Audit report timeliness

2018 ◽  
Vol 13 (1) ◽  
pp. 60-74 ◽  
Author(s):  
Ahmed Atef Oussii ◽  
Neila Boulila Taktak
Keyword(s):  
Financial Reporting ◽  
Emerging Market ◽  
Internal Audit ◽  
Listed Companies ◽  
Policy Implications ◽  
Internal Auditing ◽  
Content Type ◽  
Internal Auditors ◽  
External Auditors ◽  
Audit Reports

Purpose The purpose of this paper is to examine whether coordination between external auditors and the internal audit function affect the timeliness of audit reports as proxied by audit delay. Design/methodology/approach This study uses a survey of chief internal auditors from Tunisian listed companies to analyze the extent of coordination between IAFs and external auditors. Data spanning a four year period (2011-2014) was collected for 53 listed companies. Further, regression analysis was used to test the hypothesis. Findings Results indicate that greater coordination between internal and external auditors results in timelier financial reporting. Practical implications Overall, the study makes several important contributions. Findings provide important insights that an IAF acts as a valuable resource to external auditors. The results should be of interest to managers, external auditors and the Tunisian Financial Market Council. Originality/value This paper is one of few studies which have examined the association between internal-external audit coordination and timeliness of audit reports in an emerging market. The study makes a meaningful contribution to the corporate governance literature by investigating the influence of internal audit assistance on the delivery of timely audited financial information to the capital market. Results also have policy implications for Tunisian regulators with respect to the promotion of internal auditing best practices.

scholarly journals External and internal auditors’ perceptions on compliance with internal audit standards and practices: Spirit versus letters?

2021 ◽  
Vol 18 (3) ◽  
pp. 31-45
Author(s):  
Mohamed Hegazy ◽  
Marwa Farghaly
Keyword(s):  
Financial Reporting ◽  
Emerging Market ◽  
Internal Audit ◽  
International Standards ◽  
Internal Auditing ◽  
Internal Auditors ◽  
Listed Firms ◽  
External Auditors ◽  
Body Of Knowledge ◽  
The Status

This paper investigates differences between the external auditors’ (EA) and the internal auditors’ (IA) perceptions of the degree of usage and compliance with the Institute of Internal Auditors (IIA) International Standards for the Professional Practices of Internal Auditing (Standards) by internal audit departments. The research uses survey-based questionnaires sent to IAs and EAs of the listed firms registered in an emerging market and included interviews with individuals involved in the internal auditing function (IAF) and EAs. The survey analyzes issues relating to IAF compliance with IIA standards summarized in the Common Body of Knowledge Database (CBOK). Social identity and stakeholders’ theories are used to explain the development of the research hypotheses in relation to IAF. The research indicates that the rates of conformance for the selected individual standards vary significantly among respondents. The findings provide evidence that there are low levels of interactions between IAs and EAs in emerging markets. This study is considered among the first that surveys the status of the use of the professional IIA standards in listed firms in an emerging economy. It also investigates the importance of ensuring that the “spirit” of the IIA standards is adhered to rather than the mere compliance with their “letters”. The paper emphasizes the gap still existing in practice between IAs and EAs in relation to their interactions, communication, and cooperation to enhance the quality of the IAF activities and related financial reporting. The research study relied on a sample of companies to investigate the level of compliance with IIAs standards and selected a limited number of the IIA standards for usage and compliance assessments.

scholarly journals The Effects of Interaction between Internal Auditor and Audit Committee on Fraud Detection in Malaysia

2018 ◽  
Vol 7 (4.38) ◽  
pp. 1338
Author(s):  
Sunita Lylia Hamdan ◽  
Nahariah Jaffar ◽  
Ruzanna Ab Razak
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Audit Committee ◽  
Specific Interaction ◽  
Fraud Detection ◽  
Internal Audit ◽  
Internal Auditing ◽  
Internal Auditor ◽  
Internal Auditors ◽  
External Auditors

This study aims to examine the effect of interaction between internal auditor and audit committee on fraud detection in Malaysia.  Specific interaction is firstly; audit committee approving the appointment of chief audit executive, the evaluation of chief audit executive, the dismissal of chief audit executive, the internal audit budget and the internal audit plan or program.  Secondly, audit committee’s involvement in reviewing internal auditor’s work specifically; providing input for the internal audit plan, reviewing the results of internal auditing related to financial reporting, reviewing the results of internal auditing related to internal control, reviewing the results of internal auditing related to compliance with laws and regulation, reviewing the internal audit involvement in management responses to internal audit suggestions, reviewing the difficulties or scope restrictions encountered by internal auditors and reviewing the coordination between internal auditors and external auditors.  Survey questionnaires were mailed to internal auditors attached to 782 companies listed on Bursa Malaysia’s main market. The results of this study suggest that involvement of audit committee in approving chief audit executives’ matters is insignificant on internal auditors’ contribution to fraud detection.  However, audit committee’s involvement in reviewing internal auditors’ work significantly influence the internal auditors’ contribution in fraud detection.       

New perspective on the black box of internal auditing and organisational change

2016 ◽  
Vol 31 (8/9) ◽  
pp. 804-820 ◽  
Author(s):  
Aviv Kidron ◽  
Yuval Ofek ◽  
Herztel Cohen
Keyword(s):  
Public Sector ◽  
Quantitative Methods ◽  
Internal Audit ◽  
Organisational Change ◽  
Internal Auditing ◽  
Content Type ◽  
Internal Auditors ◽  
The Public ◽  
Innovative Model ◽  
Audit Information

Purpose The shift from the traditional audit towards performance audit implies that internal auditors in the public sector function as change agents who underpin the fundamental change process. This paper aims to propose a model that identifies the determinants of organisational change in the public sector that result from internal auditing and the way internal auditors facilitate it. Design/methodology/approach The conceptual discussion of this paper is based on a review of relevant literature, both practical and academic. Findings This paper develops an innovative model that describes the factors leading to auditees’ change readiness after undergoing internal audit processes. The independent variable is audit information quality and the dependent variable, organisational change. Auditees’ perceptions is the mediator variable, and accessibility to audit information is the moderator variable. Practical implications The proposed model suggests the advantages that can be gained by audit-related services, which in turn will add value to the organisation. The relationships between the variables inform practitioners on how to support effective audits as a means of increasing performance and influencing organisational change. Originality/value As the paper offers an innovative model, it may open up new research areas in internal auditing that can be studied by using both qualitative and quantitative methods.

Audit committee effectiveness and financial reporting timeliness

2018 ◽  
Vol 9 (1) ◽  
pp. 34-55 ◽  
Author(s):  
Ahmed Atef Oussii ◽  
Neila Boulila Taktak
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Emerging Market ◽  
Listed Companies ◽  
Audit Committees ◽  
Future Research ◽  
Governance System ◽  
Content Type ◽  
Financial Expertise ◽  
The Impact

Purpose The purpose of this paper is to investigate whether there is any relationship between the effectiveness of an audit committee and the financial reporting timeliness of Tunisian listed companies as proxied by external audit delay (AD). Analysis focuses on five audit committee characteristics: authority, financial expertise, independence, size and diligence. Design/methodology/approach Empirical tests address 162 firm-year observations drawn from Tunisian listed companies during 2011-2013. Findings Multivariate analyses indicate that audit committees with members who have financial expertise are significantly associated with shorter AD. Thus, the results suggest that audit committee financial expertise contributes to the improvement of financial statements’ timeliness. Research limitations/implications The audit committee attributes examined in this study were based on DeZoort et al. (2002) framework. There could be other aspects of audit committee effectiveness such as audit committee tenure and audit committee chair characteristics, which were not addressed in the present study. Thus, future research may consider and examine these other components of audit committee effectiveness. Practical implications Findings have managerial implications. Companies can re-look into how to further improve audit committee composition in order to enhance the timeliness of financial reporting. The issues of audit committee effectiveness and timely reporting also affect regulators and policy makers since they need to play a role in the establishment of effective audit committees and the improvement of financial reporting timeliness. Originality/value This study is one of few that have examined the impact of audit committee effectiveness on ADs in an emerging market country. Findings lend credence to the belief that audit committee members’ financial expertise enhances the quality of financial reporting by firms in a North African market criticized for the lack of maturity of its corporate governance system (Klibi, 2015; Fitch Ratings, 2009).

Does the chief audit executive gender matter to internal audit effectiveness? Evidence from Tunisia

2019 ◽  
Vol 10 (4) ◽  
pp. 424-439
Author(s):  
Ahmed Atef Oussii ◽  
Mohamed Faker Klibi
Keyword(s):  
Quality Assurance ◽  
Internal Audit ◽  
Internal Auditing ◽  
Content Type ◽  
Internal Auditors ◽  
Positive Effects ◽  
Internal Audit Function ◽  
Management Positions ◽  
African Perspective ◽  
Executive Gender

Purpose The purpose of this paper is to investigate whether chief audit executive (CAE) gender has a significant impact on the internal audit function (IAF) effectiveness as proxied by the extent to which the internal audit function uses quality assurance techniques. Design/methodology/approach This study uses a multivariate regression model to analyze the association between CAE gender and the use of quality assurance techniques in fieldwork as a proxy for IAF effectiveness. Data were collected using a survey of 74 internal auditors from Tunisian listed companies. Findings The results indicate that IAFs run by a female CAE are more likely to incorporate quality assurance techniques into fieldwork than IAFs run by male CAEs. Therefore, internal audit departments managed by women tend to be more effective. Practical implications Findings highlight to regulators and reform advocates the importance of having women on the CAE position will improve internal audit practices’ quality. Thus, the gender difference in internal auditing should be more strongly emphasized in different cultural and economic contexts. Originality/value This study provides new insights which add to the existing gender literature by introducing a North African perspective and simultaneously providing new insights that highlight the importance of having women on top management positions in internal auditing and the positive effects which come with it.

Attracting Applicants for In-House and Outsourced Internal Audit Positions: Views from External Auditors

2015 ◽  
Vol 30 (1) ◽  
pp. 143-156 ◽  
Author(s):  
Geoffrey D. Bartlett ◽  
Joleen Kremin ◽  
K. Kelli Saunders ◽  
David A. Wood
Keyword(s):  
Critical Role ◽  
Internal Audit ◽  
Job Applicants ◽  
Internal Auditing ◽  
Internal Auditors ◽  
External Auditors ◽  
Internal Audit Function ◽  
Career Option ◽  
Negative Perceptions ◽  
Survey Results

SYNOPSIS While the internal audit function (IAF) plays a critical role in organizations, it faces challenges in finding sufficient numbers of high-quality job applicants to fill its ranks. The results of two experiments suggest that practicing external auditors are twice as likely to apply for positions that are labeled as accounting positions rather than either in-house or outsourced internal audit positions. The results also suggest that external auditors have negative perceptions of the profession and work environment of internal auditors—especially in-house internal auditors relative to outsourced internal auditors—and are more likely to recommend that mediocre rather than top students apply to work in internal auditing. We also provide survey results from experienced external auditors about aspects of internal auditing that may be improved to make it a more attractive career option. Taken together, the results suggest internal auditing faces significant hiring challenges, but also offer ways to mitigate these challenges.

Guidance on internal audit's interface with regulators

2014 ◽  
Vol 29 (3) ◽  
pp. 268-283 ◽  
Author(s):  
Andrew D. Chambers
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Internal Audit ◽  
Internal Auditing ◽  
Content Type ◽  
Auditing Standards ◽  
Supervisory Process ◽  
The Relationship ◽  
Audit Standards ◽  
Practical Implications

Purpose – The purpose of this paper is to identify and interpret expectations of regulators about the interface between regulators and internal audit. Design/methodology/approach – Contemporary pronouncements are subjected to a content analysis about the relationship demands that regulators place upon internal audit. Comparison is made with internal auditing standards. The paper identifies the significant challenges and considers the future. Findings – Regulators are increasingly prescriptive about what they expect from internal audit. The scope of internal audit work must cover all matters of interest to the regulator. Internal audit is now regarded as part of the supervisory process. Unlike financial reporting and external auditing, there is no attempt to regulate the setting of internal audit standards, but regulators themselves are enunciating internal audit requirements that go beyond the standards. Research limitations/implications – The paper draws mainly upon developments in the financial sector, which is leading the way in prescribing the interface between regulator and internal audit. Practical implications – The enhanced requirements of regulators impact upon internal audit's other relationships on the internal audit universe and scope, and on staffing internal audit. Originality/value – This is the first attempt to synthesise what regulators currently require from their relationship with internal audit, which needs to be reflected in internal audit charters and in future releases of global internal auditing standards.

An examination of the impact of compliance with internal audit standards on financial reporting quality

2019 ◽  
Vol 17 (3) ◽  
pp. 498-518 ◽  
Author(s):  
Abdulaziz Alzeban
Keyword(s):  
Financial Reporting ◽  
Middle Eastern ◽  
Internal Audit ◽  
Reporting Quality ◽  
International Standards ◽  
Financial Reporting Quality ◽  
Annual Reports ◽  
Content Type ◽  
Internal Auditors ◽  
The Impact

Purpose The purpose of this study is to explore the impact of internal audit (IA) compliance with the International Standards for the Professional Practice of Internal Auditing (ISPPIA) on financial reporting quality (FRQ). Design/methodology/approach Data were gathered from 142 chief audit executive from Saudi listed companies, and also from the annual reports of the participating companies. Two proxies are used to measure FRQ, namely, discretionary accruals and accruals quality. Findings The findings reveal that companies demonstrating higher IA compliance with standards have better FRQ. They also indicate that the interaction between IA competency and its compliance with standards has an impact on FRQ. Further, the findings provide evidence that FRQ is higher in companies where IA departments have formal documentation, that is, entirely consistent with the ISPPIA. These results retain their robustness after further analysis. Originality/value In offering these findings, the paper contributes to the existing IA literature by introducing evidence from a Middle Eastern context, namely, Saudi Arabia, of the link between IA compliance with the ISPPIA and FRQ. It confirms the role of IA in FRQ, and hence, as an element of corporate governance, information, which is valuable for both the institute of internal auditors and companies.

Characteristics of the internal audit and external audit hours: evidence from S. Korea

2016 ◽  
Vol 31 (6/7) ◽  
pp. 629-654 ◽  
Author(s):  
Ho-Young Lee ◽  
Hyun-Young Park
Keyword(s):  
Internal Audit ◽  
Financial Statement ◽  
External Audit ◽  
Content Type ◽  
Internal Auditors ◽  
External Auditors ◽  
Audit Efficiency ◽  
Financial Statement Audit ◽  
Legal Expertise ◽  
Practical Implications

Purpose Using 5,055 sample firm-years in Korea between 2009 and 2013, this paper aims to examine the association between the characteristics of the internal audit and the number of external audit hours as a proxy for audit efficiency. Design/methodology/approach This study is motivated by the International Standard on Auditing No. 610: “Using the work of internal auditors”. This auditing standard guides external auditors in using the work of internal auditors to obtain audit evidence and consult internal auditors for direct assistance. The authors expect that external audit efficiency will increase when the work of competent internal auditors is used. Findings The authors find that the number of internal auditors relative to the number of employees is associated with the number of external audit hours. This result suggests that the greater the availability of internal auditors, the greater their contribution will be to the financial statement audit and the more efficient the audit. The authors find evidence that external auditors use the work of internal auditors with accounting and legal expertise to improve audit efficiency. They also find some evidence that the work of internal auditors with greater availability is more effective during initial external audit engagements. Originality/value This study adds to the extant literature on the contributions of internal auditors to external audits by using archival data and by measuring audit effort using a large database of audit hours. In addition, our findings have practical implications for firms and external auditors who are evaluating the role and value of using the work of internal auditors. The authors also believe that the findings will be of interest to regulators or auditing standards boards.

Interaction between internal and external auditors – insights from a developing country

2019 ◽  
Vol 27 (6) ◽  
pp. 840-861
Author(s):  
Grace Mubako ◽  
Susan Charowedza Muzorewa
Keyword(s):  
Developing Country ◽  
Online Survey ◽  
Internal Audit ◽  
Future Research ◽  
Content Type ◽  
Internal Auditors ◽  
External Auditors ◽  
The Relationship ◽  
E Mail ◽  
African Setting

Purpose The purpose of this study is to examine the nature and extent of interaction and the relationship between internal auditors (IAs) and external auditors (EAs) from the perspective of the IAs in a developing country, Zimbabwe. Design/methodology/approach This study was carried out by soliciting the opinions of chief audit executives (CAEs) in Zimbabwe through an online survey that was distributed via e-mail. Findings The study finds that the interaction between the IAs and EAs is limited and that EAs may not be making full use of the internal audit function (IAF). Findings also suggest that the relationship between the auditors is, in some instances, strained and that the actions of management do not always facilitate the fostering of a good, productive relationship between the auditors. Originality/value Results of this study contribute to the understanding of the nature and extent of interaction between the IAF and EAs in an African setting. The study also solicits qualitative data about the relationship between IAs and EAs where previous research has largely focused on objective measures, failing to take into account factors such as attitudes and biases, which can affect this relationship. Finally, the results of this study bring to light important, previously under-explored issues, which provide opportunities for future research.

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