scholarly journals Relationship between internal audit factors and corporate governance

2018 ◽  
Vol 7 (3) ◽  
pp. 13-17
Author(s):  
George Drogalas ◽  
Evgenia Anagnostopoulou ◽  
Andreas Koutoupis ◽  
Michail Pazarskis
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Audit Committee ◽  
Audit Quality ◽  
Stock Exchange ◽  
Internal Audit ◽  
Management Support ◽  
Internal Auditor ◽  
Empirical Survey ◽  
Financial Scandals

In the aftermath of major corporate financial scandals, corporate governance and internal control frameworks have been extensively developed and adopted by corporations worldwide. This study investigates the importance of internal audit in corporate governance and, simultaneously, the degree of importance of the internal auditor regarding corporate governance. An empirical survey was conducted by distributing a questionnaire in Greek firms listed on the Athens Stock Exchange. Regression analysis is used in order to illustrate the gathered information. The findings indicate that internal audit has a great impact on the effectiveness of corporate governance. More particularly, internal audit quality and internal audit senior management support are statistically significantly associated with enhanced corporate governance effectiveness, in contrast to the audit committee independence which is not statistically significant.

scholarly journals The Effect of Corporate Governance in Palestine on the Efficiency of Internal Audit: Empirical Evidence

2016 ◽  
Vol 8 (5) ◽  
pp. 124 ◽  
Author(s):  
Suhaib Tawfiq Jarrar
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Audit Committee ◽  
Audit Quality ◽  
Internal Audit ◽  
Public Companies ◽  
Internal Auditor ◽  
The Right ◽  
The Impact

This paper comes to examine the impact of corporate governance in Palestine on the efficiency of internal audit from the reality of the listed corporations in the Palestine Exchange; [PEX]. The population of this paper consists of all the 25 listed Palestinian companies in the Palestine Exchange that have internal auditor. It also includes another 5 companies that rely on the internal audit by external companies. Hence, the number of the reviewed companies by this study is 30 companies (Palestine Exchange Market). Thereupon, 30 questionaires were distributed and retrived. However, this manuscript states a summary of the most important results. These results are explained as is shown in the following: (1) the findings of the study state that there is an effect of applying the variables of corporate governance altogether on the quality of the internal audit of the listed public companies in the Palestine Exchange. These rules are (disclosure and transparency, accountability, responsibility, justice, and independency). (2) The results of the study indicate that there is a significant effect of applying the corporate governance variables individually on the quality of the internal audit of the listed public companies in the Palestine Exchange. Thus, the effect of these variables appears contrasted respectively as the following: disclosure and transparency, justice and accountability, independency and responsibility. (3) The corporate governance represents combining the right practices and procedures which operate within the standards and rules that governed by the obligatory standards. These standards aim at ensuring that there aren’t any contradictions between the strategic goals of the company and the fuctional procedures of the administration in achieving these goals. (4) The internal audit adds value to the company through the functions that enhance its performance within corporate governance. This includes providing information to all levels of the management, evaluating the system of the internal control and the risk management, in addition to sticking the company with the principles of corporate governance. The findings of the study come up with the following recommendations: (1) the study assures the importance of applying the corporate governance principles because of their clear effect on the internal audit quality. It also recommends working efficiently on the professional development of the auditors and improving their performance through training programs, as well, encouraging them to keep up with the latest developments in the field of the auditing and other related fields. (2) It strongly recommends working on enhancing and activating the role of the board of directors and the audit committee; as well as granting them the independency. Hence, they will be able to carry out the tasks assigned to them. Consequently, they will avoid the effects that the company may be exposed to as a result of the internal weakness of the practical aspects of the principles of corporate governance; in addition to the negative impacts of this issue on the quality of the internal audit.

scholarly journals Value Engineering for the Role of Internal Audit Quality in Activating the Principles of Corporate Governance: A Case of Non-financial Firms on Iraqi Stock Exchange

2018 ◽  
Vol 7 (4.7) ◽  
pp. 145
Author(s):  
Mohammed Hassan Sabbar ◽  
Safa Eltyaf Abdalamer
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Audit Quality ◽  
Stock Exchange ◽  
Internal Audit ◽  
Value Engineering ◽  
Positive Relation ◽  
Qualified Person ◽  
Governance Practices ◽  
The Impact

The main purpose of this study is to investigate the impact of the quality of internal audit on the effectiveness of corporate governance in Iraqi listed firms. The frequency of audit committee meeting and board size are in a negative and significant relationship of the audit committee and firm size are only variables which in negative relation with corporate governance index. Whereas all the other variables which independence of audit committee are, qualification if independent director in audit committee and audit committee to board independence are in positive relation to corporate governance. The results indicate that along with independence its mandatory to have qualified person on a board committee. Similarly, the frequency of audit committee also appears in positive relation to corporate governance practices for the sample of Iraqi firm. The results of the study provide support with agency theory. This study will be helpful for policymakers and corporate heads in formulating policies related to development and implementation of corporate governance.  

scholarly journals The relationship between corporate governance, internal audit and audit committee: Empirical evidence from Greece

2016 ◽  
Vol 14 (1) ◽  
pp. 569-577 ◽  
Author(s):  
George Drogalas ◽  
Konstantinos Arampatzis ◽  
Evgenia Anagnostopoulou
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Audit Quality ◽  
Stock Exchange ◽  
Internal Audit ◽  
Audit Process ◽  
Athens Stock Exchange ◽  
The Relationship

Internal audit has been acknowledged as the main driver of corporate disclosure which aims to increase the quality of financial information, to ensure the transparency in financial reporting and to increase the confidence between managers and shareholders. The need for developing strong governance structures has led many researchers to examine the new framework of corporate governance and to explore its relationship to the internal audit process. Regarding Greece, there is a lack of research evaluating the relationship between corporate governance and internal audit. This study examines the above relationship in companies listed in the Athens Stock Exchange. In the present research, internal audit is examined in terms of audit quality and the consulting role of internal audit, in order to highlight the new management-oriented and value adding scope of internal audit. Data was collected via a survey questionnaire methodology and was analyzed using regression analysis. The results show that corporate governance is positively associated to the consulting role of internal audit, to internal audit quality and to the audit committee.

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.

scholarly journals Pengaruh Ukuran Perusahaan Dan Corporate Governance Terhadap Manajemen Laba Di Industri Perbankan Indonesia

2021 ◽  
Vol 9 (1) ◽  
pp. 111-120
Author(s):  
Karina Karina ◽  
Sutarti Sutarti
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Banking Sector ◽  
Audit Quality ◽  
Stock Exchange ◽  
Governance Mechanisms ◽  
Audit Firm ◽  
Corporate Governance Mechanisms ◽  
Size Firm

The purpose of this research is to provide empirical evidence of the affect of ownership concetration, firms size, and corporate governance mechanisms on earnings management. Ownership concetration was measure by the biggest stock of individual or organization, firms size was measure by natural logaritma of net assets, and corporate governance mechanisms were measure by three variabels (composition of board of commisioner, audit quality were measure by industry specialize audit firm, and composition of audit committee). Earnings management was measure by discretionary accruals use Modified Jones Method. The population of this research is 41 companies in the banking sector which were listed in Indonesian Stock Exchange (IDX). The research data were collected from banking companies financial statement for the period of 2016 to 2018. Based on purposive sampling method. The reseacrh hypotesis were tested using multiple regression analysis. The results of this research show that firm size, firm of commissioner and proportion of commissioner have significant relationships with earnings management. Next, variables composition of board of commissioner, ownership concetration and specialize audit firm have no significant relationship with earnings management. Keywords: ownership concetration, firms size, corporate governance, earnings management

MEKANISME GOOD CORPORATE GOVERNANCE, UKURAN PERUSAHAAN, STRUKTUR KEPEMILIKAN MANAJERIAL DAN LEVERAGE PADA MANAJEMEN LABA PADA EMITEN PERBANKAN DI BURSA EFEK INDONESIA

2015 ◽  
Vol 10 (1) ◽  
pp. 1
Author(s):  
Rowland Pasaribu ◽  
Dionysia Kowanda ◽  
Muhammad Firdaus
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Firm Size ◽  
Audit Committee ◽  
Audit Quality ◽  
Stock Exchange ◽  
Sampling Technique ◽  
Earning Management ◽  
Managerial Ownership ◽  
Good Corporate Governance

ABSTRACT This reseach amied at knowing the influence of audit quality, propotion of independent commissioner, audit committe, firm size, managerial ownership and leverage. It used purposive sampling technique or choosing samples based on certain criteria. The sample of this research was 25 companies of banking industry in indonesia stock exchange period 2008-2012. Descriptive analysis, classical test, as well as multiple linear regression by examining the hypothesis using SPSS 20.0 were used to analyzed the data. The result shows that (1) all independent variables simultaneously hasinfluence on earnings management; (2) however partially audit committee, audit quality, managerial ownership and leverage do not affect significantly to earnings management; (3) only firm size and independent commissioner that affect significantly to earning management. Keywords: Earning Management, Good Corporate Governance, Firm Size, BankingABSTRAK Penelitian ini bertujuan untuk menganalisis dan menguji secara empiris signifikansi parsial dan simultan dari kualitas audit, komisaris independensi audit, komite audit, ukuran perusahaan, struktur kepemilikan, dan leverage terhadap manajemen laba pada emiten perbankan di bursa efek Indonesia periode 2008-2012. Teknik analisis yang digunakan adalah multiregresi. Hasil studi menunjukkan bahwa secara simultan seluruh variabel independen berpengaruh signifikan sedangkan secara parsial hanya ukuran perusahaan dan komisi independensi audit yang berpengaruh signifikan terhadap manajemen laba. Kata Kunci: Manajemen Laba, Mekanisme Tata Kelola, Ukuran Perusahaan, Perbankan,

scholarly journals Factors affecting the voluntary use of internal audit: evidence from the UK

2018 ◽  
Vol 33 (3) ◽  
pp. 288-317 ◽  
Author(s):  
Hazem Ramadan Ismael ◽  
Clare Roberts
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Internal Control ◽  
Audit Committee ◽  
Internal Audit ◽  
Theoretical Framework ◽  
Policy Implications ◽  
Content Type ◽  
Factors Affecting ◽  
The Uk

Purpose This study aims to identify the factors that lead non-financial companies listed in the UK to use an internal audit function (IAF) as a monitoring mechanism. Although the use of an IAF in the UK is voluntary, no prior research has examined the drivers for using one. Design/methodology/approach Financial and non-financial data were collected from the annual reports of 332 UK non-financial companies listed on the London Stock Exchange (LSE) Main Market. Univariate tests and multivariate logistic regression tests were used to test the research hypotheses. A theoretical framework based on both agency theory and transaction cost economics (TCE) theory was used to explain the economic factors affecting the use of an IAF. Findings The study provides evidence that firm size, level of internal risks, agency problem between owners and managers and existence of an effective audit committee are associated with the existence of an IAF. Thus, the need to have strong internal control and risk management systems and to reduce both internal and external agency costs drives companies to have an IAF. These results suggest the importance of IAF as an internal corporate governance tool and the effectiveness of UK governance regulations in monitoring the effectiveness of internal control systems. Practical implications Given the importance of the IAF’s corporate governance role, the study provides some policy implications. Regulators should pay more attention to the issue of maintaining an IAF, especially by large companies, the relationship between the IAF and other governance parties, especially the audit committee, and the disclosure of more relevant information about the IAF’s characteristics and practices. Originality/value This is the first study to examine the factors affecting the existence of the IAF within the UK’s distinctive regulatory approach of “comply or disclose reasons”. Furthermore, it provides a theoretical framework that explains how both the agency theory and TCE theory can interpret the adoption of internal audit.

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.

scholarly journals The Effect of Corporate Governance on Tax Avoidance: Evidence from Indonesia

2020 ◽  
Vol 2 (4) ◽  
pp. 66-85
Author(s):  
Feren Frisca Tania ◽  
. Mukhlasin
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Audit Committee ◽  
Stock Exchange ◽  
Tax Avoidance ◽  
Secondary Data ◽  
Audit Committees ◽  
Annual Reports ◽  
Manufacturing Companies ◽  
Negative Effect

This study aims to analyze the effect of the effectiveness of internal control, independent commissioners, the expertise of the board of commissioners, the number of audit committees, and the expertise of the audit committee on tax avoidance in manufacturing companies listed in Indonesia Stock Exchange period 2016-2018. This research is expected to be a material consideration for companies in making decisions related to taxation. The deductive approach used in this study by developing hypotheses based on relevant theories and findings of previous studies. Agency theory is used to see the effect of corporate governance on tax avoidance. The data collection method uses secondary data from the company's financial statements and annual reports according to specific criteria. Data analysis was performed by descriptive statistics and multiple linear regression. The results of the regression analysis prove that effectiveness of internal control and number of audit committees had a positive effect which means higher effectiveness of internal control and number of audit committees cause more tax avoidance, conversely independent commissioners and expertise of the board of commissioners had a negative effect which shows greater independent commissioners and expertise of the board of commissioners cause less tax avoidance. Another result claim that the expertise of the audit committee did not affect on tax avoidance. In contrast to previous studies, this study is more varied by combining several independent variables. JEL Codes: G34, H26.

scholarly journals The concept and the appearance of internal audit committees

2018 ◽  
Vol 27 (2018) ◽  
pp. 111-114
Author(s):  
Cristian Dragan
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Boards Of Directors ◽  
Audit Committee ◽  
Internal Audit ◽  
Audit Committees ◽  
External Audit ◽  
General Management ◽  
Proper Functioning

The Audit Committee is a concept of Corporate Governance, whose main concerns are focused on organizing and ensuring the proper functioning of internal control, internal audit, and its relationship with external audit. Audit committees have emerged from the need to send recommendations to the general management or board, to understand them and provide needed assistance for their implementation. For these reasons, the boards of directors thoroughly oversee the qualifications of committee members, their autonomy towards managers, the information they receive from auditors, and what they report.

Sign in / Sign up

Export Citation Format

Share Document