Does the Internal Audit Function Play a Role in Mitigating Earnings Management?

This paper aims to investigate the effect of the characteristics of the internal audit function(IAF)on earnings management(EM)for a sample of 27 Tunisian listed companies.The authors employed the Correlated Panels Corrected Standard Errors model to estimate the regression equation.The results showed that EM is negatively associated with internal audit effectiveness,frequency of audit committee meetings with Chief Audit Executives(CAEs),the partial outsourcing of internal audit,and the firm’s size.Moreover,the authors found a positive relationship between EM and the use of IAF as a training ground for management and the private sector.This study is important to academics,regulators,and policymakers in introducing new governance reforms to strengthen the IAF as an important internal governance mechanism to reduce earnings management practices in emerging countries.The results also provide useful information for investors to examine the effect of internal audit characteristics on earnings management.

Auditor Reputation, Audit Opinion, and Eamings Management： Evidence From French Banking Industry

The aim of this research is to study the impact of auditor reputation and audit opinion on earnings management in French banks. This article used a sample of 162 French banks over the period from 2005 to 2012. By using three different tests （loss-avoidance, just-meeting-or-beating prior year＇s earnings, and abnormal loan loss provision）, the findings of this paper show that both high auditor reputation and qualified audit opinion constrain earnings management to avoid loss or to just meet or beat prior year＇s earnings in banks. In separate tests related to earnings management through abnormal loan loss provisions, the paper also finds that high auditor reputation constrains earnings management. Qualified audit opinion has a negative but non-significant effect on abnormal loan loss provisions.

Toward the Effect of Audit Quality on Earnings Management——Empirical Evidence from Manufacturing Enterprises Listed in Shanghai Stock Market

Nowadays, earnings management is a hot issue, but most of the researches focus on the incentives of earnings management and few of them refer to the effect of audit quality on earnings management. In this study, we directly examine the effect of external audit quality on earnings management by using discretionary accruals. We find that the discretionary accruals of non-dual audit companies are significantly greater than those of dual audit companies. We also find that clients of non-First Ten auditors intend to report greater discretionary accruals than those of First Ten auditors.

Financial Management and Control and Internal Audit System in the Public Sector in BiH

The introduction and implementation of finansijsko upravljanje i kontrola(FUK,financial management and control[FMC])in Federation of Bosnia and Herzegovina(FBiH)aims to incorporate a modern public internal financial control(PIFC)system into traditional public resources management models.This area is one of the reform areas in which Bosnia and Herzegovina(BiH)is obliged to harmonize the legislative framework and practice with the good practices and regulations recommended by the European Commission.The establishment and development of the PIFC are also an obligation of Bosnia and Herzegovina established by the Stabilization and Association Agreement between the European Community and the member states,of the one part,and Bosnia and Herzegovina,of the other part.The public internal financial control(PIFC)system focuses on enhancing transparency,financial discipline,and dedicated use of public resources,that is,transparent,economical,efficient,and effective management of public resources,and control of the use of those resources.The topic of this paper is“financial management and control in the public sector”where the aim is to show,through the conducted theoretical research,the level of achievement of the establishment of this system in public sector institutions in BiH.The European Union wants to direct all potential member countries towards development of internal controls in the use of their own resources,but also to create a control environment that would ensure the dedicated use of EU funds.In Bosnia and Herzegovina,there is no single legal framework in terms of a single law governing public internal financial controls.The contents of the applicable legal provisions at all three levels(BiH,FBiH,and Republic of Srpska[RS])are largely congruent thanks to the Coordination Committee of Central Harmonization Units(CHJs)in Bosnia and Herzegovina,through which the harmonization of regulations and practices in the development of public internal financial controls is ensured.

The Audit Opinion of Earnings Management in Listed Companies of China

The paper testes the relationship between audit opinions and financial sensitive zones and accounts on the basis of the data of A-share companies in China. The author finds that when ROE of listed companies is in the small-profit zone or in the large-loss zone, the probabilities that they get modified audit opinions increase. But the right-offering zone, accrual accounts and accounts below the line have no significant effects on the modified audit opinions. Besides, the author also finds that the ratio of accounts receivable to asset, debt ratio, previous year＇s audit opinion and change of CPA firms have significant positive effects on the modified audit opinions, while the ratio of major business revenue and size of companies have no notable effects. Some other factors such as cash ratio, age of the listing and CPA firm ranking have no consistent and continuous effects.

Research on the Influence Factors of the Auditing Quality from the Perspective of Profit Management

As one of the external mechanisms to protect investors,the quality of CPA auditing influences the profit of the investor directly.This paper studies the A-share listed companies in China from2009to 2011,with logistic regression,re-evaluating and exploring the influence factors to the auditing quality of CPA from the perspectives of the size of accountant firms and the profit management level.It finds that the size of accountant firms and the auditing quality are positively correlated with each other,but the statistics are not significant;however,the profit management level influences the auditing quality significantly.Besides,this paper finds that compared with the small-sized accountant firms,the profit management level and the auditing quality of those big-sized accountant firms are correlated with each more significantly.

Enhancement of Audit Closed-Loop Management for Optimal Audit Results Transformation

The process of converting audit findings into actionable improvement measures within an enterprise is pivotal for achieving the“value-added”objective of internal audits and fostering sustainable business development.By elucidating the definition and significance of transforming internal audit results,this study underscores the imperative of applying and effectively converting these findings.Additionally,it seeks to streamline the value assessment framework for internal audit result transformation and delineates key factors that impede this transformation.Furthermore,this study explores strategies to bolster the closed-loop audit management system and outlines specific methods for enhancing the transformation of internal audit results within the enterprise,thereby contributing to its overall progress.

Construction of Meteorological Observation Quality Management System for Basic Observation Business

A set of closed-loop normative standards of PDCA(planning-implementing-checking-improvement) of the quality management system is applied to promote the standardization, normalization and institutionalization of grass-roots meteorological observations, further improve the service availability and timely rate of data, and improve the quality and efficiency of meteorological observations.

BOM AUDIT驱动的生产车间线边库存数据准确性研究

针对生产过程中系统库存数据差异巨大的问题,以某汽车零部件制造企业倒车雷达生产车间为研究对象,分析了影响生产车间线边库存数据准确性的主要因素,提出了在BOM AUDIT驱动下消除库存差异的改善方法,并验证了该方法的可行性和有效性。研究结果表明,采用结合循环盘点的BOM准确性管理方法后,生产车间线边库存数据准确性得到了提高。

Energy Auditing and Improvement Scheme for Faculty of Applied Medical Sciences at Taibah University

In this work, a survey is used to investigate the current energy performance for Faculty of Applied Medical Sciences (previously Faculty of Engineering) at Taibah University in Medina city. The results of the survey show that several factors affect the energy performance in this building. It revealed that the building has been poorly designed from the point of view of thermal performance. Therefore, the building energy consumption needs to be monitored and maintained through energy auditing program. To determine the energy profile, the power consumption was calculated;the cooling load was estimated and analyzed to know the actual capacity required. The level of comfort in the building has been evaluated. Against the installed air conditioning capacity of 200-ton refrigeration, the cooling load calculations showed that the maximum cooling load needed, which is in August is only 83.22-ton refrigeration. In addition, illumination levels were measured and compared to the standard levels. Based on obtained results, two solutions were proposed: to install a building management system with approximate cost of 337,904 SR and to replace the existing chiller. Finally, the payback period for the proposed system has been estimated and found to be about 5.4 years.

Governance of artificial intelligence applications in a business audit via a fusion fuzzy multiple rule‑based decision‑making model

A broad range of companies around the world has welcomed artificial intelligence(AI)technology in daily practices because it provides decision-makers with comprehensive and intuitive messages about their operations and assists them in formulating appropriate strategies without any hysteresis.This research identifies the essential components of AI applications under an internal audit framework and provides an appropriate direction of strategies,which relate to setting up a priority on alternatives with multiple dimensions/criteria involvement that need to further consider the interconnected and intertwined relationships among them so as to reach a suitable judgment.To obtain this goal and inspired by a model ensemble,we introduce an innovative fuzzy multiple rule-based decision making framework that integrates soft computing,fuzzy set theory,and a multi-attribute decision making algorithm.The results display that the order of priority in improvement—(A)AI application strategy,(B)AI governance,(D)the human factor,and(C)data infrastructure and data quality—is based on the magnitude of their impact.This dynamically enhances the implementation of an AI-driven internal audit framework as well as responds to the strong rise of the big data environment.Highlights Artificial intelligence(AI)promotes the sustainability development of audit tasks.A fuzzy MRDM model extracts key factors from large amounts of data.Fuzzy decision-making trial and evaluation laboratory analysis accounts for dependence and feedback among factors.An effective framework of AI-driven business audit is proposed in which“AI cognition of senior executives”is the most important criterion.

From the Opacity of Internal Control to the Effectiveness of Legal Audit: Analysis of Issues and Determinants in Business in Cameroon

Legal audit is a statutory control of the accounts carried out based on internal control(IC).Meanwhile,paradoxically,IC is not always transparent to the legal auditor,but rather a compromise to his expectations.What are the determinants that allow the auditor to adapt to it?This paper proposes the analysis of issues and determinants of the effectiveness of legal audit in the context of an opaque IC.This study is carried out on a sample of 56 limited liability companies in Cameroon,carefully selected based on the existence of an IC service.The determinants explaining the auditor’s effectiveness in his mission are noted.

Joseph Hardy Ltd.： Internal Audit for Performance Improvement

This paper features a case study, which looks at the use of financial and non-financial indicators （NFIs） of performance in the monitoring of a production process. It highlights the apparent deficiencies in the use of some indicators and provides opportunities for the implementation of preferred alternatives and for improvements in the organization and evaluation of the production process.

Establishment of Effective Internal Audit Function： Recommendations for Best Practice

This paper^1, which is in the light of the last trends in internal auditing, aims to explain the challenges and major issues in establishment of an effective internal audit （IA） function to achieve value-added IA activities as a value-added service center. This paper also discusses the current internal auditing environment in Turkey considered for the needs and expectations of stakeholders and new legislations. In the next five years, five emerging activities for internal auditing may be taken into consideration, namely, the review of corporate governance process, auditing of enterprise risk management （ERM） processes, addressing linkage of strategy and company performance, the ethics audits, and the migration to International Financial Reporting Standards （IFRS）, they will be the major focus areas for internal auditing. The qualifications of IA staff, status within the corporation, setting up of the functional and administrative reporting lines, relationship with the audit committee of the board of directors, and the content of IA charter must be sufficient for assurance of the IA function＇s effectiveness and objectivity. The effective communication channels among management, audit committee, and IA become more important and must be operated in a consistent manner that accurately contributes to preventing potential future financial crisis and the effectiveness of risk management （RM）. Ten main imperatives of change for IA can be summarized as emphasizing RM and governance, addressing key stakeholder priorities, and optimizing IA resources. Based on professional practices, international standards of Institute of Internal Auditors （IIA）, best practices, and the relevant recommendations have been made by the authors for practitioners and stakeholders.

Internal Audit and Risk Analysis:The Particular Case of a Public Entity in Portugal

The purpose of this paper is to present the results obtained by an internal audit unit of a large public sector entity,in the area of education,during 2018,which we will call here Entity X and analyze the impact that developed work had in the management decisions of that entity.The methodology used in the preparation of the article is the case study,where Cervo,Bervian,and Silva(2007,p.62)define it as“research on a particular individual,family,group or community that is representative of their universe,to investigate the different aspects of life”.The theoretical framework on the theme(secondary sources)was developed from bibliographic and documentary research,which concerns the classification of procedures and are appropriate to the characterization of this study,as an instrument for collecting information on the subject in question(Gil,2006).The results obtained are related to the activity of the referred internal audit unit in 2018,which proved to be quite fruitful and are developed in points 4,5,and 6 of the paper.During the preparation of the study,some limitations were found,related to the fact that it was only possible to analyze the year 2018,thus failing to establish a relationship with the department’s activity history.In our opinion,this study is important because it allows other similar entities to verify that it is possible to carry out internal auditing in the public sector(especially in this sector of education),since this practice is not yet disseminated within the area.This study is original in that it uses real data from an internal audit body.

Assessment of the Implementation of Energy Conservation Opportunities Arising from Energy Audits;A Study of Four-Star and Five-Star Hotels in Nairobi Kenya

This study assesses the implementation of energy conservation opportunities in four-star and five-star hotels in Nairobi. The Covid-19 pandemic had a significant impact on the Hospitality Industry. Currently, there is a growing inclination to furnish guests with superior and sustainable services in an energy-efficient and eco-friendly way. Comprehensive research was conducted from energy audits gathered from the establishments and contracted auditing companies, on top of this, hotel staff were given digital questionnaires. To add to the data, the researcher surveyed the hotels with engineering managers. The Energy Audits found that all 10 hotels had adopted Energy Conservation Opportunities (ECOs). After further analysis, the mean adoption rate of Energy Conservation Opportunities (ECOs) during the past three years was 55.83%, which was below the aim of 100%. According to studies, hotel staff manages energy to cut costs. The researcher found that hotels use up a lot of energy. However, they have conservation potential, depending on government policies, costs, ease of implementation, and management commitment to sustainable practices. Essentially, Energy Conservation Opportunities (ECOs) reduce energy expenditures and boost reliable revenues, especially during high energy prices and uncertainty.

The Self-inspections(Internal Audits)Process as a Part of the Pharmaceutical Quality System:Formation of a Risk-Based Approach to Internal Audits Planning

The quality system of any modern pharmaceutical company is the pharmaceutical quality system(PQS),which extends the GMP standards to all stages of the medicinal productslife cycle,from pharmaceutical development to its withdrawal from production.The principal difference between PQS and GxP rules from other quality systems is that the medicinal product,its safety and efficacy is put at the forefront.At the same time,PQS implies a process approach to all components that should be aimed at achieving the main goal—ensuring and guaranteeing the quality of the medicinal product for the end user(patient)—and should be based on the quality risk management system.An integral part of PQS,as well as the GxP rules adopted in the European Union and PIC/S,is a process for self-inspections and/or quality audits,which regularly appraises the effectiveness and applicability of the PQS.This publication is dedicated to the definition of self-inspections(internal audits)as one of the PQS’s processes.The article defines the main standard stages and develops a model of a risk-based approach to the self-inspections’planning in relation to processes of the pharmaceutical quality system.

The Applic ation of Internal Quality Audit in ADCOP Project

Internal quality audits are a key activity in the quality management ofoil projects.Quality management aims at meeting project quality requirements,coordinatingproject progress,assisting in controlling project costs,and realizing continuousimprovement in project quality management.

地方审计管理体制改革能抑制地方国有 企业金融资产配置吗?

以2015年末我国实施的省以下审计机关人财物管理试点改革作为准自然实验,选取2011—2020年A股地方国有企业为研究样本,利用双重差分模型实证检验地方审计管理体制改革对地方国有企业金融资产配置的影响。研究结果表明,地方审计管理体制改革有效抑制了地方国有企业金融资产配置规模。区分金融资产类别后研究发现,地方审计管理体制改革对企业显性金融资产规模的抑制效果较明显,但与隐性金融资产配置规模间无明显相关关系。进一步研究发现,当地方审计管理体制改革力度以及地方审计机关的审计强度越大时,政府审计对企业金融资产配置的抑制作用越明显。机制分析发现,地方审计管理体制改革通过规范政府干预缩减了地方国有企业显性金融资产配置规模,且在财政压力较大的地区这一抑制效果更为明显。

Measures for the Construction Cost Budget and Settlement Audit

With the deep and sustainable development of the market economy,the competitive environment and development pattern faced by China’s construction industry are becoming more and more severe.In this context,construction projects should actively incorporate the development trends of the market economy and focus on analyzing relevant influencing factors and risk content.Considering previous experience,the audit effect of construction project budget and settlement has a major impact on the quality and economic benefit of construction projects to a certain extent.In view of this,this paper mainly focuses on the content and method of the construction cost budget and settlement audit as well as suggests measures for the construction cost budget and settlement audit,so as to improve the construction cost management level.