Search results for "Information technology audit"
showing 10 items of 15 documents
Struggle over joint audit: on behalf of public interest?
2012
International audience; European Commission (EC 2011) has recently suggested joint audit - broadly defined as an audit where two independent auditors are jointly liable for the audit report - as a way a way to increase audit quality after the financial crisis and to mitigate audit market concentration, by enlarging the audit offer. Big 4 audit firms have fought this proposal by arguing its unbearable cost while 2nd Tier audit firms have supported it by arguing its added quality. This conflicting position leads us to question their claim of public interest concern. As group-interest economic regulation theories predict that the absence of any effect of a new regulation (here: joint audit) is…
The Impact of Audit Committee Characteristics on the Enhancement of the Quality of Financial Reporting: an empirical study in the Spanish context
2007
The purpose of this paper is to analyse the relationship between the likelihood that a company will receive a qualified audit report (as a measure of the quality of financial information) and the existence and characteristics of the audit committee (AC). For listed companies that voluntarily created an AC in the period following the publication in 1998 of the Spanish Code of Corporate Governance, known as the Olivencia Code, we find that ACs size, the percentage of independent members in ACs, company size, losses reported in either or both of the previous two years, receiving the same qualified audit opinion as in the previous year and ownership concentration affect the likelihood of receiv…
The Role of Internal Audit in Fraud Prevention and Detection
2014
Abstract This article aims to not just briefly describe the role of the internal audit in the detection of possible frauds, but also to highlight its importance in preventing the commission of frauds in any economic entity. Moreover, the analysis intends to especially point out the advantages that an internal audit can offer to the management of an economic entity and its partners, and to the society as a whole as well. Starting from the premise that auditors are not the adversaries of an entity, one should remember that: the internal audit is a function of assistance offered to the leadership of that entity in order for them to better manage their activities; it expresses judgments on all …
The corporate image of auditors in a developing audit market within the EU: the case of Spain
2004
This paper examines the images of audit firms in Spain. Spain offers a valuable research context in that it is a relatively new audit market and one where the top company audits are not totally dominated by the large multinational audit firms, allowing for a comparison of the images of such firms against those associated with smaller, national audit firms. The findings of this survey are pertinent given the current level of debate internationally over the role, regulation and quality of auditing services and concerns over the potential impact of recent corporate scandals on auditor reputation. Our study shows that the images of audit firms in Spain have differed on a number of dimensions, m…
Audit Quality and Corporate Governance: Evidence from the Microfinance Industry
2012
This study uses a unique, hand-collected sample of microfinance institutions from 73 countries that typically are not investigated in accounting research to analyze the relationships between audit quality and governance mechanisms. We examine two measures of audit quality, namely, the use of Big Four auditors and the presence of internal auditors who report to the boards of these institutions. The empirical analysis of this study reveals that these two quality metrics are highly related, although we also demonstrate that these metrics capture distinctive aspects of audit quality. In particular, the presence of internal auditors is related to other indicators of stricter governance, whereas …
Academic Practitioner Auditors
2016
Academic practitioner auditors engage in academic research on top of their audit activities. Based on constructive learnings theory and evidence-based management theory, we argue that engaging in research helps lead auditors to deliver higher audit quality. Moreover, we expect that this engagement enables lead auditors to develop their professional reputation and, hence, to generate higher audit fees. Using data from Germany, where lead auditors frequently engage in research, we find empirical evidence for these conjectures. Our study contributes to the current AAA and AICPA debate about the value of bridging the gap between academia and audit practice.
Was the European Commission Green Paper Right? An Evaluation of the French Experience with Joint Auditing
2012
The Green Paper entitled “Audit policy: Lessons from the crisis” (European Commission, 2010) recommends the introduction of joint audit for European listed companies, based on the French experience, to limit the market dominance of the Big 4 and to promote audit quality. However, the regulation passed by the European Parliament in April 2014 does not require, but only encourages the use of two auditors for public-interest entities (European Parliament, 2014). Since many groups of interests tried to influence the European Commission during the consultation process, it is relevant to evaluate the costs and benefits for investors of the unique joint audit system that persists among the occiden…
What Dimensions of Lead Auditor Expertise Matter for Audit Quality and Audit Fees?
2015
This study investigates the effects of lead auditors’ technical and managerial knowledge on audit quality and audit fees. The German institutional environment enables us to track auditors over their careers and measure their various personal attributes. We find that lead auditors’ technical knowledge is more important for audit quality than their managerial knowledge; however, their managerial knowledge is a more influential driver of audit fees than their technical knowledge. The results of various identification strategies including firm-fixed effects models, propensity-score matching, and instrumental variables approaches suggest that the observed relations are treatment rather than sele…
Main drivers of consultancy services: A meta-analytic approach
2016
Abstract This meta-analysis incorporates the results from 34 separate studies examining fee models for consultancy services whereby the consulting firm provides both audit and advisory services to its customers. The findings indicate a number of key determinants of consultancy bills: client size, audit fees, auditors being from a “Big Audit Firm,” client's financial difficulties, and prior experience with the legal auditors. Conversely, the meta-results fail to correlate the variable of interest with several constructs commonly used in consultancy models such as the auditee's inherent risk, the client's financial debt, or the audit opinion. The study also explores the influence of three mod…
Busyness of audit committee directors and quality of financial information in India
2016
The audit committees, as a part of the internal corporate governance mechanisms, play an important role to enhance the financial reporting quality. The busyness of audit committee members of a firm in boards and committees of other firms can affect its independent functioning, ceteris paribus. The current study examines, first, the association between multiple directorships of audit committee members and quality of financial reporting in India, second, whether endogenously determined busyness limits of busyness of the audit committee members provide better insights than those exogenously mandated by regulators. The study finds that endogenously determined busyness limits of sub-samples and …