scholarly journals Assessment of Internal Auditing Position in the Private Sector in Nigeria: An Applied Study

2019 ◽  
Vol 3 (3) ◽  
pp. 4-13
Author(s):  
Abdulkadir Madawaki ◽  
Aidi Ahmi ◽  
Halimah @ Nasibah Ahmad
Keyword(s):  
Private Sector ◽  
Internal Control ◽  
Stock Exchange ◽  
Internal Audit ◽  
Essential Elements ◽  
Future Research ◽  
Internal Auditing ◽  
Public Attention ◽  
Internal Auditors ◽  
External Auditors

The significance of quality internal auditing has received serious attention in both regulatory and public attention in recent years. Essential elements of organisation internal auditing are competency, independence, quality of work performed, risk-based internal audit, internal control activities and coordination between internal and external auditors. The objective of this study is to examine the position of these quality attributes of IA in the Nigerian private sector following the recent regulatory changes. The survey questionnaire was personally administered on internal auditors using a sample of ninety-seven organisations listed on the Nigerian Stock Exchange (NSE) to collect information for the period December 2018 to July 2019. The findings show that all the variables are free from multicollinearity and the results of the descriptive statistics of mean and standard deviations provide that all the respondents seem to agree with the statements regarding the variables. Finally, the paper provided limitation of the study and direction for future research.

scholarly journals The Effects of Interaction between Internal Auditor and Audit Committee on Fraud Detection in Malaysia

2018 ◽  
Vol 7 (4.38) ◽  
pp. 1338
Author(s):  
Sunita Lylia Hamdan ◽  
Nahariah Jaffar ◽  
Ruzanna Ab Razak
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Audit Committee ◽  
Specific Interaction ◽  
Fraud Detection ◽  
Internal Audit ◽  
Internal Auditing ◽  
Internal Auditor ◽  
Internal Auditors ◽  
External Auditors

This study aims to examine the effect of interaction between internal auditor and audit committee on fraud detection in Malaysia.  Specific interaction is firstly; audit committee approving the appointment of chief audit executive, the evaluation of chief audit executive, the dismissal of chief audit executive, the internal audit budget and the internal audit plan or program.  Secondly, audit committee’s involvement in reviewing internal auditor’s work specifically; providing input for the internal audit plan, reviewing the results of internal auditing related to financial reporting, reviewing the results of internal auditing related to internal control, reviewing the results of internal auditing related to compliance with laws and regulation, reviewing the internal audit involvement in management responses to internal audit suggestions, reviewing the difficulties or scope restrictions encountered by internal auditors and reviewing the coordination between internal auditors and external auditors.  Survey questionnaires were mailed to internal auditors attached to 782 companies listed on Bursa Malaysia’s main market. The results of this study suggest that involvement of audit committee in approving chief audit executives’ matters is insignificant on internal auditors’ contribution to fraud detection.  However, audit committee’s involvement in reviewing internal auditors’ work significantly influence the internal auditors’ contribution in fraud detection.       

External Auditors' Involvement in the Internal Audit Function's Work Plan and Subsequent Reliance Before and After a Negative Audit Discovery

2016 ◽  
Vol 35 (4) ◽  
pp. 159-173 ◽  
Author(s):  
Byron J. Pike ◽  
Lawrence Chui ◽  
Kasey A. Martin ◽  
Renee M. Olvera
Keyword(s):  
Internal Control ◽  
Internal Audit ◽  
Internal Controls ◽  
Professional Standards ◽  
Data Availability ◽  
Internal Auditors ◽  
External Auditors ◽  
Internal Audit Function ◽  
Anchoring Bias ◽  
Before And After

SUMMARY To reduce redundancies and increase efficiency in the evaluation of internal controls (PCAOB 2007, 402–403), professional standards encourage coordination between external auditors and their clients' internal audit function (IAF). Recent surveys of internal auditors find that a component of this coordination is external auditors' involvement in developing the IAF's audit plans. Nevertheless, it is not known how such involvement affects external auditors' reliance on the internal control test work of the IAF, either before or after a negative audit discovery. Based on an experiment with 107 experienced auditors, we find that external auditors involved in the development of the IAF's audit plan perceive the IAF as more objective and that both objectivity and involvement contribute to these auditors' placing more reliance on the IAF as compared to external auditors with no involvement. This initial reliance results in the involved auditors' proposing reductions to the audit budget and re-performing less of the IAF's work. Consistent with an anchoring bias, we find that involvement leads to external auditors' continuing to place greater reliance on the IAF's work, even after they become aware of a negative audit discovery that should not have occurred had the client's controls been effective. Data Availability: Data are available from the authors on request.

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.

Internal Auditing in India and China: Some Empirical Evidence and Issues for Research

2018 ◽  
Vol 34 (4) ◽  
pp. 511-523 ◽  
Author(s):  
R. Narayanaswamy ◽  
K. Raghunandan ◽  
Dasaratha V. Rama
Keyword(s):  
Empirical Evidence ◽  
Emerging Economies ◽  
Internal Audit ◽  
The United States ◽  
Future Research ◽  
Internal Auditing ◽  
Internal Auditors ◽  
Internal Audit Function ◽  
India And China

Internal auditing is an important element in the corporate governance framework. Yet, research related to internal auditing, particularly in emerging economies like India and China, is sparse. We use data from responses provided by chief audit executives to provide empirical evidence about the extent of support for internal auditing and the determinants of such support in India and China, and compare the data with those from the United States. We find that such support is negatively related to pressure on internal auditors to suppress or alter their findings. We also provide descriptive evidence about the work and staffing of the internal audit function. We discuss the role of internal auditing in India and identify some possible avenues for future research.

scholarly journals The importance of considering internal audit as a decision-making by top-management of an agricultural company

2020 ◽  
Vol 6 (3) ◽  
pp. 123-136
Author(s):  
Miloš Jokić
Keyword(s):  
Decision Making ◽  
Internal Control ◽  
Internal Audit ◽  
International Standards ◽  
Top Management ◽  
Internal Auditing ◽  
Internal Auditors ◽  
Agricultural Enterprises ◽  
Agricultural Enterprise ◽  
Valid Information

The top management's decision-making in an agricultural enterprise should be based on valid information gathered within the enterprise itself. Collecting timely business information is done daily by all sectors of the enterprise. Merely improving the security of information gathering and the safety of all parts of the enterprise is a task performed by trained internal control and internal audit personnel in the company, appointed by top management. In performing their duties on a regular basis, internal auditors should apply procedures and methodologies that are consistent with International Standards on the Professional Practice of Internal Auditing in their work. The aim of the paper is to emphasize the importance of implementing the adopted methodology of work of internal auditors in agricultural companies. The author points out those standards that are in line with best audit practice should be applied in internal audit work. The contribution of the study authors is to emphasize the importance of applying the internal audit profession in the regular operation of agricultural enterprises, which is in line with the general objective of improving the regular business operation.

Attracting Applicants for In-House and Outsourced Internal Audit Positions: Views from External Auditors

2015 ◽  
Vol 30 (1) ◽  
pp. 143-156 ◽  
Author(s):  
Geoffrey D. Bartlett ◽  
Joleen Kremin ◽  
K. Kelli Saunders ◽  
David A. Wood
Keyword(s):  
Critical Role ◽  
Internal Audit ◽  
Job Applicants ◽  
Internal Auditing ◽  
Internal Auditors ◽  
External Auditors ◽  
Internal Audit Function ◽  
Career Option ◽  
Negative Perceptions ◽  
Survey Results

SYNOPSIS While the internal audit function (IAF) plays a critical role in organizations, it faces challenges in finding sufficient numbers of high-quality job applicants to fill its ranks. The results of two experiments suggest that practicing external auditors are twice as likely to apply for positions that are labeled as accounting positions rather than either in-house or outsourced internal audit positions. The results also suggest that external auditors have negative perceptions of the profession and work environment of internal auditors—especially in-house internal auditors relative to outsourced internal auditors—and are more likely to recommend that mediocre rather than top students apply to work in internal auditing. We also provide survey results from experienced external auditors about aspects of internal auditing that may be improved to make it a more attractive career option. Taken together, the results suggest internal auditing faces significant hiring challenges, but also offer ways to mitigate these challenges.

scholarly journals Evidence of internal auditing in Italian listed companies

2016 ◽  
Vol 13 (3) ◽  
pp. 256-265
Author(s):  
Maurizio Rija ◽  
Paolo Tenuta
Keyword(s):  
Internal Control ◽  
Stock Exchange ◽  
Code Of Conduct ◽  
Internal Audit ◽  
Internal Auditing ◽  
The Third ◽  
Organizational Position ◽  
Operating Environments ◽  
Almost All ◽  
Audit Activity

This paper aims to provide an overview of how internal auditing has been adopted by companies listed in the STAR segment of the Italian Stock Exchange, and of the choice on its organizational position. After a review of the existing literature, the research aims to analyze the information emerging from corporate governance reports in 2015, in reference to the year 2014, which the companies prepare as part of information provided annually to the market. The sample for analysis is the group of companies (n. 71) belonging to the FTSE ITALY STAR Italian Stock Exchange.The research has shown, as the first element in the survey, that nearly all of the companies have created a dedicated function or outsourced the internal audit activity. The second major finding from the analysis is that in most companies the function depends hierarchically on the board. The third point analysed concerns the figure of responsible for Internal Auditing, as established by the Code of Conduct, it replaces the person responsible for internal control and risk management. The analysis showed that almost all the companies have attributed the tasks and responsibilities of the person responsible for internal control to the Head of the Internal Audit Department, due to the coincidence of the operating environments of the two figures and the strong synergies between the two roles. The last point analyzed covers the case where the internal auditing department is decentralized or, on the contrary, remains within the company. The results showed a substantial range of companies chose not to outsource the function

Interaction between internal and external auditors – insights from a developing country

2019 ◽  
Vol 27 (6) ◽  
pp. 840-861
Author(s):  
Grace Mubako ◽  
Susan Charowedza Muzorewa
Keyword(s):  
Developing Country ◽  
Online Survey ◽  
Internal Audit ◽  
Future Research ◽  
Content Type ◽  
Internal Auditors ◽  
External Auditors ◽  
The Relationship ◽  
E Mail ◽  
African Setting

Purpose The purpose of this study is to examine the nature and extent of interaction and the relationship between internal auditors (IAs) and external auditors (EAs) from the perspective of the IAs in a developing country, Zimbabwe. Design/methodology/approach This study was carried out by soliciting the opinions of chief audit executives (CAEs) in Zimbabwe through an online survey that was distributed via e-mail. Findings The study finds that the interaction between the IAs and EAs is limited and that EAs may not be making full use of the internal audit function (IAF). Findings also suggest that the relationship between the auditors is, in some instances, strained and that the actions of management do not always facilitate the fostering of a good, productive relationship between the auditors. Originality/value Results of this study contribute to the understanding of the nature and extent of interaction between the IAF and EAs in an African setting. The study also solicits qualitative data about the relationship between IAs and EAs where previous research has largely focused on objective measures, failing to take into account factors such as attitudes and biases, which can affect this relationship. Finally, the results of this study bring to light important, previously under-explored issues, which provide opportunities for future research.

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 Internal Audit Function Quality and Contribution on Audit Delay

2014 ◽  
Vol 34 (1) ◽  
pp. 25-58 ◽  
Author(s):  
Mina Pizzini ◽  
Shu Lin ◽  
Douglas E. Ziegenfuss
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
House Of Representatives ◽  
Internal Audit ◽  
Financial Statement ◽  
Internal Auditors ◽  
External Auditors ◽  
Sarbanes Oxley ◽  
The Impact ◽  
Relevant Work

SUMMARY The number of days required to complete financial statement audits (i.e., audit delay) increased significantly with the implementation of Section 404 of the Sarbanes-Oxley Act (SOX, U.S. House of Representatives 2002). As firms' in-house experts on internal control, Internal Audit Functions (IAFs) can substantially affect financial reporting processes and, thus, audit delay. Internal auditors can help management maintain strong internal controls and assist external auditors with financial statement audits. Accordingly, we investigate whether IAF quality and the IAF's contribution to financial statement audits affect audit delay in a sample of 292 firm-year observations drawn from the pre-SOX 404 period. Using survey data from the Institute of Internal Auditors (IIA), we develop a comprehensive proxy for IAF quality; we measure different aspects of IAF quality (e.g., competence, objectivity, fieldwork rigor); and we measure the nature of the IAF's contribution to financial statement audits (independently performed work and direct assistance). Results indicate audit delay is decreasing in IAF quality, and this decrease is driven by IAF competence and fieldwork quality. Delay is four days shorter when IAFs contribute to external audits by independently performing relevant work. High-quality IAFs contribute to financial statement audits by independently performing relevant work, while low-quality IAFs provide direct assistance.

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