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Audit Process (audit + process)
Selected AbstractsThe Influence of Nonaudit Service Revenues and Client Pressure on External Auditors' Decisions to Rely on Internal Audit,CONTEMPORARY ACCOUNTING RESEARCH, Issue 1 2005WILLIAM L. FELIX Jr. Abstract This paper investigates how external auditor provision of significant nonaudit services and client pressure to use the work of internal audit influence external auditors' use of internal auditors' work. More specifically, we study how external audit evidence gathering choices are influenced by nonaudit fees and client pressure. Our research is motivated by an observation that the magnitude of nonaudit services provided to audit clients introduces the risk that client management may leverage its position with the external auditor and potentially affect the audit process. We address this issue by extending prior research and focusing on the importance of various explanatory variables, including nonaudit service revenues, client pressure, internal audit quality, and coordination, to the external auditor's decision to rely on the work of internal audit. We use data primarily obtained through surveys completed by internal and external auditors. The survey responses represent 74 separate audit engagements. Our findings reveal that when significant nonaudit services are not provided to a client, internal audit quality and the level of internal-external auditor coordination positively affect auditors' internal audit reliance decisions. However, when the auditor provides significant nonaudit services to the client, internal audit quality and the extent of internal - external auditor coordination do not significantly affect auditors' reliance decisions. Furthermore, when significant nonaudit services are provided, client pressure significantly increases the extent of internal audit reliance. Thus, external auditors appear to be more affected by client pressure and less concerned about internal audit quality and coordination when making internal audit reliance decisions at clients for whom significant nonaudit services are also provided. [source] PERFORMANCE MANAGEMENT AND BEST VALUE AUDIT IN SCOTLAND: A RESEARCH NOTE ON THEORY AND PRACTICEFINANCIAL ACCOUNTABILITY & MANAGEMENT, Issue 4 2008Arthur Midwinter This paper appraises the theory and practice of Best Value Audit in Scotland, and in particular the central assumption that a robust performance management system is essential for continuous improvement in service delivery, within a rational planning model of governance. The reviews of Best Value Audit in practice reveal important gaps between theory and practice, with an overemphasis on monitoring process rather than performance. There is, therefore, considerable scope to reduce the demands of the audit process on local government, and Best Value Audit, needs to move from a theoretical model to an evidence-based model of good practice if real progress is to be made. [source] When Auditors Err: How Mistake Significance and Superiors' Historical Reactions Influence Auditors' Likelihood to Admit a MistakeINTERNATIONAL JOURNAL OF AUDITING, Issue 1 2010Chad Stefaniak The procedures performed by staff auditors are a critical component of the audit process, and mistakes in these procedures could jeopardize opinions if they are not communicated. While professional standards instruct auditors to report their errors, auditors have incentives to withhold information about mistakes because they are protective of their professional images. These conflicting pressures are examined by investigating the effects of mistake significance and superiors' historical reactions to mistake admissions on the likelihood that staff auditors will admit mistakes. We find an interaction suggesting that staff auditors are more likely to admit errors when their superiors have reacted positively, regardless of error significance. Conversely, staff auditors are less likely to admit apparently insignificant errors when their superiors have reacted negatively to prior mistakes. [source] Internal Auditing and Risk Assessment in Large Italian Companies: an Empirical SurveyINTERNATIONAL JOURNAL OF AUDITING, Issue 3 2003Marco Allegrini This paper aims at achieving an overall view regarding the state of the art of internal auditing in large Italian companies. Mainly, it is focused on risk assessment practices and on the execution of a risk-based approach in the audit process. The research is based on a survey carried out on the ,Top100' companies listed at the Italian Stock Exchange. Survey results reveal that practices vary significantly among three different models: 1A few companies (25%) carry out mainly traditional compliance activities and they generally follow an audit-cycle approach for the annual audit planning; 2In most companies (67%), internal auditors adopt the COSO model and perform mainly operational auditing. Risk-based approach is applied predominantly at macro level. 3Finally, it is possible to identify a very few large companies (8%), in which auditors are applying a risk-based approach both at macro and micro level. [source] A computer prototype to support knowledge audits in organizationsKNOWLEDGE AND PROCESS MANAGEMENT: THE JOURNAL OF CORPORATE TRANSFORMATION, Issue 3 2009Alonso Perez-Soltero A knowledge audit is a process whose purpose is to diagnose the situation in which knowledge is kept within an organization, that is, it allows to know what knowledge exists, who has it, where it is, how it moves and how it is managed. The aim of this paper is to present the implementation of an ontology as a support to knowledge audit process through a computer prototype. A case study in an organization is developed, in which the knowledge audit process is supported by the prototype. Among the advantages it offers: facilitates obtaining knowledge inventory, classifying and valuing knowledge assets and flows, identifying knowledge gaps, knowledge management analysis and reusing the audit's results. Copyright © 2009 John Wiley & Sons, Ltd. [source] Original Article: Audit of severe acute maternal morbidity describing reasons for transfer and potential preventability of admissions to ICUAUSTRALIAN AND NEW ZEALAND JOURNAL OF OBSTETRICS AND GYNAECOLOGY, Issue 4 2010Beverley A. LAWTON Background:, Maternal mortality is a rare event in the developed world. Assessment of severe acute maternal morbidity (SAMM) is therefore an appropriate measure of the quality of maternity care. Aims:, The aim of the study was to conduct a retrospective audit of SAMM cases (pregnant women admitted to a New Zealand Intensive Care Unit) to describe clinical, socio-demographic characteristics, pregnancy outcomes and preventability. Methods:, Severe acute maternal morbidity cases were reviewed by a multidisciplinary panel to determine reasons for admission to ICU, to classify organ-system dysfunction and to determine whether the SAMM case was preventable or not. Inclusion criteria were: admission to ICU between 2005 and 2007 during pregnancy or within 42 days of delivery. Results:, Twenty-nine SAMM cases were reviewed, of which 10 (35%) were deemed preventable. The most common reasons for transfer to ICU were: the need for invasive vascular monitoring, hypotension and disseminated intravascular coagulation. The most frequent types of preventable events were: inadequate diagnosis/recognition of high-risk status, inappropriate treatment, communication problems and inadequate documentation. All five SAMM cases of septicaemia were deemed preventable. Of the ten preventable cases, three were Maori (50% of the Maori in total audit), four were Pacific (67% of the Pacific in total audit) and three were women of ,other' ethnicities (17.6%, 3 of 17 in the audit). Conclusions:, An audit of SAMM cases describing reasons for transfer to ICU and preventability is feasible. We recommend that a prospective national SAMM audit process be introduced in New Zealand as a quality of care measure. [source] Board Characteristics and Audit Fees,CONTEMPORARY ACCOUNTING RESEARCH, Issue 3 2002Joseph V. Carcello Abstract This paper examines the relations between three board characteristics (independence, diligence, and expertise) and Big 6 audit fees for Fortune 1000 companies. To protect its reputation capital, avoid legal liability, and promote shareholder interests, a more independent, diligent, and expert board may demand differentially higher audit quality (greater assurance, which requires more audit work) than the Big 6 audit firms normally provide. The audit fee increases as the auditor's additional costs are passed on to the client, such that we expect positive relations between audit fees and the board characteristics examined. We find significant positive relations between audit fees and board independence, diligence, and expertise. The results persist when similar measures of audit committee "quality" are included in the model. The results add to the growing body of literature documenting relations between corporate governance mechanisms and various facets of the financial reporting and audit processes, as well as to our understanding of the determinants of audit fees. [source] Identifying Organizational Drivers of Internal Audit EffectivenessINTERNATIONAL JOURNAL OF AUDITING, Issue 1 2009Marika Arena This study attempts to understand the organizational drivers of internal audit effectiveness in the light of recent changes in the ,mission' of internal auditing and its central role in corporate governance. On the basis of data from 153 Italian companies, our survey shows that the effectiveness of internal auditing is influenced by: (1) the characteristics of the internal audit team, (2) the audit processes and activities, and (3) the organizational links. Internal audit effectiveness increases in particular when the ratio between the number of internal auditors and employees grows, the Chief Audit Executive is affiliated to the Institute of Internal Auditors, the company adopts control risk self-assessment techniques, and the audit committee is involved in the activities of the internal auditors. [source] | ||||||||||