Role Of Audit Research Articles

The Role of External Auditor in the Adoption of Computer-Assisted Audit Techniques with Unified Theory of Acceptance and Use of Technology: An Empirical Study in Public Audit Firms in Jakarta

The research aimed to analyze factors that influence acceptance of Computer Assisted Audit Techniques (CAATs) among external auditors in Public Audit Firms in Jakarta. The Unified Theory of Acceptance and Use of Technology (UTAUT) approach was used for this analysis. Technological advancements had an effect on auditors' ability to adopt audit software. However, it had been found that there was no preparation or openness from auditors, leading to suboptimal utilization of audit implementation software and affected the presentation of audit information. This investigation adopted a quantitative method by distributing close-ended questionnaires to external auditors in audit firms in Jakarta. Data were analyzed using Partial Least Square with SmartPLS Ver 3. The results show that social influence affected behavioral intention of external auditors in Jakarta in adopting and using CAATs. Expectancy performance, effort expectancy, and facilitating conditions do not affect behavioral intention of external auditors in adopting and using CAATs. The research generates contributions that can be further directed toward the development of auditors’ competencies in optimizing technology in audit.

EMPIRICAL STUDY FOR THE STRATEGIC ROLE OF INTERNAL AUDIT IN DEDICATING FRAUD RISK IN THE FINANCIAL STATEMENT: EVIDENCE FROM IRAQ

An audit is a regular and systematic process to collect and impartially evaluate evidence of management claims in relation to economic activities and events to determine the extent to which these claims comply with predetermined criteria and to report results to stakeholders. The study aims to know the strategic role of internal audit in detecting the risks of financial fraud, in addition to identifying the basic concepts of internal auditing and the types of fraud risks in the financial statements, and clarifying the role of the internal auditor in detecting the risks of financial fraud, by knowing the impact of the planning process and professional skepticism and understanding The work environment and its contribution to support the internal auditor in detecting fraud risks in the financial statements, and the study concluded that the internal auditor when developing an audit plan, must develop an integrated vision of the effectiveness of governance and risk management, which contributes to reducing the risks of fraud in financial information. In addition, he should consider the institution's evaluation of fraud risks and may evaluate the company's fraud detection abilities on a regular basis. The ability of the internal auditor to continuously assess the potential risks resulting from the work environment helps in discovering the risks of fraud in financial information, in addition to the internal auditor's knowledge of the nature of the work environment in which he works helps to know the risks and detect financial fraud. The internal auditor should identify the potential effects of fraud and discuss the matter with the appropriate level of management, whom management decides to initiate a full investigation and this is achieved through the professional skepticism of the auditor.

The impact of the role of internal and external accountants on taxpayer compliance moderated by good corporate governance

This study examines the impact of the roles of internal and external accountants on taxpayer compliance in moderation of good corporate governance. This study uses explanatory research with a quantitative approach. The population for this study was corporate taxpayers registered with the KPP Masuk Bursa Company (PMB) for the 2018–2020 fiscal year. Purposive sampling was used in this study, and the sample size was 78 companies’ data. Moderated Regression Analysis (MRA) was used to analyze the data. Techniques for collecting data include literature research and documentation. The Statistical Package for Social Science (SPSS) analyzed the data. The findings of this study indicate that the role of internal accountants, as proxied by the timeliness of financial report submission, has a significant positive effect on corporate taxpayer compliance. In addition, the role of external auditors, as represented by audit opinion, has a significant and positive impact on taxpayer compliance. Furthermore, GCG can moderate or strengthen the impact of internal and external accountants on taxpayer compliance. The position of internal accountants and the role of external accountants can both improve corporate taxpayer compliance.

The Leader Medical Audit in Hospital Routine Resource

The 2017 annual review in several health sectors highlighted the importance of medical auditing, based on the analysis of accounts, extensions with pertinent discussions between external and internal auditor, concurrent audit, using medicine based on evidence to reduce costs and guarantee the quality of services provided. The article is justified by the scarcity of academic studies that link Health Economics with the implementation of internal audits, as it is a subject little explored by scientific research yet. The study consists in bibliographic research on the most recent publications that address the theoretical and practical concepts related to the implementation of Strategic Sourcing programs in the field of health in large hospitals of high and medium complexity. It is necessary to define the role of the health auditor as the professional who will help managers to see the medical bill based on the value in health and not only in the cut in hospital expenses. Studies of the possible outcomes aimed at comprehensive health care, auditors are required to control costs. This information helps in the search for the most effective way to meet specific needs in terms of service, focusing on maximising human and material resources available.

THE IMPACT OF AUDITOR EXPERIENCE AND COMPETENCE ON AUDIT QUALITY WITH MODERATING ROLE OF AUDITORS ETHICS: EVIDENCE FROM IRAQ

The purpose of this research is to examine the moderating role of auditors’ ethics on the relationship between critical factors (experience and competence) and audit quality. To achieve the objectives of the research, the researcher conducted tests to determine the relationship between research variables through literature review and direct survey of auditors. Primary data obtained through questionnaires and data analysis. A 91-questionnaire survey chosen as samples from auditing and accounting offices in Iraq. This study based on the descriptive analytic approach. In this research, the relationship between the research variables investigated through 32 questions. The hypotheses tested by using the statistical software SPSS 28 and smartPLS4. The results show that auditor experience and auditor competence have a positive influence on audit quality. In addition, auditors’ ethics play moderating role on the relationship among the factors (auditor’s experience and auditor’s competence) and audit quality.

Determinants of auditor's ability to detect fraud with professional skepticism as moderation at the inspectorate general of the ministry of public works and public housing

The high number of fraud cases in Indonesia has caused huge losses. When fraud cases are disclosed by external parties, what often becomes the public spotlight is the failure of the internal auditor's role in detecting fraud. This study aims to examine the factors that influence the auditor's ability to detect fraud. The data used in this study is primary data sourced from the auditors of the Inspectorate General of the Ministry of Public Works and Public Housing (MPWH) with a total sample of 117 respondents. Data was obtained through a closed questionnaire. The sampling technique is random sampling. The analysis technique in this study is to use Moderated Regression Analysis (MRA), including the t-test and R2 test. The results of the analysis show that competence, independence, and whistleblowing have a positive and significant effect on the auditor's ability to detect fraud. The moderating effect of professional skepticism can strengthen the effect of competence and independence on the auditor's ability to detect fraud. On the other hand, professional skepticism does not moderate the effect of whistleblowing on the auditor's ability to detect fraud.

SME clients evaluation of audit quality: the roles of auditors' communication effectiveness, rapport and social capital

PurposeThis study examines how professional service firms' communication effectiveness (affiliative communications style, social dialogue and information provision), social cognitive capital and rapport established between an auditor and SME client are instrumental in influencing the latter's evaluation of the technical quality of an audit.Design/methodology/approachThe study combines qualitative and quantitative methodologies to create a cross-sectional survey covering four geographic regions in an emerging economy – Thailand. The authors examine the hypotheses by employing social interaction theory.FindingsA study of 744 SME executives plus post-survey interviews with three audit partners revealed that an affiliative communications style and information provision are positively associated with the rapport developed between financial auditor and client, and that rapport, in turn, had a strong association with client perceptions of audit quality. In addition, affiliative communication style, information provision and social cognitive capital had a direct (positive) association with perceptions of audit quality. The effects of communication effectiveness and social cognitive capital varied, depending on whether or not the SME client possessed formal accounting qualifications.Originality/valueThe study contributes to the literature on the business-to-business professional services, and accounting in particular, by explicating the important roles of communication effectiveness, rapport, and social cognitive capital in the relationship between an auditor and a client. Moreover, the paper reveals that the differences in educational background of clients result in differential impacts of communication effectiveness and social cognitive capital on rapport and perceptions of audit quality.

The Influence of Technological Factors on the Computer-Assisted Audit Tools and Techniques Usage during COVID-19

There is minimal level of use of Computer-Assisted Audit Tools and Techniques (CAATTs) in developing nations regardless of its importance to audit productivity and cost reduction, and this holds particularly true in the public sector entities’ internal audit departments. Accordingly, this article aims to explore how technological factors, such as relative advantage, complexity, compatibility, observability, and trialability, contribute to the use of CAATTs in Jordan’s public sector internal audit during the COVID-19 pandemic and the impact of the pandemic on the profession’s outcome. The study also seeks to evaluate how the use of these tools affects the effectiveness of internal auditing, with the IT knowledge of the auditors serving as a moderating variable. This study used 91 usable responses from the internal audit managers of Jordanian public sector institutions. The study used the Diffusion of Innovation (DOI) theory to develop the proposed research model. Using Partial Least Squares Structural Equation Modeling (PLS-SEM), the study result indicated that technological factors, with the exception of complexity, had a positive and significant effect on CAATTs use in the public sector internal audit departments. Based on the findings, using CAATTs has a positive and significant effect on internal audit effectiveness and IT knowledge has a positive moderating effect on the relationship between CAATTs usage and internal audit effectiveness. Owing to the public sector significance to the economy of Jordan, the findings have implications for the internal audit profession, regulators, and decision-makers in proposing new legislation and regulations when it comes to internal audit. Further, through the lens of the social implications, this study proposed that CAATTs usage in public sector institutions can positively improve their capability to reach the role of internal audit in protective public funds and limiting corrupt practices in the public sector. The paper contributes to theory by providing insight into the effect of factors on the use of CAATTs in the public sector of Jordan. This study, to the best of the author’s knowledge, is the first study that has tackled the moderating role of auditors’ IT knowledge on the CAATTs use–internal audit effectiveness relationship in the public sector context.

American Accounting AssociationThe Joint Role of Auditors’ and Auditees’ Incentives and Disincentives in the Resolution of Detected Misstatements

Views Icon Views Article contents Figures & tables Video Audio Supplementary Data Peer Review Share Icon Share Facebook Twitter LinkedIn Email Tools Icon Tools Get Permissions Search Site Cite View This Citation Add to Citation Manager Citation Stephen Kwaku Asare, Joost P. van Buuren, Barbara Majoor; American Accounting AssociationThe Joint Role of Auditors’ and Auditees’ Incentives and Disincentives in the Resolution of Detected Misstatements. AUDITING: A Journal of Practice & Theory 1 May 2023; 42 (2): 231. https://doi.org/10.2308/AJPT-2023-035 Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex toolbar search Search Dropdown Menu toolbar search search input Search input auto suggest filter your search All ContentAUDITING: A Journal of Practice & Theory Search Advanced Search

Auditor Assignments and Audit Quality

AbstractGiven the important role of individual auditors in the audit process, appropriate staffing is an essential issue in audit firms. Using unique audit data for both listed and private companies in China, we define the downward mismatch between auditors and clients as an inappropriate assignment of the engagement auditors who are supposed to serve only private companies, but sign the audit reports of public companies. We find that the downward mismatch leads to poor audit quality. The results are robust to various tests, including using alternative proxies, adopting the Propensity Score Matching (PSM) procedure, and controlling for auditor–client fixed effects and audit firm‐level mismatch. Additional analyses reveal that the negative effect of downward mismatch on audit quality is less pronounced for audit firms with more education and training expenditures, with more informatisation expenditures, and with more partners available. Moreover, this negative effect is more pronounced when clients’ business is more complex. Our findings shed light on the importance of staffing assignment decisions within the audit firm.

Roles of Auditor in Combating Money Laundering: A Concept Paper

Money laundering is the process of obtaining huge sums of money through unlawful means. It is a significant financial offence committed by white-collar criminals. This study's primary purpose is to evaluate the responsibilities of auditors in preventing money laundering. The research is conducted in Malaysia because financial crime has been documented there. It elaborates on the auditors' tasks in terms of their expertise and independence. This concept paper's technique is a literature review through framework and research. Internal auditors, forensic auditors, and the Anti-Money Laundering Act (AMLA) play a crucial part in putting a stop to this crime, as recommended in the concept paper. In conclusion, these findings contribute to the identification and prevention of money laundering.

The role of auditors and banks in the tax aggressiveness of private firms

This study examines the role of auditors and monitoring banks in the tax aggressiveness of private firms. We use a unique data set of private small and medium‐sized entities (SMEs) in Finland where book–tax alignment is high and the auditing of private firms (exceeding a low threshold) is mandatory. We add to the existing literature by investigating the auditing of small private firms and using more detailed measures for bank monitoring. Our results suggest a positive association between tax aggressiveness and audit quality, implying that auditors play a greater role in providing tax‐related planning services than restraining tax aggressiveness. Furthermore, bank monitoring is positively associated with tax aggressiveness. This is consistent with lending banks being more interested in cash savings than reducing tax aggressiveness. Finally, we find no evidence of a joint effect of auditing and bank relationships. These results will interest the owners and managers of private companies, tax authorities and banks and the accounting and auditing profession.

Role of Auditors in Reducing Effects of Money Laundering: Concept Paper

Money laundering has always been an issue not only to Malaysia but also around the world. Generally, the Government of Malaysia has enacted the anti-money laundering act as required by the Financial Action Task Force (FATF) in response to combating the money laundering issue. This paper ascertains the roles of auditors in reducing the effect of money laundering in terms of economic, social, and politic. By having the understanding, the recommendations are proposed to reduce the effect of money laundering and at once mitigate the money laundering activities through the job scope of auditors. Therefore, this study is focused on the roles of audit committees, internal auditors, and external for understanding to prevent money-laundering activities. This study also refers to International Auditing Standard; Section 600, 610, and 620. Additionally, this paper provides awareness to the reader on how money laundering could affect the country's sustainability through the economic, social, and political aspects.

FRAUDULENT PRACTICES AND BLOCKCHAIN ACCOUNTING SYSTEMS Authors Umesh S. Mahtani

Double-entry accounting has been used globally for the past six hundred years and has become the base for all corporate financial reporting. Blockchain technology with distributed ledger now provides a new method of accounting termed “triple-entry accounting”. This method consists of recording and storage of business transactions, as a third entry on the blockchain. This third entry is expected to deliver a system that is trustworthy, immutable, and transparent. This study conducts a detailed review of the present literature on triple-entry accounting with blockchain technology and its impact on fraudulent practices. The review shows current literature has limited information on how this methodology will deter financial and accounting fraud. Drawing on the case studies of twenty-four companies involved in fraudulent practices globally, this paper describes common practices in manipulating financial statements, falsifying accounting records, and fraudulent banking transactions. The study explains the mechanics of how these practices can be prevented using triple-entry accounting in the blockchain environment and how the technique will bring about changes in the audit process and in the roles of internal and external auditors in the organization. The study recommends research propositions focused on governance and financial performance of a company when this method is adopted.

Determinants of the Quality of Financial Reports

Purpose: This study aims to determine the effect of the internal control system, information technology, applying of accounting standards, human resources competence, and the role of internal auditors on the quality of financial reports of local governments. Theoretical framework: Internal control system, information technology, applying of accounting standards, human resources competence, and the role of internal auditors affect the quality of financial reports. According to the agency theory, the quality of financial reports improves government performance and increasing accountability by reducing the information asymmetry. Additionally, under the agency theory approach, transparency and information are useful in controlling managers and making them responsible for their decisions, as well as overall organizational performance. Design/Methodology: The sample in this study was 126 respondents who were obtained using purposive sampling technique from the financial management and accounting officials of Kendari City, Southeast Sulawesi Province, Indonesia. The analytical method used is multiple linear regression analysis. Findings: The results support the agency theory and found that the internal control system, information technology, applying of accounting standards, and the role of internal auditors had a positive and significant effect on the quality of financial reports of local governments. Meanwhile, human resource competence has a positive but not significant effect on the quality of financial reports of local governments. This shows that the better the internal control system, information technology, applying of accounting standards, and the role of internal audit, the quality of local government financial reports will be better. Research, Practical & Social implications: This study can fill gaps in the results of previous research and helps to provide useful information for local governments in improving the quality of financial reports as an important part of efforts to increase transparency and accountability in the management and reporting of local government finances. Originality/Value: The findings suggest several consequences for the fields of public sector accounting and government governance. Additionally, recent empirical evidence shows that the implementation of accountability in many developing countries, including local government in Indonesia has not yet reached general standards and mainly focuses on compliance with applicable regulations, that this study aids in resolving by examining the factors that determine the quality of local government financial reports.

Internal Audit's Role in Minimize Credit Troubled

This study aims to analyze the role of internal audit in minimizing non-performing loans. The location is at PT. Bank Rakyat Indonesia Lumajang Branch Office. Using a descriptive research approach, it was found that: first, internal audit plays an important role in minimizing non-performing loans by providing assessments, recommendations and improvements to the non-performing credit process. Thus, the non-performing credit process can be more convincing, because it has gone through several stages of auditing; Second, the role of internal audit in minimizing non-performing loans is quite effective. This can be indicated by the non-performing loan ratio at the end of 2021 reaching 5.00% in accordance with applicable regulations.

Internal Audit's Role in Minimize Credit Troubled

Internal Audit's Role in Minimize Credit Troubled

Knowledge sharing via common auditors: evidence from corporate R&D investment

PurposeDespite the importance of research and development (R&D), information on its value is not readily available to managers. This study aims to explore the role of common auditors, who audit multiple peer firms in the product market, in clients’ R&D investment decisions. This study highlights common auditors as information intermediaries who affect corporate R&D investment, focusing on the importance of knowledge resources in R&D investment and the limited ability of peers’ public information to communicate the value of R&D.Design/methodology/approachThis study employs pairwise data of firm-peer-year observations to identify a common auditor who provides audit services to the focal firm and its peer firm. This study examines how a firm’s R&D investment changes when the firm’s incumbent auditor provides audit services to peers and analyzes various factors that moderate the effect of common auditors.FindingsPeer firms audited by the same auditor make similar R&D investment decisions. This effect is more pronounced when the auditor specializes more in auditing R&D, when the auditor has a long-term client relationship, and when the firms exhibit a higher level of demand for incremental information relevant to R&D investment. Consistent with the beneficial role of common auditors, firms that are more responsive to auditor-provided information engage more actively in innovation activities in subsequent years.Originality/valueThis study deepens the understanding of how networks created by common auditors facilitate information flow among client firms and shape these firms’ R&D investment decisions.

The Role of External Auditors in Improving Cybersecurity of the Companies through Internal Control in Financial Reporting

The Role of External Auditors in Improving Cybersecurity of the Companies through Internal Control in Financial Reporting

The effect of tax planning activities and firm characteristic: Evidence from Indonesia

This study's purpose of contributing to the literature by empirically examining the effect of tax planning, activities, financial debt, audit quality, and firm investment on the firm value. This study adopts quantitative method research using panel regression with 1,264 data samples for model 1 and 1,291 data samples for model 2 with observation year from 2017-2021. This study shows that audit quality and tax planning have a significant positive impact on firm value. In contrast to firm investment, financial debt has a significant negative effect on firm value, which has insignificant results. This research contribution is that companies should pay attention to the selection of auditors for a financial audit because the auditor's role has a positive impact on the firm value. Also, investors can see the value of companies eligible for investment considering the tax planning activities in advance of the company carried out. The novelty of this research is the use of measurement of tax per share for tax planning, rarely used by the other researcher in conducting a relationship between firm value and tax planning. 
 Public interest statement
 This study is necessary because the auditor's role is critical in minimizing the profit-making practices of managers and ensuring the quality of corporate earnings reporting. Investors can also pay attention to the value of a company worth investing in by paying attention to the tax planning activities undertaken by a company.
 Article history
 Received 26 Nov 2022 | Revised 10 Jan 2023 | Accepted 11 Jan 2023 | Online First 03 Feb 2023