Auditing Related Party Transactions: A Literature Overview and Research Synthesis

2007 ◽  
Vol 21 (1) ◽  
pp. 81-102 ◽  
Author(s):  
Elizabeth A. Gordon ◽  
Elaine Henry ◽  
Timothy J. Louwers ◽  
Brad J. Reed
Keyword(s):  
Risk Assessment ◽  
Corporate Governance ◽  
Research Evidence ◽  
Relevant Literature ◽  
Academic Research ◽  
Fraud Detection ◽  
Research Synthesis ◽  
Policy Makers ◽  
Related Party Transactions ◽  
Literature Overview

We examine research relevant to auditing related party transactions to contribute to the PCAOB project on this topic and to provide other policy makers, auditors, and academics with an overview of relevant literature. Specifically, we report on the challenges associated with the identification, examination, and disclosure of related party transactions. Additionally, we address issues and research evidence related to nondisclosure and reliance on management assertions, risk assessment, materiality, fraud detection, the effect of related party transactions on corporate governance, and international auditing issues. Overall, we believe that the findings in academic research and the significance of related party transactions in recent prominent fraud cases are consistent with the PCAOB's reconsideration of auditing of related party transactions. We conclude with implications for further research.

scholarly journals Audit Research Summaries

2016 ◽  
Vol 90 (5) ◽  
pp. 214-218
Author(s):  
Editorial Office
Keyword(s):  
Corporate Governance ◽  
Research Synthesis ◽  
Related Party Transactions ◽  
Literature Overview ◽  
Onderzoek Naar

Ook deze maand presenteren wij weer enkele “Audit Research Summaries” uit de database van de American Accounting Association (www.auditingresearchsummaries. org). De eerste samenvatting betreft de studie met de titel “Auditing Related Party Transactions: A Literature Overview and Research Synthesis”. Deze studie verschaft een overzicht van onderzoek naar de controle van Related Party Transactions (RPTs). Een interessante bevinding luidt dat in geval van fraude die een accountant niet heeft weten te ontdekken, vaak de nodige RPTs hebben plaatsgevonden. Ook wordt geconstateerd dat in de gevallen dat RPTs gepaard gaan met een gebrekkige corporate governance, het risico op fraude relatief groot is.

The Auditor's Reporting Model: A Literature Overview and Research Synthesis

2008 ◽  
Vol 22 (1) ◽  
pp. 69-90 ◽  
Author(s):  
Bryan K. Church ◽  
Shawn M. Davis ◽  
Susan A. McCracken
Keyword(s):  
Future Study ◽  
Historical Development ◽  
Academic Research ◽  
Research Synthesis ◽  
Advisory Group ◽  
Relevant Research ◽  
The Public ◽  
Literature Overview ◽  
Public Company ◽  
Key Questions

This article examines academic research to contribute to the Public Company Accounting Oversight Board's (PCAOB) project on the auditor's reporting model. We develop a framework to organize our discussion of the literature in light of key questions raised at two Standing Advisory Group (SAG) meetings. We trace the historical development of the auditor's report and then delve into relevant research that focuses on the auditor's reporting decision and the content of the auditor's report. Throughout the article, we offer recommendations for future study. Last, we provide a brief recap and summarize the key findings.

Independent Directors' Tenure, Expropriation, Related Party Transactions, and Firm Value

2022 ◽  
pp. 369-394
Author(s):  
Chee Yoong Liew ◽  
S. Susela Devi
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Moderating Effect ◽  
Ownership Concentration ◽  
Independent Directors ◽  
Policy Makers ◽  
Related Party Transactions ◽  
Financial Valuation ◽  
Agency Conflict ◽  
The Relationship

This chapter analyses the relationship between related party transactions (RPT) and firm value and whether independent directors' tenure (IDT) strengthens or weakens this relationship. Further, it examines ownership concentration's role on this moderating effect of IDT in Malaysian family and non-family corporations. It is found that that IDT weakens the relationship between RPT and firm value. However, ownership concentration strengthens this moderating effect of IDT. Interestingly, family corporations are more likely to show a stronger impact of ownership concentration which we allude to concerns of maintaining reputation. The research results remain after controlling for technology corporations. The findings' have important implications for policy makers, practitioners and regulators, especially in emerging economies globally.Keywords: Agency Conflict, Corporate Financial Valuation, Independent Directors' Term in the Office, Corporate Governance, Family Corporations, Emerging Markets

Corporate governance and detrimental related party transactions

2019 ◽  
Vol 27 (2) ◽  
pp. 196-227
Author(s):  
Masood Fooladi ◽  
Maryam Farhadi
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Social Implications ◽  
Policy Makers ◽  
Content Type ◽  
Conflict Of Interests ◽  
Related Party Transactions ◽  
Distinct Effect ◽  
Opportunistic Behaviour ◽  
Practical Implications

PurposePrior studies suggest that most expropriation of firm’s resources is conducted through related party transactions (RPTs). Based on the conflict of interest view, related parties opportunistically use their authorities to expropriate firms’ resources for their own benefits via RPTs subsequently increasing agency costs and reduce firm value. One important monitoring system suggested by agency theory to reduce the agency problem is corporate governance (CG). CG monitors firm’s performance to align the interests of those who control and those who own the residual claims in a firm. The purpose of this paper is to investigate the moderating effect of CG characteristics on the relationship between RPTs and firm value.Design/methodology/approachIn order to clarify the distinct effect of RPTs, this study categorises RPTs into two groups including beneficial and detrimental RPTs (DRPTs). Applying “proportionate stratified random sampling”, this study covers a panel of 271 firms listed on Bursa Malaysia over the period of 2009–2011, using a moderated multiple regression model.FindingsThis study documents that firm value is positively associated with beneficial RPTs (BRPTs) and negatively related to detrimental RPTs (DRPTs). In addition, results show that divergence can intensify the negative relationship between DRPTs and firm value. Findings support the necessity for more scrutiny by regulators, policy makers and standard setters to monitor the conflict of interests in RPTs and restrain the power of related parties to protect the firm’s wealth by introducing stricter regulations for RPTs and improve CG practices especially to monitor RPTs in order to limit the opportunistic behaviour of related parties.Research limitations/implicationsResearch implications have been presented in Section 10. It has also been summarised in practical implications and social implications sections.Practical implicationsThe findings of this study indicate that investors, creditors and policy makers should not consider all RPTs as harmful transactions and it seems necessary to categorise RPTs into different groups including transactions which are detrimental and transactions which are beneficial to the firm.Social implicationsThe findings of this study support the necessity for more scrutiny by regulators, policy makers and standard setters to monitor the conflict of interests in RPTs. They should restrain the power of related parties to protect the firm’s wealth by introducing stricter regulations for RPTs and improving CG practices especially to monitor RPTs in order to limit the opportunistic behaviour of related parties.Originality/valueThis study contributes to the RPTs literature by showing that the effect of RPTs on firm value depends on the types of RPTs, and market participants allocate different values to different types of RPTs. Therefore, to fill the gap and clarify the distinct effect of RPTs, this study categorizes RPTs into two groups including beneficial and detrimental RPTs.

Related-party transactions: a review of the regulation, governance and auditing literature

2018 ◽  
Vol 33 (8/9) ◽  
pp. 779-806 ◽  
Author(s):  
Moataz El-Helaly
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Negative Effects ◽  
Audit Risk ◽  
Policy Makers ◽  
Content Type ◽  
Related Party Transactions ◽  
Corporate Scandals ◽  
Increased Risk ◽  
Starting Point

PurposeSeveral studies, especially in Asian economies, have investigated the antecedents, implications and consequences of related-party transactions (RPTs). This paper aims to review this literature to collate, gauge and critically discuss understandings of the relationship between RPTs and risk, with a particular focus on audit risk.Design/methodology/approachThe paper discusses RPTs and how they have been associated with corporate scandals and the expropriation of shareholders’ wealth. RPTs are defined as per accounting standards and the main types of RPTs are described based on the extant literature. Two key research design issues are discussed: measures used to operationalize RPTs and observable variations in sample size across RPT studies. Evidence is presented on the negative effects of RPTs and the role of regulation, corporate governance and auditing in reducing risks.FindingsPrior studies have associated RPTs with the expropriation of shareholders’ wealth, declining firm valuations, lower-quality financial reporting, increased risk of material misstatements and decreases in long-term firm performance. Further, the evidence suggests that regulation, corporate governance and auditing can mitigate the negative effects of RPTs.Practical implicationsThis paper provides insights for regulators on the effects of enforcement, corporate governance and external audits on reducing the negative effects of RPTs, and highlights the increased risk of material misstatements in financial statements when RPTs are conducted. Moreover, it reveals how RPTs affect risk assessments for auditors.Originality/valueThis paper represents the first comprehensive review of the empirical RPT literature. It provides a starting point for future investigations of RPTs, not least because it reveals important limitations with the extant body of research in this domain. It also offers salient insights and implications for practitioners and policy makers.

Independent Directors' Tenure, Expropriation, Related Party Transactions, and Firm Value

2020 ◽  
pp. 182-207
Author(s):  
Chee Yoong Liew ◽  
S. Susela Devi
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Moderating Effect ◽  
Ownership Concentration ◽  
Independent Directors ◽  
Policy Makers ◽  
Related Party Transactions ◽  
Financial Valuation ◽  
Agency Conflict ◽  
The Relationship

This chapter analyses the relationship between related party transactions (RPT) and firm value and whether independent directors' tenure (IDT) strengthens or weakens this relationship. Further, it examines ownership concentration's role on this moderating effect of IDT in Malaysian family and non-family corporations. It is found that that IDT weakens the relationship between RPT and firm value. However, ownership concentration strengthens this moderating effect of IDT. Interestingly, family corporations are more likely to show a stronger impact of ownership concentration which we allude to concerns of maintaining reputation. The research results remain after controlling for technology corporations. The findings' have important implications for policy makers, practitioners and regulators, especially in emerging economies globally.Keywords: Agency Conflict, Corporate Financial Valuation, Independent Directors' Term in the Office, Corporate Governance, Family Corporations, Emerging Markets

OP48 Nursing Requirements In Long-Term Care: A Health Technology Assessment

2019 ◽  
Vol 35 (S1) ◽  
pp. 11-12
Author(s):  
Paula Corabian ◽  
Charles Yan ◽  
Susan Armijo-Olivo ◽  
Bing Guo
Keyword(s):  
Nursing Care ◽  
Nursing Staff ◽  
Real World ◽  
Research Evidence ◽  
Long Term Care ◽  
Staff Time ◽  
Term Care ◽  
Policy Makers ◽  
The Relationship

IntroductionThe objectives of this study were to systematically review published research on the relationship between nursing staff coverage, care hours, and quality of care (QoC) in long-term care (LTC) facilities; and to conduct a real world evidence (RWE) analysis using Alberta real world data (RWD) to inform policy makers on whether any amendments could be made to current regulations.MethodsA systematic review (SR) of research evidence published between January 2000 and May 2018 on the relationship between nursing staff coverage, care hours, and QoC in LTC facilities was conducted. Panel data regressions using available RWD from Alberta, Canada, were performed to assess associations between nursing care hours and LTC outcomes. Outcomes of interest included quality indicators related to resident outcomes, hospital admissions, emergency room visits and family satisfaction. Nursing care hours considered in SR and RWE analysis included those provided by registered nurses (RNs) and licensed practical nurses (LPNs).ResultsThe SR found inconsistent and poor quality evidence relevant to the questions of interest, indicating a great uncertainty about the association between nursing staff time and type of coverage and QoC. Although some positive indications were suggested, major weaknesses of reviewed studies limited interpretation of SR results. RWE analysis found that impact of care hours on LTC outcomes was heterogeneous, dependent on outcome measurements. There was evidence that total staff, RN, and LPN hours had positive effects on some resident outcomes and magnitude of effect differed for different nursing staff.ConclusionsNo definitive conclusion could be drawn on whether changing nursing staff time or nursing staff coverage models would affect residents’ outcomes based on the research evidence gathered in the SR. RWE analysis helped to fill a gap in the available published literature and allowed policy makers to better understand the impact of revising current regulations based on actual outcomes.

scholarly journals A Fuzzy-MOP-Based Competence Set Expansion Method for Technology Roadmap Definitions

Mathematics ◽  
2021 ◽  
Vol 9 (2) ◽  
pp. 135
Author(s):  
Chi-Yo Huang ◽  
Jih-Jeng Huang ◽  
You-Ning Chang ◽  
Yen-Chu Lin
Keyword(s):  
Academic Research ◽  
Expansion Method ◽  
Management Tool ◽  
Research Database ◽  
Policy Makers ◽  
Technology Roadmapping ◽  
Technology Roadmap ◽  
High Technology Firms ◽  
Mathematical Programming Method ◽  
Intellectual Properties

Technology roadmaps have been widely adopted as an important management tool during the past three decades after their invention by Motorola in the 1980s. Technology roadmapping processes can be integrated with a firm’s competence sets and play dominant roles in strategy definitions. Although the issue of how multiple objectives can be dealt with in technology roadmaps by including the uncertainties of the modern management environment is important, it has seldom been addressed. To remedy this, we aim in this research to propose a competence set expansion method based on fuzzy multiple objective programming (FMOP). An empirical study based on the roadmapping of silicon intellectual properties (SIPs) of automotive applications will be used to demonstrate the feasibility of the proposed roadmapping method. In the future, the proposed analytic technique can be integrated with the data mining results of academic research database, patent libraries, etc. The well-verified mathematical programming method can serve as a basis for research and development (R&D) strategy definitions by managers of high-technology firms as well as policy makers of governments.

Developing a new behavioral framework for dementia care partner resilience (CP-R): A mixed research synthesis

2020 ◽  
Author(s):  
Yuanjin Zhou ◽  
Avery O’Hara ◽  
Emily Ishado ◽  
Soo Borson ◽  
Tatiana Sadak
Keyword(s):  
Help Seeking ◽  
English Language ◽  
Relevant Literature ◽  
Research Synthesis ◽  
Dementia Care ◽  
Domain Identification ◽  
Care Partners ◽  
Learning From Others ◽  
Design And Methods ◽  
The Impact

Abstract Background and Objectives Caring for a person living with dementia requires resilience, the capacity to recover and grow from challenging situations. Despite the increasing interest in assessing and promoting resilience for dementia care partners, behaviors that indicate this attribute are not well known. The goal of this study is to synthesize the literature to identify resilience-related behaviors and develop a new framework for future validation and intervention research. Research Design and Methods We searched English-language peer-reviewed articles (January 1991 – June 2019) reporting qualitative or quantitative descriptions of resilience-related behaviors among dementia care partners. Thematic analysis was used to categorize behaviors into domains, identify the relationships among them, and generate a thematic map. Results Sixteen articles were identified according to predefined inclusion criteria. Four domains emerged: (1) problem-response behaviors (problem-solving, problem-distancing); (2) self-growth behaviors (self-care activities, spiritual-related activities, and developing and maintaining meaningful social relationships); (3) help-related behaviors (help-seeking and help-receiving), and (4) learning-related behaviors (learning from others and reflection). Definitions of each domain, identification of corresponding behaviors, and formulation of Care Partner Resilience (CP-R) behavioral framework were informed by this mixed research synthesis and other relevant literature. Discussion and Implications The CP-R framework emerged as a result of a new focus on identifying and cultivating strengths instead of evaluating strain and burden. It serves as a useful foundation for understanding the impact of specific behaviors on dementia care partner resilience. Once validated, this framework will inform the development of future measures, research, interventions, and policies for dementia care partners.

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