Audit Tasks Research Articles

Can Thinking about Alternative Explanations Promote Professional Skepticism?

SYNOPSIS We conduct an experiment with practicing Big 4 audit seniors and demonstrate that generating counterexplanations for an event in an unrelated task prior to completing audit planning tasks activates a counterfactual mindset that enhances auditors’ professional skepticism. This approach to activating professional skepticism can be implemented without auditor training and can be deployed across many different audit tasks. Overall, the experiment indicates that activation of a counterfactual mindset has significant potential to enhance audit quality.

More than Making Copies: Survey Evidence on the Work of Novice Auditors

SUMMARY The auditing landscape has changed dramatically in the last 20 years due to new standards, improved technology, internal shared services centers, and more. These institutional advances have altered the responsibilities of novice auditors. However, our knowledge of novice auditor task responsibilities and experiences has not been systematically updated in the 21st century. This study provides empirical evidence on the tasks and experiences of novice auditors by reporting survey responses from 104 audit interns, more than 30 intern supervisors, and 89 staff auditors. Our results shed light on the evolution of the roles of novice auditors by documenting the significant number and variety of tasks that they perform, as well as the interpersonal interactions, formal training, and other activities they commonly experience. Data Availbility: Please contact the authors.

The Impact of the Implementation of Internal Audit Tasks According to Standard 2300 on the Efficiency of the Performance of Industrial Companies Listed on Amman Stock Exchange

Purpose: To determine the impact of the implementation of internal audit tasks in according to standard 2300, with its dimensions (identifying information, analysis and evaluation, documenting information, supervising the task) on the efficiency of the performance of industrial companies listed on the Amman Stock Exchange, and to achieve the objectives of the study.
 
 Methodology: The descriptive approach was used Analytical. The study population consisted of internal auditors in industrial companies listed on the Amman Stock Exchange, which numbered (56) companies, and the study sample consisted of (160) questionnaires distributed to workers in the job of (internal auditor, director of internal audit and head of the internal audit department) in the Jordanian industrial companies listed on the Amman Stock Exchange, from which (124) questionnaires were retrieved. In addition to (2) an incomplete questionnaire, all the information contained therein. Thus, the study sample consisted of 122 individuals. To test the hypotheses of the study, the researcher used the SPSS program ، through the simple regression test and the Three-way Anova test. The study reached results there is a statistically significant relationship to determine the information, analysis and evaluation on the performance efficiency of the industrial companies listed on the Amman Stock Exchange. 
 
 Findings: While showed, there is no statistically significant relationship to document information and supervise the task on the performance efficiency of industrial companies listed on the Amman Stock Exchange.
 
 Further research: In view of the results, the study recommended the need to support the internal audit department in Jordanian industrial companies.and More studies are needed.

The Effect of Profession Ethics, Independence, and Audit Expertise on Auditor Performance

Purpose: The goal of this research is to explore and assess the effect of specialized ethics, independence, and audit experience on audited performance. Theoretical framework: Authorities and constraints, religious views, corporate ethics standards for specialized fields such as public accounting firms, and regulations of behavior in the workplace companies are all examples of predefined moral principles or ideals Arens et al. (2014). Professional ethics describes a professional work as doing associated activity governed by norms established by a group or corporation for everyone involved to abide (Yuwono, 2011). Each occupation that provides social assistance requires a set of norms of conduct that regulate how professionals behave (Agoes, 2011). Design/Methodology/Approach: Research period used is the year 2017-2020. Explanatory research using quantitative research techniques is this sort of study. The population and sample size of a study at the Central Sulawesi Province Financial and Development Supervisory Agency (BPKP) to attain specified research objectives.Multiple linear regression analysis is used to study and evaluate the data using the Normality Test, multicollinearity, and heteroscedasticity outcomes. Findings: The study's findings can be utilized as a source of knowledge and as a foundation for developing regulations about auditor performance. Research, practical & social implication: The more the audit competence, the better the outcome. It is recommended that BPKP auditors for Central Sulawesi Province think and act independently on the job, have a sense of responsibility if the examination results require advancement and adjustment, and implement adheres to the fact eradicate noteworthy issues or important outcomes from the summary (or notes on the audit results) consequently that the audit task is completely impartial and may deliver an outstanding and accurate audit. Originality/Value: Professional ethics, independence, and audit knowledge all have a substantial and favorable influence on BPKP Auditor Performance in Central Sulawesi Province at the same time. The higher the level of ethics professionalism, independence, and audit knowledge, the higher the generated performance.

Similarity-based deduplication and secure auditing in IoT decentralized storage

Data storage is becoming more difficult due to the network technology’s rapid development, especially with the significant advancement in Internet of Things (IoT). To solve this problem, various cloud storage-based deduplication schemes have been extensively studied to alleviate the storage burden of local IoT devices. However, recent evidence has revealed the deficiencies of these centralized data management schemes related to poor adaptability and lack of resistance to the single point of failure. Most existing deduplication approaches only perform deduplication on the same data, lacking consideration of the IoT data similarity characteristics. Also, these approaches keep only one copy of all data stored on the cloud server, making them valid only if the cloud storage provider is fully trustable, and the applicability of the solution is significantly reduced. What is important, outsourcing storage takes away control of data from their owners, security audits thus should also be considered in secure data storage research. To tackle these issues, we propose a similarity-based deduplication and secure auditing in the IoT decentralized storage scheme. Specifically, our scheme utilizes a novel similarity-based deduplication method based on the multi-server storage model to achieve efficient space saving while protecting data security. Furthermore, the proposed scheme ensures the integrity and availability of data by introducing similarity-based proofs of data ownership and similarity-based data integrity auditing. On this basis, our scheme further adopts a similarity-based secure auditing mechanism to achieve decentralized public auditing without the third-party auditor, in which the audit results of outsourced data are shared on blockchain to avoid repetitive audit tasks. We verify the correctness and effectiveness of our proposed scheme through rigorous theoretical analysis and extensive experimental results.

Evaluation of the Efficiency of On-Site Tax Checks as a Form of Tax Control

Relevance. In most cases, an on-site tax audit is the final stage of a lengthy tax control procedure, within the framework of which the competent authorities have formed a capacious package of evidence of the presence of facts of tax offenses. In this regard, the tasks of the on-site tax audit are concentrated on collecting and creating a material evidence base for the purpose of practical confirmation of the conclusions made. When organizing on-site tax audits, it is necessary to generate a timely response mode to the presence of signs of a potential tax offense, which are quite clearly regulated in the relevant regulatory legal acts. The identification of such signs based on the results of control and analytical monitoring serves as a motivated basis for activating the mechanism of on-site tax audit.The purpose is to evaluate the effectiveness of on‒site tax audits as a form of tax control.Objectives is justification of the choice of the object of an on-site tax audit as a condition for the cumulative effectiveness of the studied form of tax control.Methodology. Based on the application of methods of economic analysis, the work carried out a comprehensive comparative diagnosis of the effectiveness of on-site tax audits, including in the wake of comparing key performance indicators at the city, regional and state levels.Results. The materials of the presented study reveal the essence of on-site tax audits and their distinctive features, focus on the results of the analysis of the dynamics and structure of on-site tax audits in the activities of the Federal Tax Service in the city of Kursk, assess the effectiveness of on-site tax audits in the Federal Tax Service in the city of Kursk, and also consider the results of a comparative analysis of the effectiveness of on-site tax audits at the city, regional and state levels.Conclusion. The authors conclude that the on-site tax audit is the most important element of tax control, which focuses on the supervision of the quality of performance of tax obligations by institutional units.

Prototyping and implementing Robotic Process Automation in accounting firms: Benefits, challenges and opportunities to audit automation

Despite the advancements in technology, auditors still spend a significant amount of time performing repetitive and rule-based tasks. Our paper examines various audit scenarios within four accounting firms and discusses the potential for robotic process automation (RPA) to improve the efficiency and accuracy of these tasks. We propose and implement RPA-enabled solutions to make various procedures more efficient and effective. These anecdotes were based on our consultancy experiences with auditors from a group of Big 4 and mid-sized accounting firms. We present four practical business process scenarios and the prototyped RPA solutions. In each scenario, we explain our automation strategies and the duration of development. We also describe the implementation benefits and challenges, as well as analyze how we have helped the accounting firms automate their real-world audit tasks by providing the as-is and to-be Business Process Model and Notation that one can extend for future RPA development. Finally, we discuss the future challenges and opportunities regarding the broader implementation of RPA in accounting and audit tasks.

Smart contract-based integrity audit method for IoT

With the widespread adoption of Internet of Things (IoT) technology, a large amount of private data has been generated. Due to the limited computing and storage resources of IoT devices, enterprises and individuals choose to use a cloud storage provider (CSP) to manage their data. However, they lose the actual control of the data, and hence users need to verify the integrity of the data in the cloud. As a result, reducing the computational overhead of integrity auditing tasks for massive amounts of data and optimizing the distribution of benefits among the participants have become the key to the healthy development of IoT technologies. This paper proposes an integrity auditing method based on smart contracts. First, we construct a noninteractive auditing model based on a chaotic system so that the third-party auditor (TPA) can complete the auditing task without challenging the CSP. Second, we proposed a new construction method for audit trees that can quickly generate the verification tag of the root node. Finally, we design a smart contract-based auditing algorithm on the blockchain, which can simultaneously verify the behaviour of the CSP and the TPA to achieve fair payments. The theoretical analysis shows that our scheme can effectively prevent the TPA from falsifying audit results and prevent collusion between the TPA and the CSP. The experimental results show that our scheme has higher audit efficiency.

Influence of Audit Tenure and Size of Public Accounting Firm on Behavior of Integrity Financial Statements Integrity with the Committee Audit as Moderating Variable in Sub Companies Computer Services and Electronic Devices Sector

Purpose of the Study: This study aims to examine the effect of audit tenure, the size of Public Accounting Firm (KAP) on the integrity of financial statements moderated by the audit committee of the computer services & other equipment sub-sector. Theoretical framework: The study is based on a review of the literature and make some reports confirmation from the field of this research, which is described in the article. Use all methods to retain personnel. Integrity of Public Accounting Officer must be researched whether it enhances Audit Tenure, audit committee, and Financial Reporting Quality. Design/methodology/approach: The sample selection technique used purposive sampling and obtained 7 sub-sector companies of computer & other equipment services listed on the Indonesia Stock Exchange (IDX) used in this study. This study uses a balance panel with 35 observations and estimates (common effect model). Findings: The results of this study found that the audit tenure variable has an effect on the integrity of the financial statements. Meanwhile, the size of the KAP has no effect on the integrity of the financial statements. Research, Practical & Social implications: Today, almost every organization is driven by technology, but human resources are needed to do work through technology. It is the challenge of an Public Accounting Officer to keep working for a long time for integrity in an organization in a dynamic environment. Originality/value: The value of the study reveals that, The auditor's task in this case is to examine the financial statements that have been made by the manager, and provide the final result in the form of an opinion on the fairness of the financial statements.

The impact of empowering internal auditors on the quality of electronic internal audits: A case of Jordanian listed services companies

This study emphases on the top management empowerments to internal auditors, namely, general qualification, electronic qualification and independence, affecting quality of electronic internal audits in the Jordanian Listed Service Companies. This paper used 144 usable questionnaires from internal auditors in the Jordanian listed service companies. The gathered data were analysed utilizing ``Statistical Package for Social Sciences (SPSS)''. The results reveal that general qualification, electronic qualification and independence have a significant effect on the quality of electronic internal audits, as supported by the resource-based view. Due to the importance of the service companies’ sector in the context of Jordan, the results are helpful for the internal audit profession and decision makers in offering new legislation for the internal audit profession. Future research may consider other factors that may hinder the quality of electronic internal audits, such as audit task complexity or organizational culture.

A collaborative auditing scheme with dynamic data updates based on blockchain

Cloud data auditing is essential to ensure the integrity of cloud data. The main idea of cloud auditing is to entrust the audit task to a third-party auditor (TPA) with powerful computing ability. However, TPA may lead to data leakage and become the single point of failure. Recently, blockchain has been introduced to solve these problems by TPA. However, the dynamic storage structure developed by traditional cloud storage does not apply to the blockchain. This paper proposes a blockchain-based collaborative public auditing scheme for dynamic data. We design the cloud service provider(CSP) to generate a challenge set using the latest block hash. It does not need to interact with the blockchain in the challenge phase, dramatically reducing communication overhead. In addition, considering economic factors, we allow users to seek partners to reduce audit costs. The EigenTrust model evaluates the reputation of each user's audit behaviour, effectively avoiding the probability of malicious users participating. For data update, we introduce the Pseudo Index Linked List(PIL) index management structure, which reduces the size of the index management structure to adapt to the blockchain's characteristics and makes the update operation have a constant time complexity. Through a complete security analysis and performance evaluation, we proved the security and effectiveness of the scheme.

Understanding Auditor-Auditee Relationship: Some Cultural Considerations

Purpose: The purpose of this study is to analyse other types of relationship developed between auditor and auditee. The study tries to explore kinds of auditor and auditee working relationship appeared in an audit process. Theoretical framework: Research have shown that the AAR is more than just about good knowledge that should be acquired by auditors regarding their clients’ industry or how long auditors have served a client. It is also about auditors’ performance in audit tasks and in interaction with clients, or how to develop a better understanding of clients. However, that kind of relationship has not been explore enough as study on AAR most focus on professional relationship Design/methodology/approach: This study applied a qualitative approach. The interview method, in semi-structured form, was conducted to collect data. The semi-structured interview posed the same questions to all interviewees. This research involved 12 interviewees which consist of three different audit market participants in Indonesia: auditors, auditee, and users of financial statements. These participants (auditee and users of financial statements) were identified and selected from the IDX website, while participants for the auditor group were identified from BAPEPAM-LK database. Results were analysed by using NVivo software. Findings: Key findings derived from the qualitative study confirmed that some cultural values appear in participants’answers. The most common cultural values found in the interview text were: harmony; relationship prevails over task; and warm relationships are important. Indonesians interpreted the auditor-auditee relationship as a peers’ relationship: a relationship that consists of a professional/personal relationship and trust. Research, Practical & Social implications: This research nhances knowledge of the influence of cultural values on the relationship. In this type of society, individuals perceive social situations, including business relationships, in terms of close personal bonds. The personal relationship should be established first before any business can be done. service providers who are able to show warmth to customers can build trust with them. Moreover, a high-social-interaction context provides an environment in which social interaction and relationship-building activities are a primary goal. Originality/value: This research provides a more refined understanding of auditor-auditee relationship. Given ongoing globalisation and the fact that audits are performed by auditors from a multitude of nations, it is important that AAR research captures perspectives from different cultural backgrounds.

PERAN ETIKA AUDIT TERHADAP LAPORAN KEUANGAN PERUSAHAAN : ANALISIS PENGARUH KEDEKATAN EMOSIONAL ANTARA AUDITOR DENGAN KILEN TERHADAP INDEPENDENSI AUDITOR

In auditing, the attitude of auditor independence is a very important ethical component for auditors. The auditor's task is not only to carry out an audit properly and properly, but the auditor must also be able to maintain professional ethics by instilling an attitude of independence as an auditor. The role of the auditor in an attitude of independence in giving his opinion will be used as a basis when making decisions. The purpose of the authors in making this article is to show how the threat of emotional closeness can affect the quality of audit results if an auditor cannot maintain his independence as an auditor. Researchers used descriptive qualitative methods with a literature study approach. It can be concluded from the results of the analysis that audit judgments should not be based on the auditor's emotional closeness to the client. Efforts to give money, provide entertainment facilities, invest something that could be accepted by the auditor will affect his independence as an auditor. The auditor must understand the right situation in making ethical decisions, in order to continue to produce a good quality audit opinion. Work experience and knowledge as well as self-confidence is sufficient to maintain auditor independence in an audit conflict situation like this.

Internal audit under martial law

Introduction. In the conditions of martial law, the work of the internal audit system changes and is revised. Having analyzed the points of view of scientists and forensic specialists regarding the work of the internal audit service during the war, which determined the purpose of the paper. The purpose of the paper is to consider the possibilities of internal audit during martial law, its purpose, functions and tasks during this period. Results. During the writing of the paper, general logical methods of scientific research were used: observation, analysis and synthesis, theoretical generalization. It has been proved that the control function of audit during war is not as important as before war. The advisory function of the internal audit becomes the main one during the war, it will contribute to the preservation of business and the reduction of enterprise risks. It is proposed to use the work experience of internal auditors acquired during the Covid-19 pandemic. It is important to improve the efficiency of internal audit work in the company is to use a systematic approach that will contribute to the efficiency of the work of internal audit representatives. Conclusions. Martial law changed the purpose, functions and tasks of internal audit. During the war, its purpose is the continuity of the company's activities and the preservation of assets, the physical safety of personnel. The main function is consulting, analytical and predictive functions are of great importance.

Kompetensi, Kompleksitas Tugas, Stress Kerja dan Kinerja Auditor BPK RI Perwakilan Provinsi Bali

Auditor performance is the activity of carrying out audit tasks that have been completed by the auditor within the specified time period. The aim of this research is to determine the influence of competency, task complexity and work stress on auditor performance. This research was conducted at the BPK Bali Office. The sampling technique used was purposive sampling and the number of samples obtained was 60 respondents. This study uses multiple linear regression analysis. The research results show that competence has a positive effect on auditor performance, while the research results of task complexity and work stress have a negative effect on auditor performance, because BPK Bali auditors clearly know the tasks they are carrying out on the basis of competence and do not experience difficulties or work stress in carrying out their duties.Keywords: Competence; task complexity; work stress; audit performance

The Impact of Audit Technology on Audit Task Outcomes: Evidence for Technology‐Based Audit Techniques*

ABSTRACTAs audit technology becomes more widespread, practice and academia are raising concerns about the costs and benefits of these technologies. We examine how internal auditors use technology‐based audit techniques (TBATs) and how TBATs impact the efficiency and effectiveness of their audits. We use two surveys and interviews of individual auditors and chief audit executives (CAE) to examine their perceptions of TBATs. Auditors perceive TBATs as beneficial. Specifically, an increase in the use of TBATs is associated with completing more audits, finding more risk factors, providing more recommendations, and decreasing audit days. However, CAEs also perceive TBATs to be costly. An increase in the use of TBATs is associated with an increase in the size of the internal audit function. Finally, interviews with CAEs suggest that TBATs are not used more often because of difficulties in quantifying their benefits, observing their benefits in a timely manner, and hiring auditors with appropriate skills. Overall, TBATs stand to increase the efficiency and effectiveness of audit tasks, but auditors struggle to quantify their net cost‐benefit tradeoff. Our findings validate the issues raised by both proponents and opponents of audit technologies and help provide empirical data to inform their decision‐making process regarding the future of these tools. Additionally, our study prompts several avenues for future research that can help inform regulators, practitioners, and researchers on how these technologies are impacting the auditing profession.

Shariah audit of Islamic Banks in Bangladesh: the present practice and the way forward

PurposeThe study explores the existing Shariah audit practice of Islamic banks (IBs) in Bangladesh aiming at providing suggestions for improvements on the detected shortfalls in the relevant areas.Design/methodology/approachThis research applied a qualitative method, and data were collected through conducting semi-structured interviews in Bangladesh. A total of 17 interviews were conducted for accomplishing the research objectives.FindingsThe study finds that there is no comprehensive Shariah audit manual in the current operation for IBs in Bangladesh, and as such, the requirements of their Shariah compliance remain a big question. Although the Shariah audit is conducted within IBs, and the Shariah audit officers or Shariah officers inspect necessary documents while conducting the Shariah audit, they only cover 10–20% of total investments and transactions. Based on the findings of this study, it is recommended that the Shariah auditing tasks should broadly cover at least 80% of the investment portfolios, documents and financial contracts and activities.Research limitations/implicationsThe findings of this research are expected to significantly contribute to the regulatory authorities concerned in Bangladesh and beyond, which include the suggestions that IBs can adopt to strengthen their Shariah governance system. The study also pinpoints that in the current system, Shariah auditors' roles are somehow limited in examining and checking the investment sides with a minimal portion (10–20%), for which they are unable to perform their responsibilities in a befitting manner to provide assurance services and overall Shariah compliance of IBs activities.Practical implicationsThis study explores the current Shariah audit systems and provides recommendations to improve the existing systems which will be beneficial for Islamic banks of Bangladesh.Originality/valueTo the researchers' knowledge, perhaps this is the first research of its kind which seeks to explore the current Shariah audit practice in Bangladesh qualitatively, and it provides some practical suggestions for making the necessary developments of the current audit process of IBs. In addition, there are no empirical studies in the entire Emerald insight publishers and Scopus database regarding Shariah audit practices. The study contributes to the agency, stakeholder and legitimacy theories by exploring the Shariah audit of IBs.

Роль внутрішнього аудиту у системі управління підприємством

Abstract. Introduction. It has been established that internal audit is one of the types of internal economic control of business entities. The main criteria for the quality of conducting an internal audit as a management function are the efficiency, productivity and cost-effectiveness of the internal audit system. Purpose. The purpose of the article is to reveal the need for internal audit at the enterprise and the peculiarities of its organization. Results. It has been established that internal audit is one of the types of internal economic control of business entities. The main criteria for the quality of conducting an internal audit as a management function are the efficiency, productivity and cost-effectiveness of the internal audit system. The need for the functioning of the internal audit service at the enterprise is substantiated. The peculiarities and methods of its organization are considered, and their positive and negative aspects of internal audit are determined. The content of the concept of "internal audit" and the question of the need for its operation at the enterprise as a tool for improving the efficiency of the accounting system and activities as a whole are revealed. The main stages of internal audit are formulated and a set of qualitative and quantitative parameters for evaluating the effectiveness of the accounting system is proposed, based on the directions of research of individual objects (elements) of the accounting system by means of internal audit. The tasks of the internal audit regarding the evaluation of the efficiency of the enterprise's accounting system have been substantiated and specified. Conclusions. It has been proven that the effectiveness of internal audit at enterprises is determined by the level of its organization. The main objects of the internal audit organization are the creation and organization of the work of the internal audit system, the organization of the work of internal auditors, and the organization of the internal audit process.

The role of AI in transforming auditing practices: A global perspective review

This Review provides a glimpse into the comprehensive examination of the transformative impact of Artificial Intelligence (AI) on auditing practices globally. The review delves into the multifaceted ways in which AI technologies are reshaping traditional auditing methodologies, bringing about efficiency, accuracy, and adaptability in the face of an evolving business landscape. The global perspective of this review encompasses diverse industries and jurisdictions, offering insights into how AI is redefining the audit landscape on a universal scale. The analysis explores the integration of AI-driven tools in auditing processes, emphasizing the enhanced capabilities for data analysis, anomaly detection, and risk assessment. Key themes include the automation of routine audit tasks through AI, enabling auditors to focus on complex analyses and strategic decision-making. The review also delves into the potential challenges and ethical considerations associated with the adoption of AI in auditing, recognizing the need for a balance between technological advancement and maintaining audit quality and integrity. Through a survey of case studies and real-world implementations, the Review highlights successful instances of AI application in auditing across various sectors. It elucidates how AI-driven algorithms contribute to real-time auditing, providing auditors with dynamic insights into financial data, fraud detection, and compliance monitoring. The Review concludes by underlining the global significance of AI in shaping the future of auditing practices. It calls attention to the imperative for industry stakeholders, regulators, and auditors to embrace the transformative power of AI responsibly. As technology continues to evolve, this review encourages a forward-looking approach, fostering a collaborative environment that harnesses the benefits of AI while addressing the challenges to ensure the continued trustworthiness and effectiveness of auditing practices worldwide.

COVID-19 Pandemic, Internal Audit Function and Audit Report Lag: Evidence from Emerging economy

With the spread of the COVID-19 pandemic, the accounting and auditing profession has been exposed to additional risks, challenges, and serious threats that affect audit quality; audit timeliness. Therefore, this study examines the effect of COVID-19 on audit reporting lag (ARL). In addition, this study investigates whether the internal corporate monitoring mechanisms contribute to mitigating the effect of the global health crisis; consequently, the study employs the internal audit function (IAF) cost as a moderator on the relationship between COVID-19 and ARL. To accomplish the objectives of our study, a sample of 1,352 firm-year observations from Malaysian listed firms was employed during the period 2017–2020, and feasible generalized least square (FGLS) regression was used. The findings indicate that auditors take longer to complete audit tasks and produce audit reports during COVID-19 than before. However, that period is obviously reduced with firms investing higher in their IAF. Furthermore, the findings obtained from the additional analyses and endogeneity tests support the main regression findings, thereby revealing that the findings are robust. The study’s findings are among the earliest empirical evidence of the effect of COVID-19 on the ARL.