scholarly journals Driving Audit Committee Disclosure: Legislation Versus Best Practice

2019 ◽  
Vol 8 (1) ◽  
pp. 36-50
Author(s):  
Philna Coetzee ◽  
Lourens J. Erasmus
Keyword(s):  
Best Practices ◽  
South African ◽  
Voluntary Disclosure ◽  
Audit Committee ◽  
Best Practice ◽  
The Body ◽  
Audit Committees ◽  
Policy Makers ◽  
Body Of Knowledge ◽  
Support Organizations

Stakeholders have no alternative than to rely on the credibility and effectiveness of governance and oversight structures within organizations, to protect their interest. This study investigates whether the expectation for expanded disclosure on audit committees has been adopted as part of organizational culture. The evolution of audit committee guidance in the King reports and prominent global reports were analyzed and compared to legislation governing all sectors within South Africa. A document analysis in the form of a structured content analysis was conducted to determine adherence to King guidance by South African organizations. Optimal scaling was applied to determine dimensions of disclosure, with respect to audit committee best practice. Finally, the level of adherence to legislation versus adherence to best practices is gauged within each dimension. Results support organizations to have generally increased disclosure on audit committees’ composition and role. The study adds to the body of knowledge on voluntary disclosure of audit committee best practice, to be considered by policy makers and management, on what may strengthen the credibility and effectiveness of audit committee oversight as perceived by the stakeholder. The result also presents a foundation for further research within this area.

The Audit Committee Anomaly in South African Local Governance

Politeia ◽  
2019 ◽  
Vol 38 (2) ◽  
Author(s):  
Lourens Jacobus Erasmus ◽  
Thabo Matsimela
Keyword(s):  
South African ◽  
Audit Committee ◽  
Best Practice ◽  
Good Governance ◽  
Local Governance ◽  
Audit Committees ◽  
Municipal Finance ◽  
Finance Management ◽  
Theoretical Perspectives

Stakeholders of organisations have to rely on the credibility and effectiveness of governance by management and oversight structures, such as the audit committee, to protect their interests. Drawing on the agency theory, the role of the audit committee is globally accepted to be one of oversight and monitoring. In contrast, the Municipal Finance Management Act requires South African municipal audit committees to be independent advisory functions, invoking the institutional theory in terms of symbolic display. In this article the research objective is to argue the anomaly in the Municipal Finance Management Act regarding audit committees' role, given that this deviates from the globally accepted norm. This conceptual article follows an interpretive approach, which includes a document analysis, firstly to establish the prevalence of the audit committee advisory expectation and, secondly, to argue from theoretical perspectives, whether the audit committee as an advisory function, has validity. The findings suggest that legislators should consider amending the Municipal Finance Management Act to reflect audit committee best practice or change the name of the municipal audit committee to that of an advisory committee to avoid misleading local communities in terms of what may be perceived as good governance practice. This article thus informs policymakers of an apparent governance anomaly in South African legislation.

scholarly journals The Municipal Audit Committee Self-review Threat: The South African Dilemma

2021 ◽  
Vol 24 ◽  
Author(s):  
Lourens Jacobus Erasmus ◽  
Thabo Matsimela
Keyword(s):  
South African ◽  
Audit Committee ◽  
Best Practice ◽  
The Self ◽  
Audit Committees ◽  
Primary Data ◽  
International Governance ◽  
Municipal Finance ◽  
Ethical Practices ◽  
Finance Management

Context: Corporate governance in South African municipalities is severely lacking and retrograding. The audit committee should essentially be an oversight committee that acts on behalf of the municipal council to ensure that key controls are operating, ethical practices are reinforced, key accounting estimates and judgements are properly made, and that internal and external audits are effective. However, the Municipal Finance Management Act requires that the audit committee acts in an advisory capacity to among others, the municipal management. This statutory requirement is in contrast to international governance code best practice for audit committees. Purpose: The aim of this study was to establish how municipal audit committee members perceive their role and whether they realise the self-review threat brought about by the role conflict between legislation and internationally accepted best practice. Design: A web-based survey questionnaire was used to collect primary data from municipal audit committee members. Findings: The study found that municipal audit committee members seem to be unaware of the self-review threat their perspectives on their role hold. Practical implications: Results of the study may assist policy makers and other stakeholders in drafting regulations and legislation governing the functioning and establishment of independent municipal audit committees in South Africa. Originality: Although the conflicting roles of assurance (oversight) and consulting (advisory) have received attention in the disciplines of external auditing and internal auditing, similar attention is needed in the case of South African municipal audit committees.

scholarly journals The Impact of Audit Committees on US Nonprofit Organizations’ Governance

2020 ◽  
Vol 27 (1) ◽  
pp. 30
Author(s):  
Husam Abu-Khadra
Keyword(s):  
Nonprofit Organizations ◽  
Audit Committee ◽  
Nonprofit Sector ◽  
The United States ◽  
Preliminary Evidence ◽  
Securities And Exchange Commission ◽  
Audit Committees ◽  
Public Companies ◽  
Policy Makers ◽  
The Impact

All public companies in the United States are required by the securities and exchange commission (SEC) to have an audit committee. Such enforcement can be attributed to high-profile corporate failures and their connections to nonexistence, ineffective or weak audit committees and governance. Despite the efforts to establish a similar argument and enforcement structure for the nonprofit sector, the internal revenue service (IRS) has not pursued legislation, and no empirical evidence has been established to support any public policy changes. This paper contributes to the literature in this field by being the first study to examine 124,980 nonprofit organizations during the period of 2010 to 2015 to test the association between governance in nonprofit organizations and audit committees. We included fifteen measures from these organizations’ IRS Form 990 filings to formulate the study variables. We found significant evidence that the existence of audit committees improves the governance scores of nonprofit organizations. Our study findings have significant implications for nonprofit executives, policy makers and any other interested parties; these findings act as preliminary evidence to support more proactive policies regarding mandatory audit committees for nonprofit organizations. 

scholarly journals The state of internal audit’s regulatory mandate

2016 ◽  
Vol 6 (3) ◽  
pp. 93-99
Author(s):  
Christo Ackermann
Keyword(s):  
Board Of Directors ◽  
South African ◽  
Best Practice ◽  
Internal Audit ◽  
Audit Committees ◽  
Detailed Review ◽  
Internal Audit Function ◽  
Key Stakeholders ◽  
The Board Of Directors ◽  
State Of Affairs

The importance of an effective internal audit function in South African municipalities have been recognised insofar as internal audit functions are legally mandated to exist within municipalities. This also means that legally, internal audit has certain mandates which must be fulfilled in order to add value to management and audit committees, and ultimately, to the board of directors. Even though internal audit is sanctioned by this important legal mandate, evidence shows that internal audit does not always fulfil this mandate. This state of affairs has prompted a detailed review of the relevant laws and regulations governing the work of internal audit in South African municipalities in order to determine the extent to which key stakeholders find the regulatory work of internal audit useful in discharging their (stakeholders’) oversight responsibilities. Questionnaires were administered to audit committees. The results summarise the extent to which internal audit’s work assists audit committees in their oversight responsibilities as this ultimately affects the ability of audit committees to fulfil these responsibilities to the board of directors. The results indicate that audit committees are greatly dependent on internal audit as a provider of assurance on a variety of legally mandated variables. The results of this study can be used as a measure of best practice of the legally mandated duties performed by internal audit. It can also be used by other researchers in comparative studies and by practitioners to benchmark their work in order to better serve audit committees and ultimately, the board of directors.

scholarly journals UNDERSTANDING THE SOUTH AFRICAN FINANCIAL MARKETS: AN OVERVIEW OF THE REGULATORS

Obiter ◽  
2021 ◽  
Vol 31 (3) ◽  
Author(s):  
Lynette Swart ◽  
Vivienne A Lawack-Davids
Keyword(s):  
Financial Markets ◽  
South African ◽  
Regulatory Framework ◽  
The Body ◽  
Regulatory Environment ◽  
The South ◽  
Body Of Knowledge

This article examines the regulatory framework pertaining to the South African financial markets. The authors explain selected terminology and provide an overview of regulators in order to create an understanding of the regulatory environment to enhance transparency and add to the body of knowledge in financial markets law.

Managing material value creation matters in integrated reporting

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Natasja Steenkamp ◽  
Roslyn Roberts
Keyword(s):  
South African ◽  
Value Creation ◽  
Design Methodology ◽  
Qualitative Approach ◽  
The Body ◽  
Structured Interviews ◽  
Integrated Reporting ◽  
Process Information ◽  
Content Type ◽  
Body Of Knowledge

Purpose This paper aims to explore how advanced integrated report preparers internalise and operationalise material value creation information to manage the generation of such information for the integrated report. Design/methodology/approach The paper adopts a qualitative approach using in-depth semi-structured interviews to examine how information about material value creation matters in six South African organisations are managed. Findings The findings will be useful to integrated reporting adopters as to how they might implement appropriate processes and systems to determine, communicate, collect and process information about matters that substantively affect their value creation. Originality/value The paper contributes to the body of knowledge by providing insight on how material value creation matters are determined, communicated internally and information about such matters generated.

Enhancing Perceived and Actual Audit Committee Effectiveness through Financial Expert Certification

2012 ◽  
Vol 6 (2) ◽  
pp. A15-A25 ◽  
Author(s):  
Jonathan Grenier ◽  
Brian Ballou ◽  
Seth Philip
Keyword(s):  
Best Practices ◽  
Audit Committee ◽  
Potential Method ◽  
Audit Committees ◽  
Certification Program ◽  
Audit Process ◽  
External Auditors ◽  
Strong Signal ◽  
Financial Expert ◽  
Role Sharing

SUMMARY:  The purpose of this paper is to generate and inform academic, practitioner, and regulatory discussion on means to promote perceived and actual audit committee effectiveness. As one potential method, we propose that the SEC initiate a CPE-driven certification program for audit committee members designated as financial experts. Our proposal addresses many of the challenges that post-SOX audit committees face (cf. Beasley et al. 2009; Cohen et al. 2010) by emphasizing their oversight role, sharing audit committee best practices, enhancing the accountabilities of external auditors, and sending a strong signal to stakeholders that the audit committee owns the audit process.

scholarly journals Audit committee compensation, best practices and audit fees

2019 ◽  
Vol 50 (1) ◽  
Author(s):  
Bum-Jin Park
Keyword(s):  
Best Practices ◽  
Financial Reporting ◽  
Regression Models ◽  
Audit Committee ◽  
Best Practice ◽  
Audit Quality ◽  
Positive Association ◽  
Audit Fees ◽  
High Quality ◽  
The Relationship

Background: It is extremely important that an audit committee (AC) monitors a company’s financial reporting process, and that the committee engages a high-quality auditor to carry this out effectively. Prior research on ACs has paid much attention to the relationship between AC best practices and audit fees (AF). Although compensation is a means of aligning interests between ACs and stakeholders, previous studies have neglected the complementary interaction between AC compensation and compliance with best practices on audit quality.Objectives: The purpose of this study is to investigate how compensation for ACs affects AF, and how the association is moderated by compliance with best practices to capture effective monitoring.Method: The regression models are estimated to verify how the relationship between AC compensation and AF is moderated by AC compliance with best practice. Moreover, the logistic regression models are used to investigate how the relationship between AC compensation and the opportunistic achievement of earnings goals is moderated by AC compliance with best practice.Results: The findings show a positive association between the levels of compensation AC members receive and AF, which is reinforced in firms that have ACs that comply with all best practices.Conclusion: The results suggest that highly paid ACs engage high-quality auditors to complement their function of monitoring management and AC compensation and compliance with best practices are complementary to enhance audit quality. This study thus provides the interesting insights that can be applicable to countries with requirements relating to the compensation schemes for ACs or the formation of the AC.

scholarly journals Doing it Right - Critical Success Factors for Design Thinking Implementation

2019 ◽  
Vol 1 (1) ◽  
pp. 3851-3860
Author(s):  
Danielly De Paula ◽  
Franziska Dobrigkeit ◽  
Kathryn Cormican
Keyword(s):  
Best Practices ◽  
Thematic Analysis ◽  
Critical Success Factors ◽  
Success Factors ◽  
Design Thinking ◽  
The Body ◽  
Successful Implementation ◽  
Research Topics ◽  
Critical Success ◽  
Body Of Knowledge

AbstractProficiency in design thinking (DT) can contribute to the success of many companies. Successful implementation of DT can be achieved by identifying its Critical Success Factors (CSFs). Critical success factors are items or actions that should be present in a particular project or situation in order to be successful. However, to date, there has not been any formal study on synthesizing the critical success factors for a successful DT implementation based on existing research. In light of this, the aim of this paper is to develop a conceptual framework that proposes factors that may play a role in influencing the success of the DT implementation. Based on best practices and protocols from thematic analysis, we analyzed and synthesized extant literature in order to recognize research topics from the selected papers and categorize them into specific themes to build a framework. This study significantly contributes to the body of knowledge related to DT by offering the first attempt to identify CSFs for DT implementation, which can allow companies to take required precautions to elude failures or problematic areas and be able to increase the success rate of implementing DT

scholarly journals Mobile Government Adoption Model Based on Combining GAM and UTAUT to Explain Factors According to Adoption of Mobile Government Services

2020 ◽  
Vol 14 (03) ◽  
pp. 199 ◽  
Author(s):  
Mohammed Amin Almaiah ◽  
Ahmad Al-Khasawneh ◽  
Ahmad Althunibat ◽  
Saleh Khawatreh
Keyword(s):  
Integrated Model ◽  
The Body ◽  
Added Value ◽  
Adoption Process ◽  
Critical Factors ◽  
Key Factors ◽  
Policy Makers ◽  
Government Services ◽  
Body Of Knowledge ◽  
Adoption Model

<p class="Default">This research examines the mobile-government services adoption, by combining both UTAUT and GAM models with adding new constructs for explaining the key factors that affect on adoption of mobile-government services. As a result, the study identified the critical factors that influence users’ to adopt the system, and developed an integrated model as a powerful tool that assists in the adoption process of mobile-government applications. The novelty of this research will be an added value to the body of knowledge and its implications will be vital for researchers and decision/policy makers who are willing to make a change.</p>

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