A Study on impact of Forensic Audit towards Investigation and Prevention of Frauds

2021 ◽  
pp. 186-192
Author(s):  
Nandini N S ◽  
Ajay R
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Negative Impact ◽  
Internal Audit ◽  
Descriptive Statistics ◽  
Theoretical Research ◽  
Financial Fraud ◽  
Corporate Failure ◽  
Significant Negative Impact ◽  
Regression Correlation

This study is on impact of forensic audit towards investigation and prevention frauds in any financial performances or corporate companies. The incessant financial Fraud resulting to corporate collapse and the failure of the statutory audit to detect and prevent fraudulent activities which had led to the impoverishment of investors had given rise to need for forensic auditor. In view of the above this paper considers the impacts of forensic auditor on corporate governance. The study was a theoretical research which considered the roles of forensic auditors in combating fraudulent activities, distinction of forensic auditor and statutory auditor, characteristic of forensic auditor and impact of forensic auditor on corporate governance. Data generated were analyzed using charts, graphs, tables and regression. Our findings revealed that forensic audit has a significant negative impact on number of fraud cases, number of staff involved in fraudulent activities and data collected with the sample size of 125 respondents through the well-structured questionnaires from the Auditors, Accountants, Managers, Professional Accountants and Accounting Knowledgeable persons with this data we have used SPSS Methodology to find the Regression, Correlation Coefficient, Descriptive statistics, Reliability test, Anova, Factor analysis. From studies carried out this paper is forensic auditors having improved management accountability, strengthened external auditor’s independence and assisting audit committee members in carrying out their oversight function by providing them assurance on internal audit report have impacted positively to corporate governance, thereby reducing corporate failure and impoverishment of investors.

scholarly journals Relationship between Earning Multiples, Corporate Governance and Earnings Management Practices: An Empirical View with a Mediation Analysis

2019 ◽  
Vol IV (I) ◽  
pp. 387-395
Author(s):  
Syeda Faiza Urooj ◽  
Muhammad Anees Khan ◽  
Muzammal Ilyas Sindhu
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Management Practices ◽  
Negative Impact ◽  
Positive Impact ◽  
Random Effect ◽  
Random Effect Model ◽  
Mediation Process ◽  
New Findings ◽  
Significant Negative Impact

This paper investigated the effect of corporate governance in improving the earnings multiple and reducing the discretionary accruals. This study developed four econometrics models. Random effect model employed for examining the first three econometric models, while for the fourth econometric model study used Andrew F. Hayes mediation process. Results suggest that BOD size, BOD meetings and audit committee size has a significant positive impact on earnings multiples, while earnings multiples have a negative impact on dictionary accrual. Moreover, BOD size and audit committee size has a significant negative impact on dictionary accrual, whereas BOD meetings and employee ownership has a significant positive impact on dictionary accrual. The results further revealed the novel link that earnings multiples partially mediate the relationship between corporate governance variables and dictionary accrual. The new findings provide important insights for all the stakeholders like government, practitioners, academia, researchers, banks, Bursa Malaysia, security commission and public listed companies.

scholarly journals Role of Corporate Governance in Bank’s Efficiency in Pakistan

2020 ◽  
Vol 15 (1) ◽  
pp. 243-258 ◽  
Author(s):  
Saif Ullah
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Banking Sector ◽  
Negative Impact ◽  
Operating Efficiency ◽  
Managerial Ownership ◽  
Significant Negative Impact ◽  
Banking Structure ◽  
Positive Effect

AbstractThe purpose of this research paper is to explore the role of corporate governance of banks (independence of the board, board size, CEO duality, audit committee independence, managerial ownership) to boosting up the bank’s efficiency. The study uses bank size, macro-economic conditions, banking structure and economic freedom as control variables. The sample size of the study is 21 Pakistani banks for the period of 2007-2016 and fixed effect panel regression estimation technique is used for data analysis. The results suggest that corporate governance has a statistically significant negative impact on management efficiency, positive effect on profit efficiency and cost efficiency of the banks. Moreover, the findings show that operating efficiency turned out to have a statistically insignificant relationship with corporate governance. Reforms of corporate governance should be adopted efficiently and effectively to boost the banking sector efficiency.

scholarly journals Pengaruh Audit Internal, Struktur Modal, Dan Good Corporate Governance Terhadap Kinerja Keuangan

2020 ◽  
Vol 2 (1) ◽  
pp. 2001-2019
Author(s):  
Amara Meidiana ◽  
Erinos NR
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Financial Performance ◽  
Sampling Method ◽  
Negative Impact ◽  
Positive Impact ◽  
Stock Exchange ◽  
Internal Audit ◽  
Good Corporate Governance ◽  
Significant Negative Impact

Economic growth according to business field said that financial sector in 2016 to 2018 were decreased year by year. It indicates that there was a financial performance’s decline in financial sector’s companies. In order to increase financial performance, we need to find out factors that could accelerate financial performance’s potential. Internal audit, capital structure, and good corporate governance are independent variables that will be tested in this research for their impacts on financial performance. This research uses ROA, ROE, & NPM combination as internal audit’s proxies and DAR, DER, & LDER as capital structure’s proxies which are still minor in prior researchs. The purpose of this research is to test how far internal audit, capital structure, and good corporate governance could affect financial performance partially. This research was tested on financial sector’s companies that listed on Indonesia Stock Exchange in 2016 to 2018 with 129 samples using purposive sampling method with judgment. The results of this research proved that internal audit had insignificant positive impact on financial performance, capital structure had significant negative impact on financial performance, while good corporate governance had significant positive impact on financial performance with significant level 0,005 which is had not reach the maximum standard 0,05 yet.

The Satyam Effect on Related Party Loans in India

2021 ◽  
pp. 0148558X2110481
Author(s):  
Narendra Nath Kushwaha ◽  
Bipin Kumar Dixit
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Negative Impact ◽  
Related Event ◽  
Public Companies ◽  
External Monitoring ◽  
Significant Negative Impact ◽  
Computer Services ◽  
Using Data ◽  
The Impact

We examine the impact of the failure of Satyam Computer Services Ltd. (“Satyam”), a major corporate governance related event in India, on related party loans of Indian public companies. Using data from a balanced panel of 794 firms for the years 2006–2012, we find that the Satyam failure had a significant negative impact on related party loans given by Indian firms. The average of net related party loans (as a proportion of total assets) declined from 2.37% in 2008 to 0.23% in 2010. Furthermore, the reduction in related party loans was more prominent in firms with lower levels of external monitoring. Finally, since prior research suggests that there was no significant Satyam effect on the frequency or attendance at audit committee meetings, our results suggest that there can be substantive changes in operational decisions without observable changes in governance.

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.

scholarly journals Corruption and corporate governance: a cross-national study

2008 ◽  
Vol 5 (3) ◽  
pp. 299-315
Author(s):  
David Ng ◽  
Kun Qian ◽  
Adam Dix
Keyword(s):  
Corporate Governance ◽  
Standard Deviation ◽  
Negative Impact ◽  
National Study ◽  
Firm Level ◽  
Standard Deviation Increase ◽  
Country Level ◽  
Governance Analysis ◽  
Significant Negative Impact ◽  
Cross National Study

This paper examines the importance of country-level corruption in explaining the variation of firm-level corporate governance. Analysis of firm-level corporate governance data and country level corruption data on over 400 companies in 26 countries confirms the hypothesis that corruption has a statistically significant negative impact on the quality of a firm’s corporate governance. One standard deviation increase in country-level corruption is associated with a 0.5 to 0.7 standard deviation decrease in firm-level corporate governance scores

scholarly journals A versenyképesség és a társaságok belső ellenőrzése (Competitiveness and corporate internal audit)

2012 ◽  
pp. 19-33
Author(s):  
Mária Bordáné Rabóczki
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Supervisory Board ◽  
Internal Audit ◽  
Senior Management ◽  
Internal Auditors ◽  
Mutual Dependency ◽  
Internal Audit Function ◽  
External Auditor ◽  
The Impact

A cikk a belső ellenőrzésnek a hatékony társaságirányításhoz való hozzájárulását és ennek a versenyképességre gyakorolt hatását vizsgálja. A belső ellenőrzés és a társaságirányítás kölcsönös összefüggésben áll egymással. Nemcsak a belső ellenőrzés hat a társaságirányításra, hanem a releváns társaságirányítási struktúrák, emberi kapcsolatok és magatartásformák jelentős hatást gyakorolnak a belső ellenőrzés színvonalára és hatékonyságára. A cikk ezért különös figyelmet szentel a belső ellenőröknek az igazgatósággal, az auditbizottsággal/felügyelőbizottsággal, a menedzsmenttel és a könyvvizsgálóval való kapcsolatainak vizsgálatára. Rávilágít a belső ellenőrzés legfőbb funkciójára, amely objektív bizonyosságot nyújt az igazgatóság és a felső vezetők számára a kockázatok azonosítására, kezelésére és elfogadható szintre történő csökkentésére szolgáló kontrollfolyamatok megfelelőségéről és hatékonyságáról. A bemutatott belső ellenőrzési modell azt a szemléletet közvetíti, hogy a belső ellenőrzés által nyújtott objektív bizonyosság megszerzése nemcsak a jogszabályoknak vagy az ajánlásoknak való megfelelés, hanem a társaságok versenyképessége szempontjából is kiemelkedő jelentőségű. _________ The purpose of this paper is to consider the contribution of internal audit to the sound corporate governance and the impact of that on the competitiveness of the companies. There is a mutual dependency between internal audit and corporate governance. Not only the internal audit has impact on the corporate governance but the relevant governance structures, relationships and behaviour influence the level and effectiveness of the internal audit. Therefore the present paper is highly concerned with the internal auditors` relationships with the board, audit committee/supervisory board, senior management and the external auditor. It highlights the internal audit function, that provides objective assurance to the board and senior management about the adequacy and effectiveness of the processes by which risks are identified, managed, controlled and mitigated to acceptable levels. The internal audit model demonstrated represents an approach, according to that getting objective assurance provided by internal audit is important not only to be in line with laws and recommendations but to facilitate the corporate competitiveness.

scholarly journals Corporate Governance and Performance of Audit Committee and Internal Audit Functions in an Emerging Economy’s Public Sector

2020 ◽  
Vol 13 (1) ◽  
pp. 85-98
Author(s):  
Shewangu Dzomira
Keyword(s):  
Corporate Governance ◽  
Public Sector ◽  
Audit Committee ◽  
Qualitative Content Analysis ◽  
Internal Audit ◽  
Audit Committees ◽  
The Public ◽  
Effective Performance ◽  
And Performance ◽  
Management Audit

This article seeks to examine corporate governance and the performance of audit committee and internal audit functions in an emerging economy’s public sector. These two functions form a part of imperative corporate governance aspects, and their effective performance ensures better service delivery by public sector agencies. The study is premised on stakeholder theory, which has turned out to be the central point of public sector discourses. The study is based on qualitative content analysis, which aspires to present information about corporate governance and effectiveness of audit committees and internal audit units in South Africa’s public sector. The findings suggest that there is good corporate governance in terms of the existence of audit committees and internal audit functions in the public sector. However, the results suggest that the audit committees and internal audit units in South Africa’s public sector are not effective. Absence of advice, implementation of recommendations and inadequacy of resources have undermined the performance of audit committees and internal audit units in South Africa’s public sector. The leadership and other assurance bringers ought to consider the findings elevated by the audit committees and internal audit and execute their commendation. Their findings should be urbanised into action plans that are implemented by management. Audit committees must improve their oversight on internal audit functions so that both units would effectively perform. The subsistence of successful audit committee and internal audit components in the public sector certifies proficient and effectual exploitation of resources for the gain of all stakeholders.

Influence of internal audit reporting line and implementing internal audit recommendations on financial reporting quality

2019 ◽  
Vol 28 (1) ◽  
pp. 26-50 ◽  
Author(s):  
Abdulaziz Alzeban
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Negative Impact ◽  
Empirical Work ◽  
Internal Audit ◽  
Reporting Quality ◽  
Positive Influence ◽  
Financial Reporting Quality ◽  
Annual Reports ◽  
Content Type

Purpose This study aims to explore the influence of internal audit (IA) reporting lines and the implementation of IA recommendations (IMPLEMENT) on financial reporting quality (FRQ). Design/methodology/approach Data were obtained from the annual reports of 201 UK listed companies, and also from survey questionnaires completed by the chief audit executives working within those companies. Two measures are used as proxies of FRQ: abnormal accruals and accrual quality. Findings Findings indicate that when IA reports directly to the audit committee (AC), there is a significant positive influence upon FRQ. Conversely, when IA reports to the chief executive officer (CEO) or chief financial officer (CFO), there is a negative impact on FRQ. It is further shown by the results that lower income-increasing accruals are evident when there is greater IMPLEMENT, thereby showing an accompanying positive influence on FRQ. Moreover, the results indicate that greater adoption of such recommendations is also associated with internal reporting lines, i.e. when IA reports directly to the AC, FRQ results improved. Originality/value These findings contribute to the literature in the field of IA reporting, by introducing new insights regarding reporting lines and IMPLEMENT, and the influence of these on FRQ, and by establishing those insights through empirical work undertaken in the UK where little research on this issue has been reported.

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