The auditing profession and the key audit matter reporting requirement

Purpose This study aims to examine the setting of International Standards on Auditing (ISA) 701 on disclosing key audit matters (KAMs) to explore the role of standard setting in maintaining or reconstituting the relationship of the auditing profession with preparers and users of financial reports. Design/methodology/approach This study draws on concepts from the sociology of the professions literature and the regulatory space metaphor. Data comprises comment letters and other documents pertaining to the setting of ISA 701. Findings The study shows that the KAM reporting requirement is part of the ongoing re-calibration of the regulatory arrangements governing auditing, which started in the early 2000s. This study interprets standard setting as a site for negotiating the relationships between linked ecologies in the audit regulatory space, namely, the auditing profession, preparers of financial statements and users of audited reports. This study identifies three processes involved in setting ISA 701, namely, reconstitution of the rules governing auditors’ reports as a link between the three ecologies, preserving boundaries between the auditing profession and preparers and negotiation aimed at balancing competing interests of the interrelated ecologies. Originality/value The study offers insights into the role of regulatory rule setting as a central medium through which the adaptive relationship of the profession with its environment is negotiated.

The adoption of integrated reporting by state-owned enterprises (SOEs) – an international comparison

Purpose This paper aims to establish the extent to which South African state-owned entities (SOEs), where integrated reporting is a quasi-mandatory reporting requirement, have incorporated the principles of the international integrated reporting framework. These identified South African SOE reporting practices are compared with the ‘integrated reporting’ related disclosures of SOEs in selected countries, where integrated reporting remains voluntary. Design/methodology/approach This paper deploys a qualitative research approach, to thematically analyse the content of publicly available annual or integrated reports of South Africa SOEs, as the primary country of analysis, with those of their counterparts in five purposively selected countries. The relative scores for the SOEs of each country is calculated using a disclosure index derived from the international integrated reporting framework principles. Findings The paper found that despite being a quasi-mandatory reporting requirement, not all South African SOEs complied with all the international integrated reporting framework principles. Accepting the assertion that integrated reporting enhances organisational transparency and accountability, the accountability disclosure practices of South African SOEs appear more comprehensive than their counterparts in other countries. Originality/value Extant research into integrated reporting has primarily focussed on the profit-seeking private sector, with limited research into its applicability in the public sector. This paper attempts to address this paucity by examining aspects of integrated reporting by South African SOEs, which are then compared to accountability reporting practices in other countries.

Automated Extraction and Time-Cost Prediction of Contractual Reporting Requirements in Construction Using Natural Language Processing and Simulation

Due to a lack of suitable methods, extraction of reporting requirements from lengthy construction contracts is often completed manually. Because of this, the time and costs associated with completing reporting requirements are often informally approximated, resulting in underestimations. Without a clear understanding of requirements, contractors are prevented from implementing improvements to reporting workflows prior to project execution. This study developed an automated reporting requirement identification and time–cost prediction framework to overcome this challenge. Reporting requirements are extracted using Natural Language Processing (NLP) and Machine Learning (ML), and stochastic simulations are used to predict overhead costs and durations associated with report preparation. Functionality and validity of the framework were demonstrated using real contracts, and an accuracy of over 95% was observed. This framework provides a tool to rapidly and efficiently retrieve requirements and quantify the time and costs associated with reporting, in turn providing necessary insights to streamline reporting workflows.

Audit Fees Determinants: A Study on the Impact of Key Audit Matters Reporting and other Factors

Knowledge is now an essential source of competitive advantage. Itenhanceseconomic growth and increasescorporate value. In the field of auditing, authority was aware of the need for improved reporting and thus has issued a brand newstandard related to auditor's report.While the new report is expected to enhanceaudit reporting and improve the quality of audit, the move may also increasethe audit costs as auditorsnow needto expandtheir efforts. We analyzed 261 companies listed on Bursa Malaysia and the results indicate that the requirement to improve auditor's communication through enhanced reporting does not influence audit fees. Instead, the study suggests that the company size, poor financial performance and liquidity issue are key determinants of audit fees. The two world's largest audit firms, i.e., PWC and KPMG, are found to charge higher fees than others, possibly for the brand name. This study informs regulators of the influence of the new requirement on audit output costs.It also offers insight into the main drivers for audit pricing following the current reporting requirement.

Article 51’s Reporting Requirement as a Space for Legal Argument and Factfulness

Uncertainties continue to exist as regards the function, contents, and application of the proportionality principle in the context of the right to self-defense. Similarly, it has been suggested that the principle of necessity gains new meaning in the context of non-state actor self-defense as it provides the basis for an unwilling/unable test, but this test remains disputed. While appreciating the wealth of scholarly writings on these ad bellum principles, this chapter aims to reflect on how states can be pulled into the conversation more clearly with a view to clarifying the law. It explores how more space can be created for legal argument and factfulness in use of force discourse by states. Specifically, the chapter seeks to enhance necessity and proportionality discourse through the strengthening of U.N. Security Council reporting structures. Building on ideas to “proceduralize Article 51,” the chapter suggests the development of reporting requirements for any use of force on the basis of a duty to explain. It also proposes a more comprehensive architectural rethinking of the institutional environment in which adherence to and application of the necessity and proportionality principles are tested and contested.

Surgical Site Infection Trend Analysis Following Abdominal Hysterectomy, National Healthcare Safety Network, 2009–2018

Background: Surveillance data for surgical site infections (SSIs) following abdominal hysterectomy (HYST) have been reported to the CDC NHSN since 2005. Beginning in 2012, HYST SSI surveillance coverage expanded substantially as a result of a CMS mandatory reporting requirement as part of the Hospital Inpatient Quality Reporting Program. A trend analysis of HYST SSI using data submitted to the NHSN has not been previously reported. To estimate the overall trend of HYST SSI incidence rates, we analyzed data reported from acute-care hospitals with surgery performed between January 1, 2009, and December 31, 2018. Methods: We analyzed inpatient adult HYST procedures with primary closure resulting deep incisional primary and organ-space SSIs detected during the same hospitalization or rehospitalization to the same hospital. SSIs reported as infection present at time of surgery (PATOS) were included in the analysis. Due to the surveillance definition changes for primary closure in 2013 and 2015, these were tested separately as interruptions to HYST SSI outcome using an interrupted time-series model with a mixed-effects logistic regression. Because the previously described changes were not significantly associated with changes in HYST SSI risk, mixed-effects logistic regression was used to estimate the annual change in the log odds of HYST SSI. The estimates were adjusted for the following covariates: hospital bed size, general anesthesia, scope, ASA score, wound classification, medical school affiliation type, procedure duration and age. Results: The number of hospitals and procedures reported to NHSN for HYST increased and then stabilized after 2012 (Table 1). The unadjusted annual SSI incidence rates ranged from 0.60% to 0.81%. Based on the model, we estimate a 2.58% decrease in the odds of having a HYST SSI annually after controlling for variables mentioned above (Table 2). Conclusions: The volume of hospitals and procedures for HYST reported to NHSN increased substantially because of the CMS reporting requirement implemented in 2012. The overall adjusted HYST SSI odds ratio decreased annually over 2009–2018, which indicates progress in preventing HYST SSIs.Funding: NoneDisclosures: None

Complexity in an unexpected place: Quantities in selected acquisition reports

In this article, the authors have looked at the definition of units in numerous acquisition programs and discovered that the units reported are almost never simple; in some programs, no two units are the same; and almost invariably, the units produced at the end of a long production run are substantially different from the early ones. They have identified three reasons why the units may differ. The first reason is changes over time, generally as system capabilities are improved. The second is due to mixed types, where units that are inherently dissimilar—such as CH-47F and MH-47G helicopters—are produced by the same program and each is called one unit. The final reason why units can differ is reporting accidents. The authors give examples of all three and discuss possible methods of improving the reporting requirement.

Does considering key audit matters affect auditor judgment performance?

This study examines the impact of considering key audit matters (KAM) on auditor judgment performance. This study uses a 2×2 between-subjects experiment based on a goodwill impairment testing case with 73 auditors. The two independent variables KAM consideration (present vs. absent) and client pressure (high vs. low) are manipulated. As dependent variables, skeptical judgment and action as different facets of auditor judgment performance are used. The results suggest that auditors exhibit significantly less skeptical judgment when KAM consideration is present than when KAM consideration is absent. This implies that, when considering KAM, auditors are more willing to acquiesce to their clients’ desired accounting treatments due to moral licensing. By showing that KAM consideration leads to less skeptical judgment, it can be documented that the new KAM reporting requirement, intended to improve the communicative value of the auditor’s report for users (IAASB, 2012), comes at the expense of auditor judgment performance. As in every experiment, the risk that the results are case-specific has to be acknowledged.

Title IX Mandated Reporting: The Views of University Employees and Students

Per Title IX of the Higher Education Amendments of 1972, many university employees are mandated reporters of sexual assault. University employees (N = 174) and students (N = 783) completed an online survey assessing knowledge and opinions of this reporting requirement. University employees and students generally reported being quite knowledgeable of reporting requirements. Most university employees indicated they would report an incident disclosed by a student, but students were fairly ambivalent about whether they would disclose to faculty members. Nearly one in five students (17.2%) indicated that Title IX reporting requirements decreased their disclosure likelihood. These findings suggest that mandated reporting policies, as well as how they are presented to students and faculty, should be examined in order to increase compliance and facilitate disclosure.