scholarly journals Follow up on External Audit Result: Evidence from Telecommunications Companies in Indonesia

2020 ◽  
Vol 1 (3) ◽  
pp. 71-76
Author(s):  
Wahyuni Wahyuni ◽  
Khadijah Darwin ◽  
Nurul Fuada
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
Fixed Asset ◽  
External Audit ◽  
Internal Auditors ◽  
External Auditors ◽  
Audit Result ◽  
Quantitative Descriptive ◽  
Telecommunications Companies

This study aims to analyze the follow-up of external audit results at PT. Telkom Region IX, Tbk. The research method used by researchers is quantitative descriptive data collection in the form of financial statements audited by the internal auditors and external auditors in 2018 and followed up by asking opinions for informants related to financial reporting. Based on the results of an analysis of research conducted at PT. Telkom states that the audited financial statements in 2018 show the results of an opinion that is reasonable with the exception due to inconsistencies and human resources implementing multiple positions in a company's activities, which can be seen when preparing different fixed asset reports in 2017 and 2018 , so based on the problem it does not show the category of cheating because the reasons presented by the management at the time of the inspection are considered reasonable because it is only done once so that the calculation of depreciation in the following year does not repeat the mistake again, but if the following year changes the depreciation method then this is a an intentional fraud because it has been committed more than once.

scholarly journals The Importance of External Audit in Detecting Abnormalities and Fraud in the Financial Statements of Public Enterprises in Kosovo

Ekonomika ◽  
2019 ◽  
Vol 98 (1) ◽  
pp. 124-134
Author(s):  
Hysen Ismajli ◽  
Edona Perjuci ◽  
Vlora Prenaj ◽  
Medina Braha
Keyword(s):  
Financial Reporting ◽  
Audit Quality ◽  
Negative Relationship ◽  
Financial Statements ◽  
National Audit ◽  
Public Enterprises ◽  
External Audit ◽  
External Auditors ◽  
Secondary Sources ◽  
The Impact

[full article and abstract in English] This paper focuses on determinants and their impact on the audit of public enterprises in Kosovo. In addition, it analyzes the impact of audit quality on improving the transparency and accountability of those enterprises. The study also assesses factors that affect the effectiveness and ineffectiveness of information in the audit reports of the Kosovo National Audit Office. The data were obtained based on observations, documentation, questionnaires, and interviews. Respondents were internal auditors of public enterprises in Kosovo as well as external auditors of the Kosovo National Audit Office. This research was designed using primary and secondary sources of data and was carried out in accordance with statistical analysis methods using the average algebraic size method and absolute variation indicators. The findings of this paper suggest that external auditors consider the potential risk of errors and fraud as being high, that they have aversive attitudes against errors and fraud, and that there exists for them a negative relationship between errors, fraud and financial reporting. Also, the quality of external audit positively affects the detection of fraud and anomalies within financial statements.

Does Incentive-Based Compensation for Chief Internal Auditors Impact Objectivity? An External Audit Risk Perspective

2016 ◽  
Vol 36 (2) ◽  
pp. 21-43 ◽  
Author(s):  
Lucy Huajing Chen ◽  
Hyeesoo H. (Sally) Chung ◽  
Gary F. Peters ◽  
Jinyoung P. (Jeannie) Wynn
Keyword(s):  
Financial Reporting ◽  
Internal Audit ◽  
Positive Association ◽  
Audit Fees ◽  
Data Availability ◽  
Company Performance ◽  
Potential Threat ◽  
External Audit ◽  
Internal Auditors ◽  
Survey Responses

SUMMARY This paper considers the potential impact of internal audit incentive-based compensation (IBC) linked to company performance on the external auditor's assessment of internal audit objectivity. We posit that external auditors will view IBC as a potential threat to internal audit objectivity, thus reducing the extent of reliance on the work of internal auditors and increasing the assessment of control risk. The increase in risk and external auditor effort should result in higher audit fees. We hypothesize that the form of incentive-based compensation, namely stock-based versus cash bonuses, moderates the association between IBC and external audit fee. Finally, we consider whether underlying financial reporting risk mitigates the external auditor's potential sensitivity to IBC. We find a positive association between external audit fees and internal audit compensation based upon company performance. The association is acute to IBC paid in stock or stock options as opposed to cash bonuses. We also find evidence consistent with the IBC associations being mitigated by the company's financial reporting risks. Data Availability: Individual survey responses are confidential. All other data are derived from publicly available sources.

Contemporary issues in financial reporting, auditing and corporate governance

2013 ◽  
Author(s):  
Noor Afza Amran
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Ethnic Diversity ◽  
Good Governance ◽  
Internal Auditors ◽  
Corporate Managers ◽  
Auditor Choice ◽  
External Auditors ◽  
Expectation Gap ◽  
Corporate Social

Contemporary Issues in Financial Reporting, Auditing and Corporate Governance offers theoretical and empirical background on three fundamental areas of accounting, namely financial reporting, auditing and corporate governance.This book is written in a clear and reader-friendly manner to create readers interest in the central issues of discussion. The uniqueness of this book is in its extensive coverage of national and internationally-oriented issues of financial reporting, auditing and corporate governance. This book is ideal for accounting and business related courses at upper undergraduate and post-graduate levels. With its broad coverage, the book should also be of interest to academicians, professionals, corporate managers, regulatory bodies and researchers.The articles written in this book are: Corporate Social Responsibility and Post-Crisis StrategyEmployee Stock Options Popularity of Financial Ratios in the Annual ReportsThe Relationship between Pension Funds and Dividend PayoutDoes Audit Firm Merger Add Value to Its Clients? Co-operation between Internal and External Auditors: From the Perspective of Internal Auditors in Malaysian Local Authorities Auditor Choice: Events and TheoriesThe Global Audit Expectation Gap: Within and between Muslim CountriesOwnership Holdings: Selected Malaysian Family Businesses Ethnic Diversity in Malaysian Initial Public OfferingsCEO Succession in Malaysian PLCs: Does Firm Characteristic Make a Difference?A Framework of Good Governance: Lessons for the Inland Revenue Board Malaysia.

An Assessment of Compliance with Disclosure Requirements of IAS 41 (Agriculture) By Listed Agricultural Firms in Nigeria

2019 ◽  
pp. 9-18
Keyword(s):  
Financial Reporting ◽  
Stock Exchange ◽  
Financial Statements ◽  
International Accounting Standards ◽  
Listed Firms ◽  
External Auditors ◽  
Disclosure Requirements ◽  
Statutory Requirement ◽  
The One ◽  
Reporting Entity

This study examined the extent of compliance with disclosure requirements of IAS 41 by agricultural companies listed on the Nigerian Stock Exchange (NSE) for the period of 5 years (2013-2017). The data for the study were obtained from the published financial statements of the sampled firms for the period under review from which a compliance index were constructed, The tools for analysis used were the qualitative grading using a compliance index and the one way ANOVA purposely to test the hypotheses proposed. The study observed that three out of the four Companies achieved more than 70% with overall mean scores of 76.02%. This shows that majority of the agricultural firms in Nigeria strongly complied with the disclosure requirements of IAS 41. Based on the findings the study recommends among others that firms should strive at all times to comply with all regulatory and statutory requirement in the preparation and presentation of financial statements, giving the fact that it is a set of documents that prescribe the performance of the reporting entity. The Financial Reporting Council of Nigeria should publish annually the compliance status of all listed firms in Nigeria; so that the compliance status of every firm will become known to all interested users of financial statements; and also the Council should urge external auditors of firms to ensure that their clients are complying with the requirements of IASs issued by the International Accounting Standards Board (IASB).

Audit committee ownership and audit report lag: evidence from Australia

2020 ◽  
Vol 28 (1) ◽  
pp. 96-125
Author(s):  
Md. Borhan Uddin Bhuiyan ◽  
Mabel D’Costa
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Reporting Quality ◽  
Financial Statements ◽  
Audit Committees ◽  
Financial Reporting Quality ◽  
Audit Report ◽  
Content Type ◽  
External Auditors ◽  
Using Data

Purpose This paper aims to examine whether audit committee ownership affects audit report lag. Independent audit committees are responsible for overseeing the financial reporting process, to ensure that financial statements are both credible and released to external stakeholders in a timely manner. To date, however, the extent to which audit committee ownership strengthens or compromises member independence, and hence, influences audit report lag, has remained unexplored. Design/methodology/approach This paper hypothesizes that audit committee ownership is associated with audit report lag. Further, the author hypothesize that both the financial reporting quality and the going concern opinions of a firm mediate the effect of audit committee ownership on audit report lag. Findings Using data from Australian listed companies, the author find that audit committee ownership increases audit report lag. The author further document that financial reporting quality and modified audit opinions rendered by external auditors mediate this positive relationship. The results are robust to endogeneity concerns emanating from firms’ deliberate decisions to grant shares to the audit committee members. Originality/value The study contributes to both the audit report timeliness and the corporate governance literatures, by documenting an adverse effect of audit committee ownership.

scholarly journals Sistem Akuntansi Pengelolaan Dana Desa

2016 ◽  
Vol 19 (2) ◽  
pp. 323
Author(s):  
Ari Kuncara Widagdo ◽  
Agus Widodo ◽  
Muhammad Ismail
Keyword(s):  
Community Service ◽  
Financial Reporting ◽  
Financial Management ◽  
Financial Statements ◽  
Fund Management ◽  
Home Affair ◽  
The Government ◽  
The Village ◽  
Computerized System

<p align="center"><strong><em>ABSTRACT</em></strong></p><p><em>In 2014, the government and parliament passed Law No. 6 of 2014 stipulates the rights and obligations of the village. A key point in the Act is allocation large enough of the village fund for each village across Indonesia. As a follow up of the Act, the government has also issued Regulation of the Minister of the Home Affair No. 113/2015 on the Financial Management of the Village which serves as a guide for the government in the villages to manage their of village fund. Legalization of this Act rise polemic in community. Some argue that the village funds that will be allocated to the village would pose a potential corruption of village officials. Therefore, this community service aims to find a variety of problems related to  management of the village fund and to provide guidance of village fund management. The community service is done in the village and the village Giriroto Kismoyoso Ngemplak District of Boyolali. In the early stages of community service, a team do an observation and direct discussions with the Village Head of Kismoyoso and Giriroto. It aims to gain a deeper knowledge of the issues related to the management of funds of village. The observation and discussion shows that the main problem that arises is the lack of knowledge of the village head in both villages to the technical implementing financial management of villages based on Regulation No. 113/2015. It is coupled with a lack of facilitators from Boyolali district to assist in both villages. The team considers that implementation of the financial reporting using computerized system | is a solution to overcome these obstacles. With the computerized system, village fund reporting will be done quickly and the finacial statements will also be more reliable than reporting manually. Therefore, the team filed the application computerized reporting by using the reporting software that generates the village fund financial statements as set out in Regulation No. 113/2015.</em></p><p align="center"><strong> </strong></p><p align="center"><strong>SARIPATI</strong></p>Pada tahun 2014, pemerintah dan DPR mengesahkan Undang-Undang Nomor 6 Tahun 2014 mengatur tentang hak dan kewajiban desa. Hal pokok dalam UU adalah adanya alokasi dana desa yang cukup besar untuk setiap desa. Pengesahan UU ini menimbulkan polemik dimasyarakat. Beberapa pihak menyambut gembira terbitnya UU tersebut karena adanya dana desa akan menjadikan desa sebagai pusat pembangunan. Sebaliknya, beberapa pihak berpendapat bahwa dana desa yang akan dialokasikan kepada desa akan menimbulkan potensi korupsi yang dilakukan aparat desa. Sebagai tindak lanjut UU tersebut, pemerintah juga telah menerbitkan Peraturan Menteri Dalam Negeri No. 113/2015 tentang Pengelolaan Keuangan Desa yang menjadi panduan bagi pemerintah desa dalam penata kelolaan keuangan desa. Oleh karena itu, pengabdian masyarakat ini bertujuan untuk  mengetahui berbagai permasalahan yang dialami desa terkait pengelolaan dana desa dan memberikan bimbingan dan pelatihan pengelolaan dana desa. Pengabdian di lakukan di Desa Kismoyoso dan Desa Giriroto Kecamatan Ngemplak Boyolali. Pada tahap awal pengabdian dilakukan observasi dan diskusi secara langsung dengan Kepala Desa Kismoyoso dan  Giriroto. Hal ini  bertujuan untuk memahami lebih dalam permasalahan kedua desa terkait pengelolaan dana desa. Hasil observasi dan diskusi menunjukkan bahwa permasalahan utama yang timbul adalah rendahnya pengetahuan dari kepala desa di kedua desa tersebut berserta pelaksana teknis terkait pengelolaan keuangannya desa berdasarkan Permendagri No. 113/2015. Hal itu ditambah lagi dengan belum adanya tenaga pendamping dari Kabupaten Boyolali yang diturunkan untuk mendampingi di kedua desa tersebut. Tim pengabdian menganggap pelaporan keuangan dana desa secara komputer merupakan solusi untuk mengatasi kendala tersebut. Permendagri No. 113/2015 hanya mengatur  format-format pelaporan secara manual dan tidak mensyaratkan adanya komputerisasi dalam pelaporannya. Disisi lain,  teknologi informasi komputer (TIK) telah semakin banyak digunakan karena biaya hardware dan software sudah cukup murah. Selain itu, sistem terkomputerisasi memiliki banyak keuntungan dibandingkan dengan sistem manual. Pelaporan dana desa mampu dilakukan dengan cepat dan output laporan keuangannnya juga akan lebih handal dibanding dengan pelaporan secara manual.  Oleh karena itu, tim pengabdian mengajukan penerapan pelaporan berkomputer dengan menggunakansoftware pelaporan dana desa yang menghasilkan laporan keuangan seperti yang diatur dalam Permendagri No. 113/2015. Proses pencatatan dan output laporan dari software ini dikembangkan mengacu pada Permendagri No. 113/2015 yang menjadi pedoman pengelolaan keuangan desa uantuk seluruh desa di Indonesia.

scholarly journals The scope and limitations of external audit in detecting frauds in company’s operations

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dragomir Dimitrijevic ◽  
Biljana Jovkovic ◽  
Suncica Milutinovic
Keyword(s):  
Bosnia And Herzegovina ◽  
Financial Statements ◽  
Mean Value ◽  
Financial Statement ◽  
External Audit ◽  
Content Type ◽  
External Auditors ◽  
The Republic ◽  
Practical Implications ◽  
Early Detection And Prevention

Purpose This study aims to investigate what are the capabilities and limits of external audit in detecting frauds in companies operating in the territory of the Republics: Serbia, Croatia, Macedonia and Bosnia and Herzegovina. Design/methodology/approach In total, 51 certified auditors from Serbia, Croatia, Macedonia and Bosnia and Herzegovina were surveyed to analyze what are the most frequent warning signals of the existence of the frauds auditors encounter during the verification of company’s financial statements. Findings The study indicated that the auditors of the Republic of Serbia more often encountered groundless overstatement of revenues compared with other countries, while regarding manipulative representation of inventories, the largest mean value and median are still among the auditors of the Republic of Serbia. Practical implications Based on the research results, it can be concluded that it is necessary to expand the legal obligation and power of external auditors when, in financial statement auditing, they come to clear findings that indicate fraud. Expansion of external auditors’ powers would reduce their current limitations and expand the domain of action. Originality/value Limitations in external auditors’ work prevent the processing of frauds. However, auditors’ analysis of financial statements and pointing to potential irregularities can be a good manner for the early detection and prevention of frauds in company’s operations.

Political uncertainty and the choice of external audit: international evidence from private firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Omar Farooq ◽  
Harit Satt ◽  
Basma El Fadel
Keyword(s):  
Institutional Environment ◽  
Financial Statements ◽  
Private Firms ◽  
Political Uncertainty ◽  
External Audit ◽  
High Exposure ◽  
Content Type ◽  
External Auditors ◽  
The Impact

PurposeThis paper documents the impact of political uncertainty on the decision of private firms to use external auditors to verify their financial statements.Design/methodology/approachThe authors use the data from 141 countries and the pooled logistic regression to test our arguments. The data is provided by the World Bank's Enterprise Surveys and is collected during the period between 2006 and 2019.FindingsThe results show that firms with high exposure to political uncertainty are more likely to use external auditors to verify their financial statements. The results are robust across various sub-samples and hold when we use alternate proxy for political uncertainty. The results are also robust after controlling for potential endogeneity concerns. The authors also find that the effect of political uncertainty on the choice of external audit is more pronounced for firms that are headquartered in countries with weak institutional environment. The authors document significant role of democracy, rule of law and accountability in determining the relationship between political uncertainty and the choice of external audit.Originality/valueThe authors believe that theirs is one of the initial attempts (if not the first) to investigate the effect of political uncertainty on the choice of external audit among the private firms in developing countries.

Implications of the Audit Oversight Board: External Auditors’ Perspective

2015 ◽  
Vol 2 (3) ◽  
pp. 1-4
Author(s):  
Mazlina Mustapha ◽  
Foong Sook Hwa
Keyword(s):  
Internal Audit ◽  
Financial Statements ◽  
Internal Auditors ◽  
Face To Face ◽  
External Auditors ◽  
The Public ◽  
Training Costs ◽  
Audit Firms ◽  
And Training

The purpose of Audit Oversight Board (AOB) is to oversee the external auditors who audit the listed companies. Its establishment is expected to improve the quality of the audited financial statements and to increase the confidence of the public on the quality of the services provided by the auditors. This study explores how the establishment of audit oversight board affects the auditors in Malaysia. As the study is exploratory in nature with limited studies being carried out on AOB, face-to-face interviews were conducted with the external auditors. The findings show that the establishment of AOB affects the job of external auditors, especially on the documentation and training costs, which vary across audit firms of different sizes. There are opinions that the increased pressure on the external auditors is not solely due to the establishment of AOB, but it is also due to the revised accounting standards and other regulations. The study also finds that the external auditors’ reliance on the internal auditors is not affected by the establishment of AOB. In addition, regardless of whether the internal audit department is in-house or outsourced, it will not affect the reliance of external auditors on the internal auditors work.

scholarly journals Drivers of Audit Failures: A Comparative Discourse

2020 ◽  
Vol 5 (7) ◽  
pp. 133-138
Author(s):  
Etim, E. Osim ◽  
Comfort Precious Goddymkpa ◽  
Nsima Johnson Umoffong
Keyword(s):  
Governance Structure ◽  
Corporate Management ◽  
External Audit ◽  
Corporate Governance Structure ◽  
Internal Auditors ◽  
Audit Failure ◽  
External Auditors ◽  
Study Approach ◽  
Audit Approach

The aim of this study is to identify the most potent factors driving audit failures by theoreticallyexploring two most publicized corporate and external audit failures cases in Nigeria and globally (EnronAndersen and Cadbury Akintola Williams Deloitte). An exploratory case study approach was adopted to analyze the selected two cases and several other external audit failures in extent literature. Findings reveal that audit failure factors are the same in the cases analyzed and compared and include poor audit approach, negligence and incompetency from the auditors, lack of professional questioning attitude, connivance with clients, fee dependence on major clients, long tenured appointment, external auditors acting as internal auditors to client and rendition of Management Advisory Services (MAS), blatant disregard to accounting standards on auditing, among others. Based on these findings, the following recommendations were made: more stringent sanctions be molted to defaulters, regular review and update of accounting and auditing standards to take care contemporary developments, prohibition of external auditors from rendering multiple MAS, adherence to ethical principles, strengthening of corporate governance structure as well as improved oversight functions by regulatory authorities on the activities of corporate management and auditors.

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