Robotic Process Automation for the Extraction of Audit Information: A Use Case

The reconciliation of audit evidence to the audit subject matter is a key and recurring audit procedure. Before reconciling information, data needs to be extracted from the audit subject matter, which is often in a Portable Document Format (PDF). Reconciliations are a recurring task for every new version of the audit subject matter. Large audit firms tend to “offshore” simple and repetitive audit tasks such as reconciliations to shared service centers. Offshoring however comes at the expense of coordination costs, delays in the process and challenges regarding the liability risk to the auditor. This paper presents an open-source algorithm to extract data from (draft) annual reports (PDF files) using Python to automate, rather than outsource, the data extraction for reconciliations. The algorithm resulted in a significant time saving for the audit of a large Dutch asset management firm. Researchers apply the algorithm to minimize hand-collection of financial statement data.

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Audit firms and industry specialization in an emerging economy

Journal of Accounting & Organizational Change ◽

10.1108/jaoc-03-2017-0024 ◽

2018 ◽

Vol 14 (3) ◽

pp. 338-362

Author(s):

Karim Hegazy ◽

Mohamed Hegazy

Keyword(s):

Financial Services ◽

Capital Investment ◽

Emerging Economy ◽

Annual Reports ◽

Brand Name ◽

Industry Specialization ◽

Content Type ◽

Audit Firm ◽

Big 4 ◽

Audit Firms

PurposeThis study aims to investigate the implications of audit industry specialization on auditor’s retention and growth within an emerging economy. Factors such as whether the firm is a Big 4, a firm with international affiliation, a local firm and the type of industry were studied to analyse the reasons behind audit firm retention and growth.Design/methodology/approachThis research is based on a field study related to audit firms providing services to listed companies in an emerging economy. The sample includes the top 100 publicly held companies’ in the Egyptian stock market during 2006-2011 for which their annual reports are analysed to determine the audit firms’ retention and growth. An assessment of the continuity of the auditors and the increase in the number of audit clients were also measured.FindingsThe results confirm that industry specialization has an important effect on the auditor’s retention, especially for industries where capital investment is significant such as buildings, construction, financial services, housing and real estate. Big 4 audit firms retained their clients because of their industry specialization and brand name. Evidence was found that good knowledge of accounting and auditing standards resulted in audit firms with international affiliation competing with the Big 4 for clients’ retention and growth.Originality/valueThis study contributes to the existing literature, as it is among the first to provide empirical evidence on auditor retention, growth and auditor’s dominance in an emerging economy such as Egypt.

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Key Mechanisms of Risk Management in South Africa’s National Government Departments: The Public Sector Risk Management Framework and the King III Benchmark

Central European Public Administration Review ◽

10.17573/ipar.2016.2-3.02 ◽

2016 ◽

Vol 14 (2-3) ◽

Author(s):

Tankiso Moloi

Keyword(s):

Risk Management ◽

Management Practices ◽

Data Extraction ◽

Risk Process ◽

National Government ◽

Annual Reports ◽

Risk Governance ◽

Risk Disclosure ◽

Poor Risk ◽

Management Disclosures

Government provides essential services to the population and therefore, uncertainties that could hinder government’s objectives should be identified, mitigated/controlled and monitored. Using the content analysis for data extraction in the annual reports of national government departments (NGDs), this paper explored risk management practices in South Africa’s public service, with national government departments as a case in point. The findings are that in general, there are poor risk management practices in the NGDs as the majority of the observed categories were not disclosed in the NGDs annual reports.Since risk deals with the uncertainties on the objectives, it is concerning that NGDs have poor risk management practices, particularly because they are enablers (implementers) of government overarching strategy. As enablers of government strategy, it is recommended that NGDs view risk management as a process that enables them to identify threats which could hinder the attainment of their objectives, whilst also leveraging opportunities that may arise. It is further recommended that the risk process is viewed as a scenario or option analysis exercise that allows NGDs to properly plan, understand the intended outcomes and prepare responses to deal with any uncertainties. A summarised and harmonized risk governance requirement used for the purpose of exploring risk management disclosures has been suggested by this study and it could be used as a reference point of risk disclosure improvement by NGDs.

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ISA 701 and Materiality Disclosure as Methods to Minimize the Audit Expectation Gap

Journal of Risk and Financial Management ◽

10.3390/jrfm12040161 ◽

2019 ◽

Vol 12 (4) ◽

pp. 161

Author(s):

Tomasz Iwanowicz ◽

Bartłomiej Iwanowicz

Keyword(s):

Oil And Gas ◽

Stock Exchange ◽

Annual Reports ◽

Analysis Tool ◽

Consolidated Financial Statements ◽

Expectation Gap ◽

Audit Firms ◽

National Bank ◽

Food Media ◽

Market Indexes

Purpose: The main purpose of this paper is to determine how particular audit firms deal with ISA 701 requirements and the society expectations towards reporting the materiality levels. Additionally, the aim of this paper is to range the assertions in terms of the frequency of their occurrence. Design/methodology/approach: The tested sample consisted of 317 companies listed on Warsaw (158 companies) or London (159 companies) stock exchange. The analysis was divided into companies from the following ten market indexes (WIGs): construction, IT, real estate, food, media, oil and gas, mining, energy, automotive and chemicals. The research was executed based on the analysis of annual consolidated financial statements (annual reports) and independent auditor reports that were published by in-scope entities for the latest twelve-months period available as at the date of the research (mostly periods ended on 31 December 2017 and 31 March 2018). All values were denominated to euro (EUR) with use of average exchange rates published by the National Bank of Poland. All performed analyses and developed charts were supported by Microsoft Power BI data analysis tool. Findings: The general conclusion, which may be drawn from this research, is that implementation of ISA 701 and materiality disclosure limited the audit expectation gap. Detailed observations are described throughout the paper and summarized in the conclusions section. Originality/value: This study extends the prior research by providing various dimensions of the analysed matters. It contributes to understanding of the audit expectation gap and investigates on methods of minimizing it.

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SEBI's Regulation of the Indian Securities Market: A Critical Review of the Major Developments

Vikalpa The Journal for Decision Makers ◽

10.1177/0256090920100402 ◽

2010 ◽

Vol 35 (4) ◽

pp. 13-26 ◽

Cited By ~ 6

Author(s):

G Sabarinathan

Keyword(s):

Asset Management ◽

Economic Consequences ◽

Securities Market ◽

Annual Reports ◽

Tight Set ◽

Listed Firms ◽

Sarbanes Oxley ◽

The World ◽

The Usa ◽

Trading Volumes

Since the empowerment of the Securities and Exchange Board of India (SEBI) through an Act of Parliament in 1992, SEBI has come up with a number of initiatives aimed at regulating and developing the Indian securities market and improving its safety and efficiency. These initiatives have made an impact on nearly every aspect of the market. Some of those initiatives have transformed the market fundamentally. Particularly noteworthy is the growth in the following: Market capitalization Number of listed firms Trading volumes and turnover both in the spot and futures markets. There is a growing network of financial intermediaries that operate in a highly competitive environment while being governed by a tight set of norms. India has one of the most sophisticated new equity issuance markets. Disclosure requirements and the accounting policies followed by listed companies for producing financial information are comparable to the best regimes in the world. The Indian securities market is among the safest and the most efficient trading destinations internationally. The Indian corporate governance code is compared to the Sarbanes Oxley Act of the USA. India has one of the fastest growing and well-developed asset management businesses in the world, with state-owned as well as private sector players. That said, the Indian market is often hostage to some scam or the other from time to time. Effective enforcement of compliance is cited as one of the reasons for these unsavoury episodes. The role that SEBI's initiatives have played in bringing about this transformation of the market has not been researched comprehensively so far. Literature that has analysed the efficiency and the design of the Indian securities market has examined the role of certain specific regulatory provisions on the functioning of the securities market. So also the various annual reports of SEBI discuss the regulatory and other institutional developments that took place during the year under review. However, no attempt seems to have been made to take stock of all the various initiatives of SEBI so far and assess its impact on the activity in the securities market. This paper identifies some of the major interventions of SEBI relating to each of these aspects of the market and critically examines the economic consequences of the same. Such a stock-taking will enable a well-rounded and objective review of SEBI's performance. It is also likely to suggest interesting areas for further research.

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DAMPAK MANAJEMEN ASET DAN MANAJEMEN UTANG TERHADAP LIKUIDITAS DAN PROFITABILITAS BUMN TERDAFTAR DI BURSA EFEK INDONESIA

JMM17: Jurnal Ilmu Ekonomi dan Manajemen ◽

10.30996/jmm17.v6i01.2445 ◽

2019 ◽

Vol 6 (01) ◽

Author(s):

Nur Kamiliyah Firizq ◽

Nekky Rahmiyati ◽

Tri Ratnawati

Keyword(s):

Data Collection ◽

Asset Management ◽

Secondary Data ◽

Debt Management ◽

Annual Reports ◽

Company Performance ◽

Operational Costs ◽

Data Source ◽

Performance Reports ◽

The Impact

The purpose of this study was to determine the impact of asset management and debt management on the liquidity and profitability of SOEs listed on the Indonesia StockExchange for the period 2014-2017. This study use the object of research as 16 BUMNcompanies. The data source used is secondary data, data collection techniques in thisstudy are documentation of company performance reports on the Indonesia StockExchange and company annual reports. The results of the study show that therelationship between asset management and debt management is directly proportional.There is no significant impact of asset management on liquidity and profitability becausethe asset management on 2017 has increased while profitability and liquidity has fallenthis is due to the company's large operational costs financed by debt. Debt managementfor liquidity and profitability has an impact on decreasing liquidity and profitability whendebt management rises. Keywords: Liquidity, Asset Management, Debt Management and Profitability

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The identification of risks of material misstatement based on key audit matters in line with International Standard on Auditing 701

Zeszyty Teoretyczne Rachunkowości ◽

10.5604/01.3001.0013.6053 ◽

2019 ◽

Vol 2019 (105 (161)) ◽

pp. 17-30

Author(s):

Tomasz Iwanowicz

Keyword(s):

Data Analysis ◽

Real Estate ◽

Financial Statements ◽

Annual Reports ◽

Stock Exchanges ◽

Analysis Tool ◽

Market Sector ◽

Audit Firms ◽

Data Analysis Tool ◽

Audit Reports

The purpose of this paper is to determine what key audit matters (KAM) have been identified by statutory auditors from various audit firms in companies from various industries, which assertions appeared most often in the audit reports, and what the links were between the auditing company, KAM, the assertion and the market sector. The research sample consisted of 317 companies listed on the Warsaw (158 companies) and London (159 companies) stock exchanges. The analysis was divided into companies from the following ten market sectors: construction, chemicals, energy, mining, IT, media, automotive, real estate, oil & gas and food. The research was executed based on the analysis of annual financial statements (annual reports) and independent auditor reports that were published by in-scope entities for the latest twelve-month period available as at the date of the research (the twelve-month periods ended on December 31, 2017, and March 31, 2018). The auditors of the tested companies identified a total of 793 unique KAMs. Based on their detailed descriptions, they were then divided into 36 categories (including the cate-gory ‘none’), and they were finally mapped with a total of 2,094 assertions from 7 types. All analyses and developed charts were supported by the Microsoft Power BI data analysis tool.

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DAMPAK MANAJEMEN ASET DAN MANAJEMEN UTANG TERHADAP LIKUIDITAS DAN PROFITABILITAS BUMN TERDAFTAR DI BURSA EFEK INDONESIA

JMM17: Jurnal Ilmu Ekonomi dan Manajemen ◽

10.30996/jmm.v6i01.2445 ◽

2019 ◽

Vol 6 (01) ◽

Author(s):

Nur Kamiliyah Firizq ◽

Nekky Rahmiyati ◽

Tri Ratnawati

Keyword(s):

Data Collection ◽

Asset Management ◽

Secondary Data ◽

Debt Management ◽

Annual Reports ◽

Company Performance ◽

Operational Costs ◽

Data Source ◽

Performance Reports ◽

The Impact

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Assessing Internal Audit with Text Mining

Journal of Information & Knowledge Management ◽

10.1142/s021964921850020x ◽

2018 ◽

Vol 17 (02) ◽

pp. 1850020 ◽

Cited By ~ 1

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.

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1MDB: The Audit Firms’ Questions

Journal of Public Administration and Governance ◽

10.5296/jpag.v6i1.9057 ◽

2016 ◽

Vol 6 (1) ◽

pp. 73

Author(s):

Azham Md. Ali

Keyword(s):

Subject Matter ◽

Joint Venture ◽

Audit Failure ◽

Auditor Switching ◽

Audit Firms ◽

The Subject ◽

Joint Venture Partner

The 1Malaysia Development Berhad (1MDB) has had three auditors since it started its operation several years ago. The issues of interest are related to the subject matter of auditor switching and the audit failure allegations made against its two latter auditors: KPMG and Deloitte. When it concerns Deloitte, it was accused of hiding 1MDB’s insolvency. As for the KPMG, it was accused of failing to expose the allegedly suspicious transactions between 1MDB and its joint venture partner Petrosaudi International Limited (PSI) to the relevant authorities. As for the auditor switching from KPMG to Deloitte, questions arose on the reasons for and its timing.

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Main trends of development of stock market infrastructure institutions of Ukraine

ED/2019/1 - The economic discourse ◽

10.36742/2410-0919-2019-3-9 ◽

2019 ◽

pp. 86-94

Author(s):

Andrii Nimkovych

Keyword(s):

Stock Market ◽

Asset Management ◽

Joint Venture ◽

Research Process ◽

Economic Research ◽

Infrastructure Development ◽

Rating Agencies ◽

Depository Institutions ◽

Audit Firms ◽

Market Infrastructure

Introduction. The development of the stock market in modern conditions requires the introduction of new institutions and infrastructure tools aimed at increasing the efficiency of its functioning. In this regard, the study of trends in the development of infrastructure institutions of the stock market of Ukraine is an urgent task of economic research. Methods. The following methods are used during research process. Among them are: abstract and logical, system and monographic analysis, generalization, historical, statistical analysis. Results. The article investigates the state and dynamics of the stock market infrastructure development in Ukraine. Indicators such as the number of registered joint-stock companies, depository institutions, securities traders, asset management companies and joint venture institutions, rating agencies, audit firms on stock market, stock exchanges, and also non-government pension funds are selected to analyze the functioning of the stock market infrastructure The article confirms the dynamics of a decrease in the number of registered joint-stock companies and a corresponding decrease in the number of depository institutions, securities traders, audit firms as infrastructure institutions. It is shown that the development of stock market infrastructure institutions is significantly affected by the increase in the number of small investors, the growing role of information and, accordingly, the number and scale of rating agencies and information systems. Discussion. Prospects for further research are the forming of a development strategy for the institutions of the Ukrainian stock market infrastructure. Keywords: stock market, market infrastructure, institute of infrastructure, development, securities.

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