An Analysis of the Demand for Reporting on Internal Control

2000 ◽  
Vol 14 (3) ◽  
pp. 325-341 ◽  
Author(s):  
Heather M. Hermanson
Keyword(s):  
Decision Making ◽  
Financial Reporting ◽  
Internal Control ◽  
Operational Definition ◽  
Financial Statement ◽  
Individual Investors ◽  
Internal Auditors ◽  
Additional Information ◽  
User Groups ◽  
Definition Of

The purpose of this study is to analyze the demand for reporting on internal control. Nine financial statement user groups were identified and surveyed to determine whether they agree that: (1) management reports on internal control (MRIC) are useful, (2) MRICs influence decisions, and (3) financial reporting is improved by adding MRICs. In addition, the paper examined whether responses varied based on: (1) the definition of internal control used (manipulated as broad, operational definition vs. narrow, financial-reporting definition) and (2) user group. The results indicate that financial statement users agree that internal controls are important. Respondents agreed that voluntary MRICs improved controls and provided additional information for decision making. Respondents also agreed that mandatory MRICs improved controls, but did not agree about their value for decision making. Using a broad definition of controls, respondents strongly agreed that MRICs improved controls and provided a better indicator of a company's long-term viability. Executive respondents were less likely to agree about the value of MRICs than individual investors and internal auditors.

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.

scholarly journals A Methodology for Redesigning Networks by Using Markov Random Fields

Mathematics ◽  
2021 ◽  
Vol 9 (12) ◽  
pp. 1389
Author(s):  
Julia García Cabello ◽  
Pedro A. Castillo ◽  
Maria-del-Carmen Aguilar-Luzon ◽  
Francisco Chiclana ◽  
Enrique Herrera-Viedma
Keyword(s):  
Decision Making ◽  
Random Fields ◽  
Markov Random Fields ◽  
Application Performance ◽  
Cross Border ◽  
Markov Random ◽  
User Groups ◽  
Universal Definition ◽  
Definition Of ◽  
Decision Making Model

Standard methodologies for redesigning physical networks rely on Geographic Information Systems (GIS), which strongly depend on local demographic specifications. The absence of a universal definition of demography makes its use for cross-border purposes much more difficult. This paper presents a Decision Making Model (DMM) for redesigning networks that works without geographical constraints. There are multiple advantages of this approach: on one hand, it can be used in any country of the world; on the other hand, the absence of geographical constraints widens the application scope of our approach, meaning that it can be successfully implemented either in physical (ATM networks) or non-physical networks such as in group decision making, social networks, e-commerce, e-governance and all fields in which user groups make decisions collectively. Case studies involving both types of situations are conducted in order to illustrate the methodology. The model has been designed under a data reduction strategy in order to improve application performance.

Effect Technology Information On Quality Financial Statement With Internal Control As Moderating Variable

2021 ◽  
Vol 2 (1) ◽  
pp. 9-13
Author(s):  
Aris Eddy Sarwono ◽  
Asih Handayani
Keyword(s):  
Information Technology ◽  
Control System ◽  
Financial Reporting ◽  
Internal Control ◽  
Local Governments ◽  
Sampling Technique ◽  
Financial Statement ◽  
Financial Reports ◽  
Internal Control System

The problem with the low quality of financial reports in local governments is the reason this research was conducted. This research was conducted with the aim of analyzing the use of information technology on the quality of financial reports by considering the internal control system (SPI) factor. The location of this research is in the Karisidenan Surakarta area which includes 6 districts and 1 city. The population of this research is all state civil servants (ASN) in local governments who work in accounting. The sampling technique was using purposive sampling method. The results showed that the use of information technology had a positive effect on the quality of financial reporting in local governments, while the internal control system moderated the effect of the use of information technology on the quality of financial reporting in local governments.

scholarly journals Integration of Internal Control and Financial Statement Audits: Are Two Audits Better than One?

2018 ◽  
Vol 94 (2) ◽  
pp. 53-81 ◽  
Author(s):  
Lori Shefchik Bhaskar ◽  
Joseph H. Schroeder ◽  
Marcy L. Shepardson
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Audit Quality ◽  
Internal Controls ◽  
Data Availability ◽  
Financial Statement ◽  
Auditor Judgment ◽  
Public Company ◽  
Better Than

ABSTRACT The quality of financial statement (FS) audits integrated with audits of internal controls over financial reporting (ICFR) depends upon the quality of ICFR information used in, and its integration into, FS audits. Recent research and PCAOB inspections find auditors underreport existing ICFR weaknesses and perform insufficient testing to address identified risks, suggesting integrated audits—in which substantial ICFR testing is required—may result in lower FS audit quality than FS-only audits. We compare a 2007–2013 sample of small U.S. public company firm-years receiving integrated audits (accelerated filers) to firm-years receiving FS-only audits (non-accelerated filers) and find integrated audits are associated with higher likelihood of material misstatements and discretionary accruals, consistent with lower FS audit quality. We also find evidence of (1) auditor judgment-based integration issues, and (2) low-quality ICFR audits harming FS audit quality. Overall, results suggest an important potential consequence of integrated audits is lower FS audit quality. Data Availability: Data are publicly available from the sources identified in the text.

The Foundations of Tactics and Strategy in Team Sports

1999 ◽  
Vol 18 (2) ◽  
pp. 159-174 ◽  
Author(s):  
Jean-Francis Gréhaigne ◽  
Paul Godbout ◽  
Daniel Bouthier
Keyword(s):  
Decision Making ◽  
Critical Thinking ◽  
Team Sports ◽  
Operational Definition ◽  
Internal Logic ◽  
Teachers And Students ◽  
Definition Of ◽  
Teaching Learning

The debate regarding the teaching of sport and games appears to be more complex than a matter of technical versus tactical approaches. The authors identify facets of the debate. One of these facets concerns the undifferentiated use of the terms tactics and strategy. The authors argue that these two concepts need to be clarified if decision-making and critical-thinking are to be encouraged on the part of the students. A framework is put forward for the analysis of the functioning of team sports. The framework includes: (a) an overview of the internal logic of team sports based on two essential features, the rapport of strength and the competency network; (b) an operational definition of strategy and tactics as they relate to the internal logic of team sports; and (c) nine principles underlying tactics and strategy and presented as potential guides for teachers and students in the teaching-learning of team sports and games.

scholarly journals The importance of considering internal audit as a decision-making by top-management of an agricultural company

2020 ◽  
Vol 6 (3) ◽  
pp. 123-136
Author(s):  
Miloš Jokić
Keyword(s):  
Decision Making ◽  
Internal Control ◽  
Internal Audit ◽  
International Standards ◽  
Top Management ◽  
Internal Auditing ◽  
Internal Auditors ◽  
Agricultural Enterprises ◽  
Agricultural Enterprise ◽  
Valid Information

The top management's decision-making in an agricultural enterprise should be based on valid information gathered within the enterprise itself. Collecting timely business information is done daily by all sectors of the enterprise. Merely improving the security of information gathering and the safety of all parts of the enterprise is a task performed by trained internal control and internal audit personnel in the company, appointed by top management. In performing their duties on a regular basis, internal auditors should apply procedures and methodologies that are consistent with International Standards on the Professional Practice of Internal Auditing in their work. The aim of the paper is to emphasize the importance of implementing the adopted methodology of work of internal auditors in agricultural companies. The author points out those standards that are in line with best audit practice should be applied in internal audit work. The contribution of the study authors is to emphasize the importance of applying the internal audit profession in the regular operation of agricultural enterprises, which is in line with the general objective of improving the regular business operation.

scholarly journals Audit Internal dan Efektivitas Pengendalian Intern Penjualan

2018 ◽  
Vol 3 (3) ◽  
pp. 1-11
Author(s):  
Radhi Abdul Halim Rachmat ◽  
Ivan Gumilar Sambas Putra ◽  
Ii Halilah
Keyword(s):  
Decision Making ◽  
Statistical Analysis ◽  
Internal Control ◽  
Descriptive Analysis ◽  
Internal Audit ◽  
Management Decision ◽  
Internal Auditors ◽  
Management Decision Making ◽  
Operational Activities

Sales activity plays an important role and needs to be controlled because it affects to the revenue. Sales control requires sales analysis that reveal undesirable developments need to be corrected. Internal Auditors who are not directly involved in operational activities can, therefore, assess all activities. Internal Auditors also provides objective information regarding sales data that will be the basis for management decision making. The purpose of this study is to: determine whether the internal audit on sales activities conducted by the company has been done adequately; determine whether the internal control over sales has been implemented effectively; and determine the role of internal audit in supporting the effectiveness of internal control sales. The authors perform hypothesis testing by doing descriptive analysis and statistical analysis. Based on the results, the effectiveness of internal control can be explained by the Internal Audit role of 63.2%.

scholarly journals Internal Auditor Involvement In Internal Control System Design? Is Objectivity Impaired?

2011 ◽  
Vol 8 (4) ◽  
pp. 15 ◽  
Author(s):  
Bryan K. Church ◽  
Arnold Schneider
Keyword(s):  
Decision Making ◽  
Control System ◽  
System Design ◽  
Internal Control ◽  
Control System Design ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Behavioral Decision Making ◽  
Behavioral Decision ◽  
Internal Control System

Research in behavioral decision making suggests that internal auditors who are involved in the design of a particular internal control system may be reluctant to find fault with the system, and in turn, their objectivity may be impaired. The purpose of our study was to test this assertion. We found, contrary to the assertion, that internal auditors who participated in the design of a particular system were able to maintain their objectivity.

scholarly journals Twenty years of XBRL: what we know and where we are going

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Francesca Bartolacci ◽  
Andrea Caputo ◽  
Andrea Fradeani ◽  
Michela Soverchia
Keyword(s):  
Decision Making ◽  
Corporate Governance ◽  
Financial Reporting ◽  
Financial Statement ◽  
Financial Disclosure ◽  
Content Type ◽  
Business Reporting ◽  
Decision Making Processes ◽  
Governance Choices ◽  
The Impact

Purpose This paper aims to extend the knowledge of eXtensible Business Reporting Language (XBRL) to synthesize what 20 years of accounting and business literature on XBRL suggests about the effective improvement from its implementation in financial reporting. Design/methodology/approach A systematic literature review and bibliometric analysis of 142 articles resulted in the identification of 5 primary research streams: adoption issues; financial reporting; decision-making processes, market efficiency and corporate governance; audit and assurance issues; and non-financial reporting. Findings The results reveal a scarcity of studies devoted to explicating the consequences of XBRL implementation on financial reporting outside the SEC’s XBRL mandate and listed companies’ contexts. Also, some papers’ results question the usefulness of the language on the decision-making process. The overall lack of literature concerning the impact of XBRL on financial statement preparers, especially with reference to SMEs, is evident. Moreover, the consequences on corporate governance choices and the relevant internal decision-making processes are rarely debated. Research limitations/implications The findings are useful for users of companies’ financial disclosure policies, particularly for regulators who manage XBRL implementation in countries where XBRL has not yet been adopted as well as for others working in specific areas of financial disclosure, such as non-financial reporting and public sector financial reporting. Originality/value This study differs from previous literature on XBRL as it focuses on a wider period of analysis and offers a unique methodology – combination of bibliometric and systematic review – as well as a business perspective for deepening XBRL.

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