The Effects of Internal Audit, Audit Committee and Firm Characteristics on Audit Fees in a Multi-Country and Industry Setting

This paper examines the association between audit fees and attributes of internal audit (IA), audit committee (AC), as measured by independence and financial expertise, as well as characteristics of the firm. The determinants of audit fees have been extensively investigated in the prior literature, but the results are conflicting. We develop a comprehensive model from a multi-country and multi-industry perspective. A total of 3,136 companies covering a period of 10 years (2011-2020) with 15,247 observations from 55 countries were included in this study. We found that the most critical variables that have a significant positive effect on the audit fees are client size, leverage (risk), profitability, complexity, losses, AC independence, AC expertise and auditor size. The study also shows that audit pricing is significantly negatively related to foreign operations, auditor tenure, and internal audit independence. The results highlight variables that affect audit fees across a range of countries/industries.

Democracy, accountability and audit: the creation of the UK NAO as a defence of liberty

PurposeThe study focusses on explaining why advocates for reform to state audit in the United Kingdom (UK) in the early 1980s, focussed on improving the links between the new National Audit Office (NAO) and Parliament, rather than on traditional notions of audit independence. The study shows how this focus on the auditor's link to Parliament depends on a particular concept of liberty and relates this to the wider literature on the place of audit in democratic society.Design/methodology/approachUnderstanding the issue of independence of audit in protecting the liberties and rights of citizens needs addressed. In this article, the authors investigate the creation of audit independence in the UK in the National Audit Act (1983). To do so, the authors employ a neo-Roman concept of liberty to historical archives ranging from the late 1960s to 1983.FindingsThe study shows that advocates for audit reform in the UK from the 1960s to the 1980s were arguing for an extension to Parliament's power to hold the executive to account and that their focus was influential on the way that the new NAO was established. Using a neo-Roman concept of liberty, the authors show that they believed Parliamentary surveillance of the executive was necessary to secure liberty within the UK.Research limitations/implicationsThe neo-Roman republican concept of liberty extends previous studies in considering the importance of audit for public accountability, the preservation of liberty and democracy.Practical implicationsPublic sector audit can be a fundamentally democratic activity. Auditors should be alert to the constitutional importance of their work and see parliamentary accountability as a key objective.Originality/valueThe neo-Roman concept of liberty extends previous studies in considering the importance of audit for public accountability, preservation of liberty and democracy.

Audit Committee Impact on Corporate Profitability in Oman Companies: an Auditing and Management Accounting Perspective

This work investigates the impact of audit committees’ features as predictor variables of corporate profitability with a sample of firms belong to non-financial sector in Muscat Securities Market (MSM). This work analyzed cross sectional data for 60 non-financial firms. It used annual reports for the year of 2019 to analyze the impact of audit committees’ features on corporate profitability. The present work tested its hypotheses and utilized its variables via utilizing the Smart-PLS for data analysis. The findings revealed that a positive association between all the predictors and dependent variables are exist among the whole variables; audit committee, audit Independence, meeting of audit committee, and corporate profitability measured by management accounting’s indicators represented by ROA and ROE. This work is a new in its kind to be applied in Oman context via examining the relation between its predictors of audit committees’ features towards their impact on corporate profitability. The current study presents a theoretical and practical implications as a contribution relevant to practitioners working and academics in areas related to corporate profitability. In that, it furnishes empirical evidence for the policymakers, researchers and other interested parties.