study examines the role of Internal Audit in strengthening local government financial resilience by integrating the concept of financial resilience from various sources. The research found that Internal Audit can contribute to responding to and overcoming financial stresses by improving the effectiveness of internal control, compliance, operational efficiency, and risk management. Internal Audit not only responds to financial pressures, but is also proactive in fraud prevention and financial risk management. The research method used a qualitative case study approach, the research involved 15 internal audit practitioners from various government institutions. The holistic involves in-depth interviews, document analysis, and direct observation to dive into the internal audit practices conducted by respondents. The results show that effective internal audit practices not only have an impact on fraud detection and prevention, but also play a crucial role in improving the integrity of financial reporting and accountability of local governments. However, some obstacles, such as budget, personnel, and technology constraints, may affect internal audit performance. Improvement recommendations include greater investment in technology training, better budget allocation, and increased number of personnel in internal audit.

The Role of Internal Auditors Characteristics in Cybersecurity Risk Assessment in Financial-Based Business Organisations: a Conceptual Review

Purpose: This paper aims to establish a theoretical framework that will enhance the examination of the role of internal auditors in cybersecurity risk assessment in financial-based business organizations. Financial-based business organizations are institutions or companies that render financial services to public and private stakeholders in an economy. It is a powerful sector in the economy of every country. This drive poses a lot of challenges to organizations. Hence, business organizations strategically devised a means to safeguard the integrity, confidentiality, and availability of information. Also, innovation poses many risks and threats to the internal audit function in an organization. Theoretical Framework/Findings: Using the competency and planned behaviour theories (McClelland 1973 and Ajzen,1991), this study disclosed that the task performance of cybersecurity risk assessment by the internal auditor is influenced by the required internal auditor’s characteristics of professional ethics of integrity and objectivity, personality traits, professional skills competency professional knowledge competency and deterrence and rewards to advise the management on the implications of cyber security risk on business organisations for monitoring and mitigations. Methodology: A literature review approach is adopted to highlight the role of internal auditors in cyber security risk assessment in financial–based business organizations. Research Limitation/Implication: This conceptual paper has consequences for the practice of internal auditing. This approach is helpful to academic scholars in testing it out in the real world. This model is helpful to practitioners when evaluating the function of IAs in the cybersecurity risk assessment context. Originality/Values: Earlier auditing-related studies haven't addressed this problem. This study makes an effort to close such a gap and investigate the subject of the internal auditor’s characteristics and cyber security risk assessment among financial-based organizations.

Internal Audit Quality In North Sumatra Government

This study explores the concept of internal audit quality within the context of the North Sumatra Government. The focus is on understanding the factors influencing and contributing to the effectiveness and reliability of internal audit practices in the region. Through a quantitative research approach, data is collected to analyze the key components of internal audit quality and their impact on organizational governance. The study employs a survey methodology, distributing questionnaires to internal auditors, management, and other stakeholders involved in the internal audit processes of North Sumatra Government agencies. The research investigates factors such as adherence to professional standards, competency of internal auditors, independence, and the effectiveness of communication within the internal audit function. Preliminary findings indicate a correlation between internal audit quality and the overall governance and risk management framework within the North Sumatra Government. The study contributes to the existing body of knowledge by providing insights into the specific dynamics and challenges faced by internal audit functions in the public sector. The implications of this research extend to government officials, policymakers, and internal audit practitioners, offering recommendations for enhancing internal audit quality to strengthen accountability, transparency, and organizational performance within the North Sumatra Government. The results aim to inform decision-makers and contribute to the continuous improvement of internal audit practices in the regional public sector.

Budget monitoring, accountability practices and their influence on the efficiency of county health systems in Kenya.

Public Finance Management (PFM) practices influence the attainment of health system goals. PFM processes are implemented within the budget cycle which entails the formulation, execution, and monitoring of government budgets. Budget monitoring and accountability actors, structures, and processes are important in improving the efficiency of health systems. This study examined how the budget monitoring and accountability processes influence the efficiency of county health systems in KenyaWe conducted a qualitative case study of four counties in Kenya selected based on their relative technical efficiency. We collected data using in-depth interviews with health and finance stakeholders (n = 70), and document reviews. We analyzed data using a thematic approach, informed by our study conceptual framework. We found that weak budget monitoring and accountability mechanisms compromised county health system efficiency by a) weakening the effective implementation of the budget formulation and execution steps of the budget cycle, b) enabling the misappropriation of public resources, and c) limiting evidence-informed decision-making by weakening feedback that would be provided by effective monitoring and accountability. Devolution meant that accountability actors were closer to implementation actors which promoted timely problem solving and the relevance of solutions. Internal audit practices were supportive and provided useful feedback to health system managers that facilitated improvements in budget formulation and execution. The efficiency of county health systems can be improved by strengthening the budget monitoring and accountability processes. This can be achieved by increasing the population's budget literacy, supporting participatory budgeting, synchronizing performance and financial accountability, implementing the existent budget monitoring and accountability mechanisms, rewarding efficiency, and sanctioning inefficiency.

Internal Audit Operational Efficiency and Performance of Public Institutions in Rwanda: The Case of Ngoma District

This study aimed to investigate the impact of internal audit operational efficiency on the performance of public institutions in Rwanda, using a case study of Ngoma District. The study aimed to identify the main internal control activities, assess the role of internal audit operations in identifying and assessing risks, establish the effects of internal audit operations on ensuring compliance with laws, regulations, and internal policies, analyze the contributions of internal audit operations in detecting and deterring fraudulent activities, and find out the impact of an effective audit system on operational efficiency. The target population consisted of 120 staff working at the Ngoma District head office in Kigali, with 92 being a sample. Primary data was collected through structured questionnaires and secondary data from Ngoma District reports and online resources. The statistical analysis revealed several strong and highly significant correlations between internal audit operationalization processes and the performance of public institutions. There is a substantial positive correlation between the internal audit processes of File Verification, approval, and Authorization and the institution's ability to detect and assess risks. The study also demonstrates a significant correlation between computer system control measures in the internal audit process and an institution's ability to adhere to legal requirements, regulations, and internal policies. A strong and statistically significant correlation is found between the implementation of backup and file recovery procedures and the prevention of fraudulent activities, emphasizing the importance of data integrity and security in maintaining trustworthiness. Finally, the research reveals a robust and statistically significant association between staff monitoring and the operational efficiency of public institutions, underlining the critical role of accountability and supervision in streamlining processes and resource allocation. These findings emphasize the significance of comprehensive internal audit practices and controls in enhancing the performance, governance, and effectiveness of public institutions in Ngoma district. Keywords: Internal Audit, Operational Efficiency, Public Institutions, Rwanda

Exploring the Internal Audit Practices of Electric Power Enterprises in the Context of the New Economic Normal

In the current economic landscape characterized by a decelerating domestic economy, rising investments, and an extended project construction timeline, power generation enterprises must enhance their internal audit efforts to sustain their competitive edge in business development. Addressing systemic shortcomings methodically and practically can enhance the internal audit effectiveness within electric power enterprises and contribute to the steady enhancement of their production and operation performance.

Influence of Internal Audit Risk Planning Practices on the Financial Performance of SACCOs in the Western Region of Kenya

To better monitor and control risks, businesses may use risk-based internal audit (RBIA) practices. It also increases transparency and honesty in the financial reporting process. The Western Region and Kenyan Deposit Taking Savings and Credit Cooperatives (DT-SACCOs) are the primary subjects of this research. Despite having an audit department in place, some DT-SACCOs encounter difficulties in auditing their operations, such as a lack of audit evidence (too weak or incorrect) that makes it difficult for the auditor to make the proper choice or generate accurate findings. An internal audit that takes risk into account may help a company prioritize its resources where they will have the most impact. This allows the SACCO to boost its financial performance and provide better reporting to its members. This research looked at how risk-based internal audits affected the profitability of DT-SACCOs in Kenya's Western Region. Based on three theories - the Positive Accounting Theory of internal auditing risk planning, the Contingency Theory of risk management, and the Agency Theory of internal audit capacity—this descriptive study was conducted. Fifteen DT-SACCOs in the Western Region of Kenya will be the focus of the study. Primary data was collected from DT-SACCO members, with a response rate of five per SACCO. The data on financial performance was verified using secondary sources of information. Regression analysis shows that risk-based audit planning had a statistically significant effect on the financial performance of DT-SACCOs in the Western area (t = 5.626, p<0.05). The study recommended that SACCO management practice risk-based auditing with adequate planning from all stakeholders to enhance transparency and accountability. Furthermore, the management should ensure there is timely action on audit queries.

The Digital Transformation of Auditing and the Evolution of the Internal Audit

This book discusses the digital transformation of auditing and its impacts on internal audits. It poses the question of whether digitalization significantly impacts internal audit practices and methodologies, information technology/information system audit, IT governance, and risk management. Internal audit, particularly IT audit, addresses corporate strategy and alignment, corporate governance, IT governance, agility, risk management, and compliance

The Role of Internal Auditors Characteristics in Cybersecurity Risk Assessment in Financial-Based Business Organisations: A Conceptual Review

Purpose: This paper aims to establish a theoretical framework that will enhance the examination of the role of internal auditors in cybersecurity risk assessment in financial-based business organizations. Financial-based business organizations are institutions or companies that render financial services to public and private stakeholders in an economy. It is a powerful sector in the economy of every country. This drive poses a lot of challenges to organizations. Hence, business organizations strategically devised a means to safeguard the integrity, confidentiality, and availability of information. Also, innovation poses many risks and threats to the internal audit function in an organization. Theoretical Framework/Findings: Using the competency and planned behaviour theories (McClelland 1973 and Ajzen,1991), this study disclosed that the task performance of cybersecurity risk assessment by the internal auditor is influenced by the required internal auditor’s characteristics of professional ethics of integrity and objectivity, personality traits, professional skills competency professional knowledge competency and deterrence and rewards to advise the management on the implications of cyber security risk on business organisations for monitoring and mitigations. Methodology: A literature review approach is adopted to highlight the role of internal auditors in cyber security risk assessment in financial–based business organizations. Research Limitation/Implication: This conceptual paper has consequences for the practice of internal auditing. This approach is helpful to academic scholars in testing it out in the real world. This model is helpful to practitioners when evaluating the function of IAs in the cybersecurity risk assessment context. Originality/Values: Earlier auditing-related studies haven't addressed this problem. This study makes an effort to close such a gap and investigate the subject of the internal auditor’s characteristics and cyber security risk assessment among financial-based organizations.

Enhancing Accountability and Transparency in the Public Sector: A Comprehensive Review of Public Sector Accounting Practices

This research uses a comprehensive bibliometric analysis to explore the literature on public sector accounting practices and their impact on accountability and transparency. The research used VOSviewer, a bibliometric analysis tool, to visualize and analyze the bibliometric network, revealing patterns of collaboration, influential publications, and key themes. The data collection process yielded 840 scholarly articles from leading academic databases, with a focus on English-language publications in the past decade. The results show six distinct publication clusters, each highlighting significant research themes. Cluster 1 emphasizes innovation and transparency, indicating the relevance of accounting change and performance measurement in public sector organizations. Cluster 2 centers on accounting reform and the adoption of accrual accounting practices, exploring the transition from cash-based to accrual-based accounting in the public sector. Cluster 3 studies forensic accounting and internal audit practices, reflecting the growing interest in fraud detection and risk management in public sector entities. Cluster 4 highlights the importance of information systems and efficiency in public sector accounting. Cluster 5 centers on the pressing issue of corruption in the public sector and the role of audit in combating corrupt practices. Cluster 6 explores the potential application of private sector accounting practices in the public sector. Keyword analysis identified the most frequently occurring keywords, such as "accountant", "public sector reform", "performance", and "service", underscoring their importance in the literature. Conversely, keywords with fewer occurrences, such as "transparency" and "information systems", indicate areas that require further attention and research.

The impact of COVID-19 on sustainability reporting: A perspective from the US financial institutions

PurposeThis article provides the first empirical study on the effects of the COVID-19 pandemic on sustainability reporting in US financial institutions using institutional, stakeholder and legitimacy theories.Design/methodology/approachThe study used the independent sample t-test and Mann–Whitney U test throughout as well as OLS, random effects, fixed effects and heteroskedasticity corrected model to test the impact of the COVID-19 pandemic on sustainability reporting in the US financial sector. A sample from all listed US financial firms was used after controlling for both the Refinitiv Eikon sector classification and the NAICS sector classification.FindingsUsing U Mann–Whitney test and independent sample t-test the study revealed that the average ESG score for the pre-COVID19 period is 53% compared with 62.3% for the COVID-19 period, indicating that the sustainability reporting during COVID-19 is much higher compared with the pre-pandemic period. The findings of regression analysis also confirm that the US financial companies increased their sustainability reporting during the COVID-19 pandemic.Research limitations/implicationsThis study is an early attempt to look at how the COVID-19 epidemic has affected financial reporting procedures, although it is focused only on one area and other entity-related factors like stock market implications, company governance, internal audit practice, etc could have been considered.Practical implicationsThis research offers useful recommendations for policymakers to create standards for regulators on the significance of raising sustainability awareness. The findings are crucial for accounting regulators as they work to implement COVID-19 and enforce required integrated reporting rules and regulations.Originality/valueThe study provides the first empirical evidence on the impact of the COVID-19 pandemic on sustainability reporting, by examining how US financial institutions approach the topic of sustainability during the COVID-19 pandemic and assessing the pandemic's current consequences on sustainability.

Internal Audit Practices and Financial Performance of Public Institutions in Rwanda: A Case of Rwanda Social Security Board

Internal Audit Practices and Financial Performance of Public Institutions in Rwanda: A Case of Rwanda Social Security Board

Effect of Internal Audit on Financial Performance of Commercial Banks Listed in Nairobi Securities Exchange, in Nairobi County, Kenya

The recent collapse of major commercial banks in Kenya, including Imperial and Chase bank, which are currently under receivership, has raised concerns about the effectiveness of their audit practices in ensuring stability and improved financial performance. These failures have put pressure on commercial banks to reconsider how they align their internal audit processes to ensure stability and financial improvement. Consequently, this study aimed to assess the impact of internal audit on the financial performance of commercial banks listed on the Nairobi Securities Exchange (NSE). The study was guided by reliability theory. Using a descriptive survey design, the target population consisted of 10 commercial banks listed on the NSE. The unit of observation included 86 respondents from various roles within these banks, such as senior finance managers, credit managers, operations managers, risk managers, and internal auditors. Both primary and secondary data were utilized in the study. Primary data on internal audit practices were collected through a semi-structured questionnaire employing a Likert-type scale, while secondary data on the financial performance of the commercial banks were obtained from their audited financial reports. The gathered questionnaire data were quantitatively analyzed using SPSS software, incorporating descriptive statistics (mean and standard deviation) as well as inferential statistics, specifically regression coefficients and bivariate correlation, to examine the relationship between the dependent and independent variables. The study's findings revealed a significant relationship between internal audit, asset safeguarding, risk management, compliance with laws, and the dependent variables, which included return on assets, net income, and liquidity. These relationships were evident from the regression analysis conducted. Consequently, the study concluded that internal audit systems have an impact on the financial performance of commercial banks. The study recommends that commercial banks listed on the NSE reassess their internal audit systems and strengthen any identified weaknesses to enhance their financial performance. Furthermore, the study suggests that future research could explore the effects of new banking regulations, such as Basel Accord III, on the financial performance of commercial banks.

The Impacts of Internal Audit Practices on the Quality of Internal Control in Vietnamese Smes

Purpose: This study examines the impacts of internal audit practices on internal control in Vietnamese SMEs. Theoretical framework: This paper employs the three lines of defense model framework to study the impact of internal audit practices on internal control in Vietnamese SMEs. Internal auditing practices were measured by the items listed in the attribute standards and performance standards of the International Professional Practices Framework (IPPF). Internal control quality includes control environment, risk assessment, control activities, information and communication, and monitoring which are provided by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Framework. Design/methodology/approach: We collect primary data using questionnaire. Data collected from the questionnaire is divided into two groups (1) the measurement of the internal auditing practices and (2) the measurement of the quality of internal control system. We then use the Structural Equation Modelling (SEM) to test for the hypotheses related to the relationship between internal audit practices and internal control. Findings: Our results suggest that both attribute standards and performance standards have positive impacts on the control environment, risk assessment, control activities, and monitoring aspects of internal control. Meanwhile, internal audit seems to not influence the information and communication. Research, Practical & Social implications: The study contributes to the literature by shedding light on the impacts of internal audit practices on the quality of internal control in Vietnamese SMEs. Originality/value: This study examines the unique context of Vietnamese SMEs. Ultimately, the framework aims to provide a comprehensive understanding of how internal audit practices impact internal control quality in this specific context.

An Audit of the Infection Prevention and Control Program at a Regional Hospital in KwaZulu-Natal, South Africa

Background: Infectious diseases are the leading cause of death in South Africa. Containment strategy includes infection prevention and control (IPC) programs, microbiological resistance testing, and antibiotic stewardship programs. The current study evaluates the IPC program at the rural regional Port Shepstone Hospital. Objective: To use the Centers for Disease Control and Prevention (CDC’s) IPC tool for acute hospitals to evaluate the infection control program at Port Shepstone Hospital. Materials and Methods: A prospective descriptive study was conducted from February to March 2018 at Port Shepstone Hospital. The study was conducted in two stages. The first stage determined which of the CDC’s core components of an IPC program were operational. In the second stage, in 11 adult long-stay wards, nurses were identified for completion of selected elements of the CDC tool. Results: The IPC at Port Shepstone Hospital practices 10 of the 17 elements of the CDC’s Infection Control Assessment Tool. The highest scoring ward was gynaecology (110/119 (95%)). The lowest was the psychiatric ward, which scored 64/119 (53%). There was a lack of internal auditing practices. Conclusion: Port Shepstone Hospital IPC program is limited as only some of the components are practised. The lack of internal auditing practices is concerning and needs improvement. To achieve the proper application of the IPC program more emphasis needs to be placed on constantly auditing existing practices and giving feedback to staff coupled with relevant training and resource support. This can be facilitated by hospital management allocating resources to IPC audit teams to audit and share findings with departments and develop quality improvement programs.

Factors determining Internal audit quality in some selected banks in Bangladesh

The goal of this study was to identify and analyze the factors that influence the quality of internal audits in a sample of Bangladeshi banks. The study used a combination of qualitative and quantitative research methods and included a sample of banks chosen based on the size and representation of different regions in the country. Data was collected through interviews with internal auditors, management, and regulators, as well as analysis of internal audit reports and other relevant documents. The findings of the study showed that several factors contribute to the quality of internal audits in Bangladesh’s banking sector, including the independence and objectivity of the internal audit function, the expertise and qualifications of internal auditors, the adequacy of resources and support, and the effectiveness of communication and reporting. The study also identified areas for improvement, including the need for greater standardization and consistency in internal audit practices and the importance of aligning internal audit activities with the organization’s risk profile. These findings have implications for internal auditors, management, regulators, and other stakeholders in the banking industry, and offer recommendations for improving the quality of internal audits in Bangladesh.

A risk-based internal audit methodology for Greek local government organizations

Internal audit activities have been expanded worldwide in order to protect local government organizations and, in particular, municipalities. Although several previous studies have examined internal auditing in local government organizations worldwide and provided further development in this area, none of them have developed a methodology for identifying and evaluating the possible risks when preparing an audit plan in municipalities in relation to Greece and elsewhere. This paper aims to address this gap and to ensure the adequate identification, assessment and linkage of the risks that characterize the municipality within the audit universe, leading to the corresponding preparation of an audit plan based on audit priorities. Further, the proposed methodology follows the International Professional Practices Framework and the International Standards for the Professional Practice of Internal Auditing.

Analysis of the Role of Internal Audit in Enhancing Company's Internal Control

This study aims to explore the role of internal audit in enhancing a company's internal control system by examining internal audit practices, perceptions of internal control effectiveness, and the impact of internal audit recommendations. The research employs a qualitative approach, utilizing interviews and document analysis to gather data from participants representing various organizations. Results reveal significant variations in internal audit practices influenced by organizational size, industry dynamics, and regulatory frameworks. Despite these variations, internal audit functions universally serve as guardians of organizational integrity, providing independent assurance regarding internal control effectiveness. Participants expressed diverse perceptions of internal control effectiveness, citing resource constraints, inadequate training, and communication gaps as common challenges. However, internal audit was unanimously recognized as crucial in enhancing internal controls, offering independent assurance and promoting a culture of compliance and ethical behavior. Internal audit recommendations often led to tangible improvements in internal control systems, although challenges related to resource allocation and change management were reported. Theoretical implications highlight the multifaceted nature of internal audit functions and their critical role in organizational governance, while managerial implications emphasize the need for strategic resource allocation, prioritization, and change management initiatives. This research contributes to the understanding of internal audit practices and their impact on organizational effectiveness.

A Risk-Oriented Approach in the System of Internal Auditing of the Subjects of Financial Monitoring

The aim of this research is to generalize the international practice of internal auditing of financial transactions to substantiate alternatives to their rational use by financial monitoring entities in Ukraine. The purpose of the article is to summarize the key changes in international FATF standards and examine the use of a risk-oriented approach by Ukrainian entities in combating AML or CFT. Assessment of audit risk using quantitative characteristics is assumed on the basis of the most commonly used mathematical three-factor multiplicative model. Turning to the EU’s experience is relevant for the global expert and regulators communities given the necessity to consider the best world practices. Summarizing the above provisions of the theory and practice of the risk-oriented approach for Ukrainian SFM allowed for identification of the areas of its practical implementation in the system of internal audit of financial transactions. The presence of an internal audit service will increase the degree of trust that government representatives have in such companies and the likelihood that a mutually beneficial partnership will develop between the parties.