scholarly journals TRANSPARENCY OF INFORMATION – IMPORTANT MANAGEMENT INSTRUMENT IN ENSURING PERFORMANCE AND DEVELOPMENT OF CORPORATE GOVERNANCE

Akademos ◽  
2021 ◽  
Vol 60 (1) ◽  
pp. 68-76
Author(s):  
Aliona Birca ◽  
◽  
Liliana Lazari ◽  
Keyword(s):  
Corporate Governance ◽  
Performance Appraisal ◽  
Internal Control ◽  
Internal Audit ◽  
Decision Making Process ◽  
Appraisal System ◽  
Remuneration Policy ◽  
The Cost ◽  
Governance Risk

The degree of transparency of an entity is assessed according to the entity’s policies, control environment and access conditions of the various categories of stakeholders. Modern corporate governance determines the entity to adapt to the new market conditions, promoting a sustainable evolution in conditions of maximum transparency. In ensuring sustainable development, management must model its resources in such a way that the cost does not exceed the price and, at the same time, give credibility to stakeholders that the entity will reap long-term benefits. Performance means the most appropriate tools for translating financial and non-financial information into the entity’s successful language in a sustainable way. Promoting transparency in the decision-making process involves placing on the entity’s website information on the structure of corporate governance, risk management, internal audit and internal control, the company’s remuneration policy, the performance appraisal system and the budgetary system.

The Role of Accounting Mechanisms for Corporate Governance in Reducing Creative Accounting Practices in Telecommunications Sector Companies in Riyadh City: An Empirical Study: دور الآليات المحاسبية لحوكمة الشركات في الحد من ممارسات المحاسبة الإبداعية في شركات قطاع الاتصالات بمدينة الرياض: دراسة ميدانية

2020 ◽  
Vol 4 (15) ◽  
Author(s):  
Lamis Jameel Banasser, Maha Faisal Alsayegh
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Audit Committee ◽  
Internal Audit ◽  
Internal Auditors ◽  
External Auditors ◽  
Riyadh City ◽  
Creative Accounting ◽  
Telecommunications Sector

The study aimed to identify the role of accounting mechanisms for corporate governance in reducing creative accounting practices in telecommunications sector companies in Riyadh city. A descriptive analytical approach was followed to conduct the field study. Sample of the study consisted of members of the audit committee, internal auditors, accountants from the surveyed telecommunications’ sector companies, and the external auditors in the audit offices that specialized on auditing the examined sample of companies. Questionnaire was used as a data collection method. Results showed that activating the role of accounting mechanisms for corporate governance can greatly contribute in limiting creative accounting practices. As they are controlling mechanisms that capable of protecting companies, shareholders and stakeholders from any manipulation or misleading information in the financial statements. Further, internal audit plays a major role in limiting creative accounting practices by examining and evaluating the effectiveness of the internal control system. Furthermore, the independence and competence of the external auditor and his commitment to the rules of conduct and ethics of the profession contribute greatly in limiting creative accounting practices in the examined companies. The study recommended the necessity of holding specialized training courses for members of audit committees, internal auditors and external auditors on methods of detecting creative accounting practices to combat and reduce them.

The German Supervisory Board on its Way to Professionalism

2010 ◽  
Vol 11 (2) ◽  
pp. 115-158 ◽  
Author(s):  
Jan Lieder
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Supervisory Board ◽  
Decision Making Process ◽  
European Level ◽  
Governance System ◽  
Management Board ◽  
Corporate Governance System ◽  
Flow Of Information ◽  
Board System

The paper shows how the efficiency of the German supervisory board has been significantly improved in the last decade. These legal changes made the supervisory board climb to a higher position of power. In particular, the supervisory board is now significantly involved in the decision-making process on a company's overall strategic concept and on management decisions of fundamental importance. This emphasizes the future-oriented monitoring obligation of the supervisory board, which gained much more importance in the last decade. Furthermore, the new provisions increased the flow of information from the management board to the supervisory board, and they facilitated the monitoring efficiency of every single supervisory board member. In addition, several important changes improved the cooperation of supervisory board and auditors. The most recent changes strengthened the supervisory board's responsibility with regard to internal control and risk management.The vest majority of those changes in the German supervisory board system are very welcome. However, the current regime of German codetermination as well as the excessive size of the supervisory board has to be changed. Under the important developments on the European level, the time has come to act now in this direction. The advocated concept of codetermination by consensus provides a solid basis for more flexibility in the rigid German corporate governance system. It is also desirable to further limit the size of the supervisory board to no more than twelve members. Finally, the efficiency of the corporate governance system would be improved by allowing enterprises to choose between a one-tier and a two-tier board system.

scholarly journals Factors affecting the voluntary use of internal audit: evidence from the UK

2018 ◽  
Vol 33 (3) ◽  
pp. 288-317 ◽  
Author(s):  
Hazem Ramadan Ismael ◽  
Clare Roberts
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Internal Control ◽  
Audit Committee ◽  
Internal Audit ◽  
Theoretical Framework ◽  
Policy Implications ◽  
Content Type ◽  
Factors Affecting ◽  
The Uk

Purpose This study aims to identify the factors that lead non-financial companies listed in the UK to use an internal audit function (IAF) as a monitoring mechanism. Although the use of an IAF in the UK is voluntary, no prior research has examined the drivers for using one. Design/methodology/approach Financial and non-financial data were collected from the annual reports of 332 UK non-financial companies listed on the London Stock Exchange (LSE) Main Market. Univariate tests and multivariate logistic regression tests were used to test the research hypotheses. A theoretical framework based on both agency theory and transaction cost economics (TCE) theory was used to explain the economic factors affecting the use of an IAF. Findings The study provides evidence that firm size, level of internal risks, agency problem between owners and managers and existence of an effective audit committee are associated with the existence of an IAF. Thus, the need to have strong internal control and risk management systems and to reduce both internal and external agency costs drives companies to have an IAF. These results suggest the importance of IAF as an internal corporate governance tool and the effectiveness of UK governance regulations in monitoring the effectiveness of internal control systems. Practical implications Given the importance of the IAF’s corporate governance role, the study provides some policy implications. Regulators should pay more attention to the issue of maintaining an IAF, especially by large companies, the relationship between the IAF and other governance parties, especially the audit committee, and the disclosure of more relevant information about the IAF’s characteristics and practices. Originality/value This is the first study to examine the factors affecting the existence of the IAF within the UK’s distinctive regulatory approach of “comply or disclose reasons”. Furthermore, it provides a theoretical framework that explains how both the agency theory and TCE theory can interpret the adoption of internal audit.

Can internal audit functions improve firm operational efficiency? Evidence from China

2020 ◽  
Vol 35 (8) ◽  
pp. 1167-1188
Author(s):  
Ying Chen ◽  
Bin Lin ◽  
Lizhen Lu ◽  
Gaoguang Zhou
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Internal Audit ◽  
Operational Efficiency ◽  
Alternative Measure ◽  
Maturity Model ◽  
Firm Level ◽  
Content Type ◽  
Internal Auditors ◽  
The Relationship

Purpose The purpose of this study is to examine the effects of internal audit function (IAF) quality on the operational efficiency of Chinese firms. Design/methodology/approach The authors use regression models with a sample of Chinese listed companies to test their research hypotheses. Findings The authors find that IAF quality is positively associated with firm operational efficiency. The result is unchanged after correcting for endogeneity via the instrumental variable method and using an alternative measure of firm operational efficiency. The authors show that IAF competence improves firm operational efficiency, but the relationship between IAF independence and firm operational efficiency is insignificant. Additionally, they find that IAF quality can only significantly improve firm operational efficiency in the presence of effective corporate governance at the firm level and strong institutions at the province level. Using path analysis, the authors find that an IAF can improve firm operational efficiency directly or indirectly by promoting firm internal control quality. Practical implications The findings of this study suggest the need for a balance between IAF competence and independence to achieve the goals of IAF. Additionally, the authors study suggests that the effectiveness of IAF is contingent on corporate governance and market-based institutions. Originality/value The study’s findings contribute to the burgeoning literature on the relationship between IAF and firm operational performance and deepen the authors’ understanding of the role of IAF in an emerging economy whose government plays a major role in promoting and enforcing internal audits. The study also empirically support the Internal Audit Governance Maturity Model proposed by the Institute of Internal Auditors.

scholarly journals Corporate governance characteristics of firms reporting internal control deficiencies

2011 ◽  
Vol 8 (2) ◽  
pp. 363-390
Author(s):  
Kathleen Rupley
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Audit Committee ◽  
Internal Audit ◽  
High Growth ◽  
Audit Committees ◽  
Market Reactions ◽  
Sarbanes Oxley ◽  
Internal Control Deficiencies ◽  
Nominating Committees

From a sample of firms reporting internal control deficiencies (ICD), I compare corporate governance structures to industry, exchange, and size – matched firms. I examine market reactions to reports of ICDs in 8-K filings. Additionally, I examine shifts in corporate governance characteristics since the Sarbanes-Oxley Act of 2002 (SOX). Results indicate that weaker boards, larger audit committees, less independent nominating committees, and high growth companies are associated with ICDs. Market reaction is negative to ICD disclosures when they are associated with controls over revenue. Firms have made changes post-SOX including reduced non-audit services, more frequent audit committee meetings, formation of nominating and governance committees, creation of internal audit functions, and implementation of corporate governance policies.

scholarly journals The concept and the appearance of internal audit committees

2018 ◽  
Vol 27 (2018) ◽  
pp. 111-114
Author(s):  
Cristian Dragan
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Boards Of Directors ◽  
Audit Committee ◽  
Internal Audit ◽  
Audit Committees ◽  
External Audit ◽  
General Management ◽  
Proper Functioning

The Audit Committee is a concept of Corporate Governance, whose main concerns are focused on organizing and ensuring the proper functioning of internal control, internal audit, and its relationship with external audit. Audit committees have emerged from the need to send recommendations to the general management or board, to understand them and provide needed assistance for their implementation. For these reasons, the boards of directors thoroughly oversee the qualifications of committee members, their autonomy towards managers, the information they receive from auditors, and what they report.

scholarly journals Performance Appraisal Decision and Cognitive Processing Model: A Case of Novice and Expert Raters in the Educational Organization

2020 ◽  
Author(s):  
Rusli Ahmad ◽  
Azman Ismail ◽  
Mohamad Madi Abdullah
Keyword(s):  
Decision Making ◽  
Performance Appraisal ◽  
Cognitive Processing ◽  
Cognitive Mapping ◽  
School Administrators ◽  
Relevant Information ◽  
The Body ◽  
Decision Making Process ◽  
Appraisal System ◽  
New Perspective

This paper explores rater (novice and expert) understanding of the decision-making process in the performance appraisal system (PAS) by looking at the cognitive processing model (CPM). Interviews were conducted using a semi-structured cognitive mapping protocol involving 22 Malaysian public school administrators and were analysed using key word analysis. The decision explorer software was used to map the thinking activities involved in the rater decision-making process. The findings revealed that raters recognised the CPM steps in their performance appraisal practice. The study also identified the differences between individual novice and expert raters’ CPM in terms of concept and complexity, and also an attempt was made to compare the CPM practised by the raters with that suggested in the research framework. Every cognitive map by the raters has its own uniqueness and represents raters capability to process relevant information involved during the performance appraisal decision-making process. This paper contributes to the body of knowledge by offering a new perspective to understanding performance rating by looking at the steps involved in CPM. The research also offered some insights to policy makers, practitioners, researchers, and scholars in order to undertake further research and analysis using the steps in the CPM in a new issue, context, and environment.  

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