scholarly journals Examining Types of Audit Judgment and Objectivity Threat: Empirical Findings from Public and Private Sector Internal Auditors in Malaysia

2020 ◽  
Vol 2 (2) ◽  
pp. 91-104
Author(s):  
Fazlida Mohd Razali
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Cognitive Biases ◽  
Internal Audit ◽  
Success Factor ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Audit Judgment ◽  
Significant Difference ◽  
The Impact

Increasing number of litigation suits against internal auditors has proved that there is heightened scrutiny on the quality of internal auditor’s judgment. As internal auditor’s judgment relies highly upon by the stakeholders, this paper aims to identify the types of audit judgment deemed to be critical for the success of an audit engagement. It also explores the types of objectivity threat experienced by Malaysian internal auditor. The present study also examined if there had been significant difference between objectivity threat experienced by public sector internal auditors and those of the private sector. The paper opted for an exploratory study using the questionnaires. A total of 150 copies of questionnaire were distributed to internal auditors working in private and public sectors. The findings indicated risk judgment (judgment on existing and emerging risk faced by organisation) as the most critical success factor in internal audit engagement. The findings also revealed that social pressure, cognitive biases, and intimidation as the top three threats that could threaten internal auditor objectivity, thus possibly affect internal auditor ability to make an objective judgment. However, this study found that there was no significant differences between the objectivity threats experienced by internal auditors in the private sector and those in the public sector. The research extent internal auditing literatures which focuses on the factors influencing internal auditor’s objectivity, but tended to omit the impact of the objectivity on influencing internal auditor’s judgment. This study has provided evidence of potentially serious risk of objectivity threats that may impair the internal auditors’ objectivity, thus reducing their ability to make an objective judgment. This paper fulfils an identified need to study flaws in internal auditor’s judgment and the existences of objectivity threat in Malaysian internal audit environment regardless either in public or private sector.Increasing number of litigation suits against internal auditors has proved that there is heightened scrutiny on the quality of internal auditor’s judgment. As internal auditor’s judgment relies highly upon by the stakeholders, this paper aims to identify the types of audit judgment deemed to be critical for the success of an audit engagement. It also explores the types of objectivity threat experienced by Malaysian internal auditor. The present study also examined if there had been significant difference between objectivity threat experienced by public sector internal auditors and those of the private sector. The paper opted for an exploratory study using the questionnaires. A total of 150 copies of questionnaire were distributed to internal auditors working in private and public sectors. The findings indicated risk judgment (judgment on existing and emerging risk faced by organisation) as the most critical success factor in internal audit engagement. The findings also revealed that social pressure, cognitive biases, and intimidation as the top three threats that could threaten internal auditor objectivity, thus possibly affect internal auditor ability to make an objective judgment. However, this study found that there was no significant differences between the objectivity threats experienced by internal auditors in the private sector and those in the public sector. The research extent internal auditing literatures which focuses on the factors influencing internal auditor’s objectivity, but tended to omit the impact of the objectivity on influencing internal auditor’s judgment. This study has provided evidence of potentially serious risk of objectivity threats that may impair the internal auditors’ objectivity, thus reducing their ability to make an objective judgment. This paper fulfils an identified need to study flaws in internal auditor’s judgment and the existences of objectivity threat in Malaysian internal audit environment regardless either in public or private sector.

scholarly journals Internal Audit Functions: An Empirical Study of Public and Private Sectors in Nigeria

2018 ◽  
Vol 2 (1) ◽  
pp. 26-37
Author(s):  
Abdulkadir Madawaki ◽  
Aidi Ahmi ◽  
Halimah @ Nasibah Ahmad
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Internal Audit ◽  
Audit Fees ◽  
Public And Private ◽  
Internal Auditor ◽  
Internal Auditors ◽  
External Auditors ◽  
The Public ◽  
Private And Public

The study examines the similarities and differences between the private and public sectors internal audit functions in Nigeria. The features examined include the hierarchical position of the internal audit functions, outsourcing of internal audit activities, reporting relationship of the internal auditor, and the coordination between internal and external auditors. A survey of internal audit managers of both sectors was undertaken to establish their current practices. The results revealed that there are no much differences in the hierarchical positioning of the internal audit function in both sectors. A substantial difference was found in the reporting lines of internal auditors in both sectors. The results further showed that private sector outsources internal audit activities more than the public sector and a slight difference exists between the two sectors about the level of coordination between internal and external auditors. Finally, the result indicated that private sector experiences a reduction in external audit fees compares to its counterpart in the public sector.      

Research from China finds no significant difference in impact of public service motivation (PSM) in public and private sectors

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Employee Performance ◽  
Intention To Leave ◽  
Public And Private ◽  
Content Type ◽  
The Public ◽  
Significant Difference ◽  
Set Up ◽  
The Impact

Purpose The authors assumed PSM would be higher in the public sector, but they set up a trial to find out if this was the case. Design/methodology/approach To test their theories, the authors conducted two independent surveys. The first consisted of 220 usable responses from public sector employees in Changsha, China. The second survey involved 260 usable responses from private sector employees taking an MBA course at a university in the Changsha district. A questionnaire was used to assess attitudes. Findings The results found no significant difference between the impact of public sector motivation (PSM) on employee performance across the public and private sectors. The data showed that PSM had a significant impact on self-reported employee performance, but the relationship did not differ much between sectors. Meanwhile, it was in the private sector that PSM had the greatest impact on intention to leave. Originality/value The authors said the research project was one of the first to test if the concept of PSM operated in the same way across sectors. It also contributed, they said, to the ongoing debate about PSM in China.

Financial Misappropriation in the Nigerian Public Sector: A Determination of the Role of the Internal Auditor

2017 ◽  
Vol 3 (2) ◽  
pp. 7-17
Author(s):  
J. K. Oyadonghan ◽  
S. Ogoun
Keyword(s):  
Public Sector ◽  
Research Effort ◽  
Internal Audit ◽  
The State ◽  
Least Square ◽  
Primary Data ◽  
Economic Management ◽  
Internal Auditor ◽  
Internal Auditors ◽  
The Public

The continued search for a solution to the problem of poor economic management due to financial misappropriation in the public sector, and the public’s outcry against internal auditors because of their perceived connivance necessitated the current study. Furthermore, the position canvassed by internal auditors with respect to their scope of responsibility further justified the need for this research effort. Accordingly, this study was undertaken to determine, whether or not, the internal auditor has a role to play in ensuring the proper utilization of the nation’s economic resources, bearing in mind the rules specifying the scope of the internal audit function in the public sector. Drawing from the research model of survey design, both a structured questionnaire and oral interview data collection platforms were deployed to collect primary data from audit, and another staff of selected ministries in the State and the least-square regression analysis was adopted in testing the hypotheses. From the analysis, and from personal interview, the researchers were able to find out that internal audit has a responsibility to detect and prevent financial misappropriation in the public sector. It was also found out that the internal auditors in the State Civil Service are not independent, which affects their freedom to report such acts of financial misappropriation to the legislative arm for proper action. Therefore, it is recommended that The State legislative arm should ensure that the independence of the internal auditor is guaranteed by a statute.

scholarly journals PERSEPSI TOP EXECUTIVE (SEKTOR PUBLIK DAN SWASTA) TERHADAP FUNGSI INTERNAL AUDIT

2012 ◽  
Vol 4 (1) ◽  
pp. 23 ◽  
Author(s):  
Hery .
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Internal Audit ◽  
T Test ◽  
Primary Data ◽  
Survey Method ◽  
Negative Perception ◽  
Significant Difference ◽  
Convenience Sampling ◽  
Top Executive

<p class="Style16">The Main purpose of this research is to find out: (1) on how the Top Executive give their perception against the function of internal audit, and (2) on differences, if any, between perception of public Top Executive and private Top Executive against internal audit.</p><p class="Style16">The method that is used to Collect data was based on survey method and convenience sampling. Primary data was taken from closed questionnaire, taken from 73 Top Executive, which consist of 41 Top Executive of public sector (BUMN) and 32 Top Executive of private sector. The Scale measurement using the method of Likert's scale on five points. Data then was analysed statistically (quantitative) by used Z observation and t-test to prove the truth of hypothesis .</p><p class="Style16">The result of analysis shows that any Top Executive have negative perception about internal audit and no significant difference between public Top Executive and private Top Executive about perception toward the function of internal audit, whether from aspects 'watchdog', audit tee performance, preventive, intemal consultant, or knowledge.</p><p class="Style1"><strong><em>Keywords: </em></strong><strong><em>Internal audit, perception, public &amp; private top executive</em></strong></p>

scholarly journals Planning and conducting internal audit in practice in the private sector

2020 ◽  
Vol 14 (2) ◽  
pp. 52-74
Author(s):  
Zorica Jović
Keyword(s):  
Private Sector ◽  
Action Plan ◽  
Sample Selection ◽  
Internal Audit ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Data Collection Process ◽  
The Individual ◽  
Audit Sampling ◽  
Insight Into

During the data collection process to understand and assess risk, internal auditors gain significant insight into operations and opportunities for improvement that can be extremely beneficial to the organization. This paper presents valuable insights into practical work that will assist internal auditors in the process of planning and conducting internal audit in the private sector. In the process of internal audit, it primarily starts from planning through the creation of an audit universe that includes a list of all potential audits based on risk and exposure assessment. The chief audit executive develops an annual action plan based on the audit universe. The annual plan should be broken down into four quarters and each defined audit should be arbitrarily assigned to one quarter. The beginning of the process of the planned audit begins with preparatory activities that include defining the objectives of the individual audit, preparation of a detailed schedule of the individual audit, conducting a preliminary survey. What follows is that audit sampling techniques (defined as the application of audit procedures to less than 100% of items within a class of transactions or account balance so that each sample unit has a chance to be selected) perform sample selection from the population. According to the selected model, the audit is approached on the basis of which the opinion of the internal auditor is issued in the created engagement report.

scholarly journals Role of Internal Auditor in Dealing with Computer Networks Technology - Applied Study in Islamic Banks in Jordan

2017 ◽  
Vol 10 (6) ◽  
pp. 259
Author(s):  
Atallah Ahmad Alhosban ◽  
Mohammed Al-Sharairi
Keyword(s):  
Computer Networks ◽  
Internal Audit ◽  
Islamic Banks ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Applied Study ◽  
The Impact ◽  
First Time ◽  
Physical Components

The aim of the study was to identify Role of internal auditor in dealing with computer networks technology - Applied study in Islamic banks in Jordan -. The objectives were to identify the role of the computer networks that are installed for the first time in addition to the role of the auditor in the physical components of computer networks and maintenance. The study community consists of internal auditors in Islamic banks or financial institutions, a total of 101 questionnaires were distributed and 89 questionnaires were retrieved for statistical analysis. A single sample test was used to test the hypotheses of the study. The arithmetic mean and the alpha test were used to find the internal consistency rate of the study sample. The most important results of the study: the presence of the impact of computer networks on the internal audit work environment both in the installation of the computer for the first time or provide the physical components of computer networks. The most important recommendations: The need to hold seminars and conferences using technology tools and their effects on the environment of internal auditing or external auditing or accounting environment in general.

scholarly journals Impact of internal auditing in supporting competitive advantage in Sudanese industrial establishments (Case study- Industrial DAL Company): تأثير المراجعة الداخلية في دعم الميزة التنافسية للمنشآت الصناعية بالسودان (دراسة ميدانية- شركة دال الصناعية)

2020 ◽  
Vol 4 (12) ◽  
Author(s):  
Abu baker Ahmed Yousif Mohammed Ali, Shihabeldeen Mohamed Ah
Keyword(s):  
Competitive Advantage ◽  
Internal Audit ◽  
Research Problem ◽  
Internal Auditing ◽  
Internal Auditor ◽  
Industrial Facilities ◽  
Internal Auditors ◽  
Recent Trends ◽  
The Right ◽  
The Impact

The study tackled the impact of internal auditing in supporting the competitive advantage in Sudanese industrial establishments. A field study on Dal Industrial Company. The research problem was how to activate، the impact of internal auditing in supporting the competitiveness of industrial establishments in Sudan. The research hypotheses were as follows: Initial Hypothesis: There is a statistically significant impact of internal auditing in supporting the competitive advantage. The second hypothesis: Emphasis services in the governance for internal audit in supporting the competitive advantage of industrial facilities. There is a statistically significant effect on the relationship between advisory services as internal auditing in supporting the competitive advantage of industrial establishments. The methodology of the study used descriptive and analysis approach. The researcher used the questionnaire to collect field data. The results were including the recent trends of the impact of internal audit to advise the internal auditor in support the competitive advantage of Company. Recent trends in internal auditing have ensured that information is accurate that helps management make the right decisions and support the competitive advantage. The recommendations، the need for internal audit management to advise and advise the internal auditor. Auditors who have sufficient knowledge of the standards of professional performance. The need to continue to train internal auditors through seminars and attend conferences to keep up with the latest developments of internal audit.

The Development of Internal Auditing as a Profession in the U.S. During the Twentieth Century

2017 ◽  
Vol 44 (2) ◽  
pp. 47-67 ◽  
Author(s):  
Susan Parker ◽  
Lynn A. Johnson
Keyword(s):  
Professional Identity ◽  
Internal Control ◽  
Self Regulation ◽  
Internal Audit ◽  
Professional Community ◽  
Internal Auditing ◽  
Internal Auditor ◽  
Business World ◽  
Internal Auditors ◽  
The Impact

ABSTRACT This paper traces the development of internal auditing from the standpoint of its professional identity. The question of how internal auditors have historically seen themselves bears on how they function as integral parts of internal control systems, and may help researchers formulate future empirical studies of internal auditing. Over the years, the self-perception of the internal audit profession's function has varied greatly. Internal auditing has lived, to some extent, in the shadow of the public accounting profession, while struggling to achieve public recognition, status in the business world, and a defined role separate from that of an internal monitor, subsidiary to the external auditor. While there have been many changes in terms of the formation of a professional community, belief in the importance of the work, and the growth of a system of self-regulation, the demands of various constituents and the desires of internal auditors for professional status have led to a persistent struggle to define the appropriate functions and organizational placement of internal audit. This struggle continues up to the present time. Several things stand in the way of a complete professional identity for internal auditing. Internal auditing cannot lay claim to a clearly defined role that is uniquely its own. The internal audit function (IAF) does not own a skill set or knowledge base that is not shared by the external auditors. The impact on the ability to distinguish the internal auditor from the external consultant is detrimental to the profession. Neither has the internal auditor been able to attain complete autonomy. While the IAF now reports to the Board of Directors or its audit committee more frequently than in the past, its continuing strong connection with management hinders its ability to be truly self-determining. On the other hand, the contributions that internal auditors make to their organizations are very real, and the lack of an externally mandated role allows them to be utility players. For management, the availability of a utility player who can provide internal consulting or assistance that saves overall compliance costs is valuable, as is the ability for boards to rely on an IAF with a deep knowledge of the organization.

The Impact of the Professional Competence of the Internal Auditor in Improving the Quality of Accounting: Analytical Study

2021 ◽  
Vol 2 (5) ◽  
pp. 85-99
Author(s):  
Jasim Rahi Kadim ◽  
Yousif Mousa Sabti ◽  
Ghazanfar Ali ◽  
Wameedh A. Khdair ◽  
Karim Hazen Shaltag
Keyword(s):  
Professional Competence ◽  
Stock Exchange ◽  
Internal Audit ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Quality Of Accounting Information ◽  
Private Banks ◽  
Questionnaire Form ◽  
The Impact

The aim of the research is to test the impact of the professional competence of the internal auditor in improving the quality of accounting information (QAI). The research community consists of a group of Iraqi private banks listed in the Iraqi Stock Exchange, and the research sample includes accountants, internal auditors and internal audit managers, and for the purpose of data collection, the researcher prepared a questionnaire form, as (52) forms were distributed to the individuals of the research sample and (49) forms were recovered from them, and the form valid for analysis reached (44) forms. The data of which were analyzed using the statistical package (SPSS). The research reached conclusions, including the existence of a correlation and moral effect between the variables of the research, and among the recommendations made by the research directing banks’ attention to the need to continue holding conferences and seminars in coordination with the competent bodies and academics to develop the capabilities and capabilities of internal auditors in companies.

Core and Legitimate Roles of Internal Audit Function and Enterprise Risk Management: Propositions for Future Research

2019 ◽  
Vol 10 (9) ◽  
pp. 891-901
Author(s):  
Suaad Jassem ◽  
Keyword(s):  
Risk Management ◽  
Internal Audit ◽  
Enterprise Risk Management ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Corporate Scandals ◽  
The Core ◽  
Enterprise Risk ◽  
Core Components ◽  
The Impact

In the aftermath of global corporate scandals at the start of the new millennium government policy makers and international regulatory organizations launched several initiatives to anticipate and mitigate the impact of enterprise risk that can seriously damage economies of nations and bankrupt globally recognized companies. The typical roles of internal auditors have failed to prevent frauds and financial crimes from taking root in organizations. As a result, paradigms such as Enterprise Risk Management took centre-stage and became vital considerations and organizations such as the Institute of Internal Auditors along with other global platforms such as the Committee of Sponsoring Organizations of the Treadway Commission to address the issue of enterprise risk. However, despite all these measures new corporate scandals have emerged, inviting scope for further investigation on matters such as how defined internal audit functions relate to Enterprise Risk Management. This paper proposes a conceptual link between the core and legitimate roles of internal auditor function and enterprise risk management. The roles of internal auditor function are based on the Institute of Internal Auditors Position Paper (2009) and the core components of Enterprise Risk Management are identified based on the Committee of Sponsoring Organizations (2017) Enterprise Risk Management Integrated Framework. This study further proposes a set of propositions suggesting the possible association of the core and legitimate roles of internal auditors on the five core components of Enterprise Risk Management. The output of this study is expected to lay the foundation for further empirical studies to develop a finer-grained understanding of how internal auditor function roles relate to Enterprise Risk Management implementation.

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