Organization of Internal Audit by Professional Participants of the Securities Market

Auditor ◽  
2021 ◽  
pp. 39-42
Author(s):  
E. Lukicheva
Keyword(s):  
Internal Control ◽  
Internal Audit ◽  
Securities Market ◽  
Regulatory Document ◽  
Investment Activity ◽  
Professional Activities

Th is article discusses the main provisions of a new regulatory document that will enter into force on October 1, 2021, namely, Bank of Russia Ordinance No. 5683-U dated December 28, 2020, which regulates the requirements for organizing internal control and internal audit by professional participants in the securities market. For the fi rst time, this document speaks of the obligation to create an internal audit service and defi nes its functions. Th e attractiveness of the securities market for clients and their investment activity depend on the professional activities of participants in the securities market.

Effect of Financial Control Mechanisms on Performance of Income Generating Units in Selected Public Universities in Kenya

2019 ◽  
Vol 3 (V) ◽  
pp. 286-304
Author(s):  
Shadrack Musunkui Towett ◽  
Isaac Naibei ◽  
Williter Rop
Keyword(s):  
Risk Management ◽  
Internal Control ◽  
Public Universities ◽  
Management Strategies ◽  
Internal Audit ◽  
Simple Random Sampling ◽  
Target Population ◽  
Control Measures ◽  
Financial Control ◽  
Control Mechanisms

In an attempt to bridge the gap between the budgetary allocations and actual expenditures most universities have started income generating units with the aim of boosting their operational expenses. Whereas there is the potential of the use of Income Generating Units (IGUs) to generate additional funds, most universities still experience challenges in full implementation and realization of the revenue goal. This study therefore sought to determine the financial control mechanisms affecting performance of income generating units among selected public universities. The study sought to determine the effect of internal controls, credit policies, financial risk management and internal audit on performance of income generating units in selected universities. Targeted population was all the 290 employees in the IGU departments of selected public universities. The respondents were sampled using simple random sampling so as to enable equal representation of the target population without any biasness. Data collection was done using the questionnaire to ensure sufficient data was collected from the respondents. Descriptive statistics assisted in the determination of respondent’s views and opinions on every variable. Qualitative data was analysed using content analysis into meaningful, precise and comprehensive statements and presented in quotations. Data analysis was done using SPSS version 21 and data presented in form of figures and tables. The study ensured that all ethical considerations were considered by the study. The findings were that most employed Income Generating Units in Public Universities were Collection of rental fees, Evening and executive programs and Trainings of both short and long courses while the least was established to be Sales of memorabilia and books. All the financial control mechanism investigated namely internal audit, internal control measures, risk management strategies and credit policies had large extents of adoption in the selected universities. The results of the regression analysis showed that the financial control mechanisms investigated had a significant positive relationship on performance of the IGUs. Specifically, 47% of the variation of the performance of IGUs was established to be explained by the studied factors. The study concluded that the performance of the IGUs among the selected public universities was largely accounted for by the implemented financial control measures. Therefore effective financial control mechanisms is concluded to lead to better IGU performance whereas shortcomings in the financial control mechanisms is concluded to lead to diminished returns in the IGUs. The study recommended that the management in charge of the IGU department in the public universities to prioritize the formulation, implementation and monitoring of financial control mechanisms in the IGUs. To facilitate effective financial controls, the study recommended that the management especially those in the audit section to conduct regular checks and inspections on the IGUs. Additionally, frequent reforms were recommended to address the shortcomings experienced in integrating financial control measures in IGUs.

CURRENT STATE OF REGULATION OF INTERNAL FINANCIAL CONTROL AND INTERNAL FINANCIAL AUDIT IN THE BUDGET SECTOR

2020 ◽  
Vol 1 (9) ◽  
pp. 119-124
Author(s):  
D. R. GINIYATULLINA ◽  
◽  
◽  
Keyword(s):  
Internal Control ◽  
Internal Audit ◽  
Regulatory Framework ◽  
International Standards ◽  
Financial Control ◽  
Budget Process ◽  
Federal Law ◽  
Government Sector ◽  
General Government ◽  
Financial Audit

Since 2013, there has been an active transformation of the regulatory framework related to the implementation of international standards of internal audit in Russian practice, which regulates the organization and implementation of internal financial control and internal financial audit in the general government sector. However, the regulatory framework is constantly undergoing changes that are associated with the need to take into account the specifics of the functioning of these organizations. Particular attention is paid to the development of the methodological foundations of internal financial control and audit on the basis of amendments made by the Federal Law of July 26.07.2019, 199-FZ to the Budget Code of the Russian Federation. In particular, internal financial control was removed from the budgetary powers of participants in the budget process. When these changes were implemented, a lot of questions arose, such as the exclusion of internal financial control as a separate budgetary authority means that this type of control can be omitted, journals and internal control cards are not kept.

External Auditors' Involvement in the Internal Audit Function's Work Plan and Subsequent Reliance Before and After a Negative Audit Discovery

2016 ◽  
Vol 35 (4) ◽  
pp. 159-173 ◽  
Author(s):  
Byron J. Pike ◽  
Lawrence Chui ◽  
Kasey A. Martin ◽  
Renee M. Olvera
Keyword(s):  
Internal Control ◽  
Internal Audit ◽  
Internal Controls ◽  
Professional Standards ◽  
Data Availability ◽  
Internal Auditors ◽  
External Auditors ◽  
Internal Audit Function ◽  
Anchoring Bias ◽  
Before And After

SUMMARY To reduce redundancies and increase efficiency in the evaluation of internal controls (PCAOB 2007, 402–403), professional standards encourage coordination between external auditors and their clients' internal audit function (IAF). Recent surveys of internal auditors find that a component of this coordination is external auditors' involvement in developing the IAF's audit plans. Nevertheless, it is not known how such involvement affects external auditors' reliance on the internal control test work of the IAF, either before or after a negative audit discovery. Based on an experiment with 107 experienced auditors, we find that external auditors involved in the development of the IAF's audit plan perceive the IAF as more objective and that both objectivity and involvement contribute to these auditors' placing more reliance on the IAF as compared to external auditors with no involvement. This initial reliance results in the involved auditors' proposing reductions to the audit budget and re-performing less of the IAF's work. Consistent with an anchoring bias, we find that involvement leads to external auditors' continuing to place greater reliance on the IAF's work, even after they become aware of a negative audit discovery that should not have occurred had the client's controls been effective. Data Availability: Data are available from the authors on request.

Organizational identity, professional identity salience and internal auditors’ assessments of the severity of internal control concerns

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ian Burt ◽  
Theresa Libby
Keyword(s):  
Professional Identity ◽  
Internal Control ◽  
Organizational Identity ◽  
Internal Audit ◽  
Identity Salience ◽  
Content Type ◽  
Internal Auditors ◽  
Internal Control Weaknesses ◽  
The Impact ◽  
Benefits And Costs

Purpose This paper aims to examine whether increasing the salience of the internal auditor’s professional identity, defined by the expectations of their professional group, increases internal auditors’ judgments of the severity of internal control concerns when their organizational identity is high. Design/methodology/approach This paper tests the hypothesis using a laboratory experiment with internal auditors as participants. Findings The results support the hypothesis that professional identity salience moderates the relation between organizational identity and the assessed severity of identified internal control weaknesses. Increasing the salience of professional identity results in a more severe assessment of identified internal control weaknesses when organizational identity is high than when it is low. Originality/value Prior research in the lab and in the field provides mixed results about the impact of organizational identity on internal auditors’ judgments of the severity of identified internal control concerns. This paper contributes to the discussion on this issue. In addition, the results have implications for the debate about the benefits and costs of in-house versus out-sourced internal audit functions.

The Role of Accounting Mechanisms for Corporate Governance in Reducing Creative Accounting Practices in Telecommunications Sector Companies in Riyadh City: An Empirical Study: دور الآليات المحاسبية لحوكمة الشركات في الحد من ممارسات المحاسبة الإبداعية في شركات قطاع الاتصالات بمدينة الرياض: دراسة ميدانية

2020 ◽  
Vol 4 (15) ◽  
Author(s):  
Lamis Jameel Banasser, Maha Faisal Alsayegh
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Audit Committee ◽  
Internal Audit ◽  
Internal Auditors ◽  
External Auditors ◽  
Riyadh City ◽  
Creative Accounting ◽  
Telecommunications Sector

The study aimed to identify the role of accounting mechanisms for corporate governance in reducing creative accounting practices in telecommunications sector companies in Riyadh city. A descriptive analytical approach was followed to conduct the field study. Sample of the study consisted of members of the audit committee, internal auditors, accountants from the surveyed telecommunications’ sector companies, and the external auditors in the audit offices that specialized on auditing the examined sample of companies. Questionnaire was used as a data collection method. Results showed that activating the role of accounting mechanisms for corporate governance can greatly contribute in limiting creative accounting practices. As they are controlling mechanisms that capable of protecting companies, shareholders and stakeholders from any manipulation or misleading information in the financial statements. Further, internal audit plays a major role in limiting creative accounting practices by examining and evaluating the effectiveness of the internal control system. Furthermore, the independence and competence of the external auditor and his commitment to the rules of conduct and ethics of the profession contribute greatly in limiting creative accounting practices in the examined companies. The study recommended the necessity of holding specialized training courses for members of audit committees, internal auditors and external auditors on methods of detecting creative accounting practices to combat and reduce them.

HISTORICAL STAGES OF FORMATION AND DEVELOPMENT OF INTERNAL CONTROL

2021 ◽  
Vol 296 (4) ◽  
pp. 14-20
Author(s):  
AnnА KOZACHENKO ◽  
Keyword(s):  
Internal Control ◽  
Private Property ◽  
Internal Audit ◽  
Economic Life ◽  
Capitalist System ◽  
Historical Aspect ◽  
Economic Relations ◽  
History Of ◽  
Economic Formation ◽  
Means Of Production

The article highlights the views of scientists on the allocation of periods (stages) in the history of internal control, which differ in the following features: the emergence and development of socio – economic relations that existed at different times; diversification of objects and subjects of control; complicating the tasks of control over the different levels of development of productive forces and equipment of each society; specific methodological techniques. Thus, the first manifestations of control are observed during the period of primitive communal system. The period of slavery is considered the stage of the emergence of internal control. Characteristic of this period was physical coercion to work. In the period of the feudal system, the peculiarities of the development of socio-economic formation of European states are the distinction between external and internal audit, and accounting registers to reflect the facts of economic life, which served for entries in the accounts of the General Ledger. In addition, control activities were manifested in the movement of credit and settlement transactions between buyers, in settlements between buyers and banks, in production processes and private ownership of the means of production. The capitalist system of production did not require many special control bodies, and its functions were carried out directly by the owners of the means of production. The basis of capitalism was the private property of the bourgeoisie on the means of production, but not on the worker, who at that time received more freedom. It was during the communist formation that thorough work was carried out on the methodological support of internal economic control, but its active development began after the declaration of independence of Ukraine, by borrowing the foundations in foreign countries. Thus, the periodization presented in the article helps to trace the historical aspect of the development and formation of internal control as a control system as a whole, in a certain period of time in which.

scholarly journals KEEFEKTIFAN AUDIT INTERNAL PEMERINTAH DAERAH

2017 ◽  
Vol 20 (1) ◽  
pp. 33
Author(s):  
Hadi Mahmudah ◽  
Bambang Riyanto LS
Keyword(s):  
Control System ◽  
Local Government ◽  
Control Systems ◽  
Internal Control ◽  
Positive Impact ◽  
Internal Audit ◽  
System Management ◽  
Management Support ◽  
Internal Control System ◽  
Audit Effectiveness

Penelitian ini menguji efektifitas sistem pengendalian intern, dukungan manajemen dan audit professionalism terhadap keefektifan audit internal. Sampel dalam penelitian ini adalah 39 Inspektorat Daerah dari enam Provinsi. Penelitian ini menggunakan regresi berganda untuk menganalisis data. Hasil penelitian menunjukkan bahwa sistem pengendalian intern dan dukungan manajemen berpengaruh secara positif terhadap keefektifan audit internal. Penelitian ini gagal memberikan bukti empiris audit professionalism berpengaruh terhadap keefektifan1 audit internal. Penelitian ini memperkaya penelitian yang sudah ada terkait keefektifan audit internal dan penekanan pentingnya sistem pengendalian intern di pemerintah daerah.This study examined the effectiveness of internal control system, management support, and audit professionalism on internal audit effectiveness of local government. The sample consists of 39 regional inspectorates of six provinces in Indonesia. By using multiple regressions, this study found that internal control system and management support has positive impact on the effectiveness of the internal audit. However, there is no support for the audit professionalism on internal audit effectiveness. This study enriches existing research related to the effectiveness of the internal audit and emphasis the importance of internal control systems in local government.

scholarly journals Common Characteristics and Differences in External and Internal Auditing

2018 ◽  
Vol 4 (1) ◽  
pp. 261-267
Author(s):  
Fatmir Mehmeti
Keyword(s):  
Internal Control ◽  
Value Added ◽  
Internal Audit ◽  
Daily Practice ◽  
Financial Statements ◽  
Financial Information ◽  
Financial Reports ◽  
External Auditors ◽  
Logical Concept ◽  
Public Company

Abstract Many scholars have shown that failure in leading big companies as well as the latest financial crises have led the auditing market to perceive traditional auditing more as a legal requirement rather than as a value added for the company. There are others that do not completely agree to this, but they all accept that the auditing as a profession should accept changes which will affect the value added for the company from auditing. Nowadays the companies are required more accountability rather that it was required before, perversely only financial reports were reported by the companies. Auditing is a process which confirms the statement provided by the company management regarding the information in financial statements that are real and accurate. Auditing has to be based on evidences and logical concept for better understanding. For companies that operate in the market, it is important to provide financial information that is consistent, reliable and complete for all users of the financial statements (banks, potential shareholders and the international community). In daily practice of entities we have two kinds audit, the internal and external audits. Usually, these are interlinked and complementary, with the ultimate aim that the (overall) audit is more effective and the reports that will emerge are fully arguable and meaningful. The internal audit has an important role which is to increase the effectiveness of internal control in private or public company. Internal audit has the responsibility of informing the management of the institution of deficiencies or weaknesses in the internal control system. External auditors are the fist line of the front for companies liadership. They play a key role in verifying the financial information provided to shareholders. External auditors inspect the financial statements prepared by the entity and provide assurance and independent opinion if these statements represent a true and fair view of the entity's condition for the year under review.

scholarly journals The role and tasks of the internal audit and audit committee as bodies supporting effective corporate governance in insurance sector institutions in Poland

2012 ◽  
Vol 3 (4) ◽  
pp. 23-39 ◽  
Author(s):  
Elżbieta Izabela Szczepankiewicz
Keyword(s):  
Control Systems ◽  
Internal Control ◽  
Audit Committee ◽  
Economic Recession ◽  
Internal Audit ◽  
Financial Supervision ◽  
Insurance Sector ◽  
Internal Control System ◽  
The Impact ◽  
Effective Supervision

Faced with the risk of consecutive waves of financial crisis and economic recession, government committees, financial supervision authorities and financial institutions themselves – both in Poland and worldwide – have launched a number of measures to make the supervision of insurance sector institutions more effective, particularly in aspects related to efficient risk management and internal control. The article describes the impact of the amendment of laws and other regulations on the development of the present internal control systems in insurance sector institutions. It draws attention to the need for a new structure of the internal control system, and the role and purpose of the internal audit and the audit committee as the bodies supporting effective supervision in insurance undertakings and reinsurance undertakings.

scholarly journals Internal Auditing Quality and Earnings Management: Evidence from Sultanate of Oman

2021 ◽  
Vol 4 (2) ◽  
pp. 115-124
Author(s):  
Hind Juma Alyaarubi ◽  
Dua Said Alkindi ◽  
Essia Ries Ahmed
Keyword(s):  
Earnings Management ◽  
Audit Quality ◽  
Internal Audit ◽  
Secondary Data ◽  
Securities Market ◽  
Internal Auditing ◽  
Sultanate Of Oman ◽  
Listed Firms ◽  
Two Sectors ◽  
Research Show

The main purpose of this research is to determine the link between internal auditing quality and earnings management in Omani companies.  In this research, a sample size of 80 was designated from two sectors (Industrial, and Service) in Muscat Securities Market (MSM) in Sultanate of Oman. The secondary data collected is examined with Smart PLS 3.0. The findings of the research show a positive link between Internal audit quality and earnings management in both sectors (industrial and service). This finding indicates that the increase in audit quality will affect to enhance and improve the earning management in Omani listed firms.

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