scholarly journals Internal Control And Accounting Systems Documentation: A Case Study

2012 ◽  
Vol 8 (3) ◽  
pp. 279
Author(s):  
Jeffrey E. Michelman ◽  
Bobby E. Waldrup ◽  
Melanie R. Gillman
Keyword(s):  
Organizational Behavior ◽  
Internal Control ◽  
Control Structure ◽  
Internal Audit ◽  
Accounting Profession ◽  
Accounting Systems ◽  
Sarbanes Oxley ◽  
Regulated Firms ◽  
Student Intern

This case chronicles the experiences of a student intern as she assists in the transformation of a transportation companys internal audit department in a process to go public and come into compliance with the provisions of the Sarbanes-Oxley Act. It is designed to give students an in-the-trenches viewpoint of the sweeping effects that SOX has on the internal control structure of regulated firms. The topics of co-sourcing, documentation, re-performance, and mentoring are weaved into the story as examples of how the accounting profession affects organizational behavior and culture. The case is appropriate for undergraduate and graduate auditing, systems or internal audit classes. Moreover, the case would serve as an excellent aid for faculty and students involved in accounting internships.

scholarly journals The Efficiency of Applying the Internal Control Components Based on COSO Framework to Transparently Carry out Tasks and Services, Ensure Integrity and Enhance Quality and Efficiency: Case Study - The Greater Amman Municipality

2020 ◽  
Vol 11 (2) ◽  
pp. 371
Author(s):  
Ola Muhammad Khersiat
Keyword(s):  
Internal Control ◽  
Positive Impact ◽  
Internal Audit ◽  
Independent Study ◽  
Control Environment ◽  
Communications Systems ◽  
Control Procedures ◽  
And Control

This study aimed to measure the efficiency of employing the internal control components based on COSO framework to transparently carry out tasks and services, ensure integrity and enhance quality and efficiency, so as to contribute to promoting the adoption of internal control components based on the COSO framework, applying them and analyzing their efficiency in performing tasks transparently, ensuring integrity and enhancing quality and efficiency, particularly with the Amman`s Municipality efforts to create a directorate that operates the internal control while ensuring the integrity of the proceedings, carrying out tasks and services transparently and boosting citizen's confidence in the Greater Amman Municipality resolutions. One of the main findings of the study would be in the fact that the independent study variables represented in the internal audit based on the COSO framework has a highly positive impact in performing tasks transparently to ensure integrity, boost quality and efficiency at the Greater Amman Municipality. Results show that the communications systems component was the most highly applicable, followed by the follow-up and control procedures and activities, whereas the control environment came third, followed by risks and response procedures identification and assessment, and finally came the appropriate follow-up component in the fifth place.

scholarly journals Corporate governance characteristics of firms reporting internal control deficiencies

2011 ◽  
Vol 8 (2) ◽  
pp. 363-390
Author(s):  
Kathleen Rupley
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Audit Committee ◽  
Internal Audit ◽  
High Growth ◽  
Audit Committees ◽  
Market Reactions ◽  
Sarbanes Oxley ◽  
Internal Control Deficiencies ◽  
Nominating Committees

From a sample of firms reporting internal control deficiencies (ICD), I compare corporate governance structures to industry, exchange, and size – matched firms. I examine market reactions to reports of ICDs in 8-K filings. Additionally, I examine shifts in corporate governance characteristics since the Sarbanes-Oxley Act of 2002 (SOX). Results indicate that weaker boards, larger audit committees, less independent nominating committees, and high growth companies are associated with ICDs. Market reaction is negative to ICD disclosures when they are associated with controls over revenue. Firms have made changes post-SOX including reduced non-audit services, more frequent audit committee meetings, formation of nominating and governance committees, creation of internal audit functions, and implementation of corporate governance policies.

Assessing Internal Audit with Text Mining

2018 ◽  
Vol 17 (02) ◽  
pp. 1850020 ◽  
Author(s):  
Georgia Boskou ◽  
Efstathios Kirkos ◽  
Charalambos Spathis
Keyword(s):  
Text Mining ◽  
Financial Reporting ◽  
Internal Control ◽  
Audit Quality ◽  
Internal Audit ◽  
Internal Controls ◽  
Annual Reports ◽  
Previous Attempt ◽  
Sarbanes Oxley ◽  
Audit Information

Recently internal controls, corporate governance and risk management have received a great deal of attention. Regarding internal control, several research studies address the issue of internal audit quality. Noteworthy, according to Sarbanes–Oxley (SOX) the internal controls over financial reporting are assessed by the auditors and the management. In the present study, we assess internal controls over financial reporting by employing Text Mining techniques. We analyse the annual reports of 133 publicly traded Greek Companies. The textual parts of the annual reports that refer to internal audit mechanism are extracted. We adopt a Vector Space model and the term-document matrix records the occurrence frequencies of the terms. By applying feature selection, a set of significant keywords, which are used as predictors, is extracted. The Linear Regression model developed explains the variance of the data and highlights significant predictors. The model manages to successfully assess the internal audit function. By performing PCA, major underlying procedures and concepts related to internal audit quality are revealed. Inspite of the undoubted importance of the assessment of internal audit, no previous attempt has been made to assess internal audit and to extract internal audit information from corporate disclosures by using Text Mining techniques. Our results can be useful to internal and external auditors, managers, company decision-makers, regulators and researchers.

scholarly journals 2002 Sarbanes-Oxley Act: Privately-Held Companies Implementation Issues

2011 ◽  
Vol 22 (3) ◽  
Author(s):  
Ronald O. Reed ◽  
Thomas Buchman ◽  
Richard Wobbekind
Keyword(s):  
Internal Control ◽  
Control Structure ◽  
Cost Effective ◽  
Financial Statements ◽  
Font Size ◽  
Regulatory Governance ◽  
Sarbanes Oxley ◽  
The Cost ◽  
Code Of Professional Conduct ◽  
Privately Held

<p class="MsoNormal" style="text-align: justify; margin: 0in 31.2pt 0pt 0.5in;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">Our research was designed to for two purposes: (1) if the provisions of SOX have merit on their own or whether it is just a mandate by legislators, and (2) to determine if privately-held companies currently not required to implement SOX have done so.<span style="mso-spacerun: yes;">&nbsp; </span>In summary, the respondents, who were experienced financial executives with knowledge of SOX and other regulatory governance policies see SOX as an influential piece of legislation.<span style="mso-spacerun: yes;">&nbsp; </span>They see some positive benefits to their organizations with implementation of some of the provisions of the act, such as better financing options, better credit opportunities, and opportunities to take the company public.<span style="mso-spacerun: yes;">&nbsp; </span>Many of financial executives indicated their organizations are implementing provisions in areas where it cost effective as well making &ldquo;good&rdquo; business sense.<span style="mso-spacerun: yes;">&nbsp; </span>For example, it is cost effective to implement a formal code of professional conduct for the executives and it does make good business sense.<span style="mso-spacerun: yes;">&nbsp; </span>However they are not asking their CEOs or CFOs to certify the accuracy of financial statements nor to the internal control structure.<span style="mso-spacerun: yes;">&nbsp; </span>Many of the financial managers indicated they are not implementing SOX on a full scale basis because of the cost, time, and that the lack of benefits derived from implementation.</span></span></p>

Controls, Security, and Audit in Online Digital Accounting

2011 ◽  
pp. 318-383
Author(s):  
Ashutosh Deshmukh
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Annual Report ◽  
Control Structure ◽  
Internal Controls ◽  
Section 404 ◽  
Checks And Balances ◽  
The Public ◽  
Sarbanes Oxley ◽  
Public Company

Internal controls have existed since the dawn of business activities. Internal controls are basically systems of checks and balances. The purpose is to keep the organization moving along desired lines as per the wishes of the owners and to protect assets of the business. Internal controls have received attention from auditors, managers, accountants, fraud examiners and legislatures. Sarbanes Oxley Act 2002 now requires the annual report of a public company to contain a statement of management’s responsibility for establishing and maintaining an adequate internal control structure and procedures for financial reporting; and management’s assessment of the effectiveness of the company’s internal control structure and procedures for financial reporting. Section 404 of the Act also requires the auditor to attest to and report on management’s assessment of effectiveness of the internal controls in accordance with standards established by the Public Company Accounting Oversight Board (PCAOB).

scholarly journals Internal control effectiveness – a clustering approach

2016 ◽  
Vol 31 (1) ◽  
pp. 5-34 ◽  
Author(s):  
Aapo Länsiluoto ◽  
Annukka Jokipii ◽  
Tomas Eklund
Keyword(s):  
Internal Control ◽  
Control Structure ◽  
Three Dimensional ◽  
Self Organizing Map ◽  
Neural Network Approach ◽  
Content Type ◽  
Control Effectiveness ◽  
Sarbanes Oxley ◽  
Material Weaknesses ◽  
Clustering Approach

Purpose – This study aims to examine and visualize the adopted internal control structure and effectiveness in firms and present a typology of firms. Control structure and effectiveness are measured based on the assessment of management, rather than using reported material weaknesses as most studies do. This type of evaluation is more purposeful for firms that do not apply the Sarbanes-Oxley Act. Internal control frameworks provide only broad guidance concerning internal control concepts, leaving the details to the adopting firms. Design/methodology/approach – The survey data (from 741 CEOs) are clustered using the self-organizing map, a visual artificial neural network approach. A three-dimensional effectiveness proxy is used. Findings – The analysis reveals four alternative types of internal control effectiveness in firms and visually presents how the components of the internal control structure are associated with each one. A typology of internal control structure and effectiveness is then created. Practical implications – The findings suggest that there are interrelated, but not straightforward, relationships between internal control variables and that there is a link between some of them and higher internal control effectiveness in practice. These findings have important implications for those responsible for improving or assessing internal control, such as management, personnel and internal and external auditors. Originality/value – This paper uses a clustering approach to create a typology for alternative types of internal control structure and effectiveness, based on data from actual firms. Instead of using material weaknesses as a measure, this study uses managers’ own assessments of internal control effectiveness.

scholarly journals EFFECT OF INTERNAL AUDIT QUALITY ON THE EFFECTIVENESS OF GOOD CORPORATE GOVERNANCE (CASE STUDY AT PT JASA RAHARJA)

2020 ◽  
Vol 2 (2) ◽  
pp. 203-217
Author(s):  
Fajar Arya Adhitya Putra ◽  
Hadri Mulya
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Sampling Method ◽  
Audit Quality ◽  
Statistical Tests ◽  
Internal Audit ◽  
Control Unit ◽  
Good Corporate Governance

This study aims to examine the Effect of Internal Audit Quality on the Effectiveness of Good Corporate Governance which is seen from the Independence of Auditors, Professional Capabilities, Scope of Work and Examination at PT Jasa Raharja.The population in this study were all employees of PT Jasa Raharja which were divided into Employees of the Internal Control Unit, Head of Branches, Head of Division, Head of Internal Control Unit and Corporate Secretary of PT Jasa Raharja. Samples obtained by purposive sampling method were as many as 85 employees. The results of statistical tests show that the Quality of Internal Audit has a significant effect on the Effectiveness of Good Corporate Governance that is measured using variables such as Independence, Professional Capability, Scope of Work and Examination.

scholarly journals THE IMPACT OF AUDITING AND INTERNAL CONTROLS ON THE MANAGEMENT OF A BUSINESS ORGANIZATION. A CASE STUDY OF PRUDENTIAL BANK LIMITED (WEIJA BRANCH)

2019 ◽  
pp. 51-64
Author(s):  
Alex Acquah ◽  
Takyi Kwabena Nsiah ◽  
Ebenezer Yaw Ofosuhene ◽  
Elizabeth Naa Akushia Antie
Keyword(s):  
Internal Control ◽  
Research Work ◽  
Internal Audit ◽  
Secondary Data ◽  
Internal Controls ◽  
Control Practice ◽  
Set Up ◽  
And Control ◽  
The Impact

For system-based auditing to work effectively the auditor will like to rely on internal controls to reduce the volume of substantive testing. It is therefore important for the auditor to examine the internal control practice and procedures that are in place in the client’s business. Where weaknesses are revealed, the auditor recommends ways of improving the systems. This research examines the relationship between some components (risk assessment, control environment and control activate) of internal control systems and the effectiveness of audit program in prudential bank Weija branch. The study exploited information by the help of both primary and secondary data from questionnaires and interview schedules. However, the purposive method of sampling was used in this research work. In all 10 respondents were sampled from the fifty (50) respondents under review. The data captured in this study, was analyzed and interpreted through descriptive method by the help of frequency tables, graphical presentation and tables. Based on the investigations carried, the internal control system was seen to be significant in detection of fraud in banks in Ghana; there is therefore the need for an effective and acceptable internal control structure in banking organizations. It was therefore recommended that Prudential Bank Limited set up internal audit units at their various branches all over the country, so that there shall always be internal audit personnel to ensure adherence to the internal controls that exist in the organization. In view of this, the internal audit personnel should also be revolved at regular intermissions to prevent any form of professional misconducts.

Assessing Internal Control Over Cash Receipts at NADCo Communications: An Instructional Case

2006 ◽  
Vol 1 (1) ◽  
pp. 39-43 ◽  
Author(s):  
Robert Bromley
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Final Section ◽  
Internal Controls ◽  
Certified Public Accountants ◽  
American Institute ◽  
Accounting Profession ◽  
Web Based ◽  
Sarbanes Oxley ◽  
Supporting Materials

The audit of internal control over financial reporting required by the Sarbanes Oxley Act has radically changed the accounting profession. The evaluation and disclosure of the assessment of the internal control's effectiveness is now required by management and their auditors. This paper describes the use of an internal control assessment case, as well as web-based supporting materials that can enhance students' ability to analyse internal controls and improve their writing skills. The need for these skills has been well established by the American Institute of Certified Public Accountants (AICPA), the American Accounting Association (AAA) Albrecht and Sack (2000) and others in the accounting profession. These resources are presented below along with a section describing the learning objectives they were designed to achieve. The assessment of these materials is presented in a final section. The results were positive and provide accounting educators with resources that can improve students' ability to evaluate internal controls and communicate their findings.

The Impact of Internal Audit Function Quality and Contribution on Audit Delay

2014 ◽  
Vol 34 (1) ◽  
pp. 25-58 ◽  
Author(s):  
Mina Pizzini ◽  
Shu Lin ◽  
Douglas E. Ziegenfuss
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
House Of Representatives ◽  
Internal Audit ◽  
Financial Statement ◽  
Internal Auditors ◽  
External Auditors ◽  
Sarbanes Oxley ◽  
The Impact ◽  
Relevant Work

SUMMARY The number of days required to complete financial statement audits (i.e., audit delay) increased significantly with the implementation of Section 404 of the Sarbanes-Oxley Act (SOX, U.S. House of Representatives 2002). As firms' in-house experts on internal control, Internal Audit Functions (IAFs) can substantially affect financial reporting processes and, thus, audit delay. Internal auditors can help management maintain strong internal controls and assist external auditors with financial statement audits. Accordingly, we investigate whether IAF quality and the IAF's contribution to financial statement audits affect audit delay in a sample of 292 firm-year observations drawn from the pre-SOX 404 period. Using survey data from the Institute of Internal Auditors (IIA), we develop a comprehensive proxy for IAF quality; we measure different aspects of IAF quality (e.g., competence, objectivity, fieldwork rigor); and we measure the nature of the IAF's contribution to financial statement audits (independently performed work and direct assistance). Results indicate audit delay is decreasing in IAF quality, and this decrease is driven by IAF competence and fieldwork quality. Delay is four days shorter when IAFs contribute to external audits by independently performing relevant work. High-quality IAFs contribute to financial statement audits by independently performing relevant work, while low-quality IAFs provide direct assistance.

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