This review study examines the existing literature on internal audit (IA) in the United States to identify how internal audit functions (IAFs) have evolved in response to global shifts in business practices. Despite growing attention to IA, the literature remains fragmented, limiting a comprehensive understanding of how IA has evolved in response to business practices. Through a systematic review, this study analyzes 171 studies published between 1984 and 2023 retrieved from the Scopus database. This study investigates the characteristics of the literature and topics discussed, focusing on six key aspects: the practice of IA, the role of IA, the quality of IA, information technology (IT) auditing, risk management, and the relationship between IA and other parties. The results reveal a paradigm shift in the activities undertaken by internal auditors and a significant transition in the literature from discussing traditional topics to new topics related to environmental changes, the climate crisis, geopolitical challenges, and technological developments. The results also emphasize the need for more theory-based, empirical, and comparative studies on IA in different contexts and sectors. This paper identifies substantial gaps in IA literature and proposes directions for future research agendas, particularly concerning the influence of politics, culture, and the effects of COVID-19 on IA practices. These insights provide valuable guidance for IA practitioners, researchers, standard setters, and the Institute of Internal Auditors (IIA) in refining frameworks and understanding global IA trends.

Using the procedures stipulated by the grounded theory, this study reports the findings of in-depth semi-structured interviews with five owners-managers of small and medium sized enterprises (SMEs)on how performance is being measured. The findings reveal that the owners-managers use a hybrid approach combining both the financial and non-financial measures to evaluate performance against the predetermined goals and time. Time axis is based on the duration of completing a project. The findings have implications to both the SMEs and large organizations.

Aim/purpose – This study reports the demand for Big 4 audits among institutional and family owners, the two dominant ownerships in the GCC countries. We conducted this in-depth study to gain an understanding of the type of firms, family-owned or institu- tional-owned firms that lead to choosing audit firms. Design/methodology/approach – This study employed a quantitative cross-country study by selecting a sample based on secondary data extracted from the Capital IQ data- -set from a panel of 1827 non-financial firms listed on the stock exchanges of the Gulf Cooperation Council (GCC) countries from 2010 to 2018. The hypothesized effects of institutional ownership (IO) and family ownership (FO) on the selection of external auditors in these countries were examined using logit, probit, and heteroskedastic probit analysis. Findings – The study finds that institutional investors play a crucial role in influencing firms’ choice of auditors in the GCC. Family-owned firms tend to hire non-Big 4 firms when the owners actively monitor the firms’ financial transactions. In addition, the study finds that both domestic and foreign institutional investors have a significant positive effect on auditor selection, with domestic institutional investors having priority. These findings support the efforts of market authorities in the GCC to highlight the critical role of IO over FO in improving audit quality. Research implications/limitations – The results are highly relevant for shareholders, executives, institutional investors, regulators, and academics. They help them improve the growth of capital and audit markets by developing best practices, thereby helping achieve an optimal framework for auditor choice that matches higher audit quality. This study focuses on only two types of ownership structures (institution and family) despite the many options because of the extensive debates and discussions on the association between the studied ownership types and auditor choice. Originality/value/contribution – Study highlighted the role of institutional investors in GCC countries as one of the most attractive emerging economies in the Middle East. Since no research has been conducted on the role of institutional and family investors in selecting external auditors in GCC countries, this study has made a significant contribu- tion to the accounting and auditing literature. It mitigates the gap in the literature on emerging markets. The findings can provide policymakers with guidelines for including institutional investors and FO in GCC countries to ensure high-quality audits. Keywords: institutional ownership (IO), family ownership (FO), auditor choice, Gulf Cooperation Council, emerging economies. JEL Classification: G23, G32, D10, M42.

This study investigates the insights and criteria audit partners use to select prospective clients in an emerging market. We use questionnaires to solicit responses from a sample of auditors at the partner/manager level in Big and non-Big 4 audit firms with international affiliations in an emerging economy. Descriptive statistical tools including the chi-square test and multiple logistic regression analysis are used for the analysis. This study finds that auditor reputation enhancement and corporate governance effectiveness are significantly associated with the acceptance of listed companies and that the higher financial reporting quality of listed companies and the need to promote audit and assurance services are significant factors affecting such decisions. Audit firms tend to select parents or subsidiaries because of the expected effective audits and reduced misstatement and litigation risks and audit firm industry expertise is needed to mitigate expected client risks to significantly affect the selection of clients with prior-year audit qualifications. Fraud is significantly associated with the selection of clients with prior violations reported by government monitoring bodies. This study is among the few empirical studies in emerging economies that provide insights from practicing auditors on a set of comprehensive attributes that affect the selection of audit clients. The findings have implications for audit partners and firms, auditees, and the audit profession in selecting clients that fit the firm’s and profession’s vision of audit branding and reputation

This study aims to identify the impact of COVID-19 on audit quality based on the investigation of three auditing aspects, namely: audit fees, audit procedures, and auditors' salaries in Saudi Arabia and Yemen. For data collection, fifty-five (55) questionnaires were distributed to internal auditors, external auditors, managers of audit offices, and financial managers. Eleven managers of audit offices and auditors were interviewed. A descriptive, regression analysis, and T-test were used. The study results reveal that the audit quality has been significantly affected due to the devastating effect of COVID-19 on audit fees, audit procedures, and audit staff salaries. In addition, the results show that Yemen is severely affected due to several factors, which include a lack of modern auditing systems. Also, private ownership of establishments and the absence of laws for determining audit fees negatively impacted the audit quality. Being the first of a practical kind, this study provides a significant contribution to the existing literature on the impact of COVID-19 on the quality of auditing. This would be useful for corporations, audit offices, auditors, and researchers. Moreover, this study can bridge the identified research gap on this topic and provide empirical evidence about the impact of COVID-19 on audit quality. Doi: 10.28991/esj-2022-SPER-06 Full Text: PDF

The literature on management accounting Performance Measurement (PM) focuses on the manufacturing industry, and relatively little emphasis is given on services including Financial Services Industry (FSI) in developing countries. An attempt has been made in this multiple case study to examine PM practices in Omani and US banks within the framework of agency theory. The research results anticipate the higher effect of principal-gent relationship on PM practices in developed country/USA than a developing country, though the usefulness of management accounting in PM is found similar in both developed and developing countries. The concern about the implementation and integration of technology in PM is seemingly a new phenomenon in banks. Such a phenomenon (observed higher in Oman than USA) needs due attention for organizations to enjoy the benefits of PM. Based on the empirical findings some hypotheses are generated, and further research directions are given at the end of this research.

This paper examines the impact of accounting conservatism and auditing conservatism on earnings quality. Four proxies were used to measure earnings quality; persistence, accrual quality, value relevance and smoothness.We use the published annual reports of all the listed firms in the Muscat Securities Market (MSM) for the 6-year period from 2012-2017 to assess the interplay between accounting conservatism, auditing conservatism and earnings quality.The result reveals a positive and significant effect of auditing conservatism on earnings quality but no significant effect of accounting conservatism on earnings quality in terms of smoothness of earnings. This implies users tend to rely on auditors’ reports when assessing earnings quality.Our results are robust to the inclusion of four control variables; size of the firm, risk, audit firm size and industry type, the use of an additional analysis of one special case of auditing conservatism and earnings quality, and tests of potential relationship between auditing conservatism.The findings have implications to regulators when formulating standards and guidelines, auditors in the course of an audit, investors in reviewing the financial statements, and preparers when preparing their financial reports.The study recommends that the Omani stockholders as well as international stockholders rely heavily on auditing conservatism which means that stockholders are prepared to receive modified audit reports.

Management relies upon the results of performance evaluation to assess achievements and to formulate strategies. Traditional approach of evaluations focuses mainly on the financial achievements. This paper argues that companies need to use both financial and non-financial elements.Various evaluation methods were assessed. A holistic approach to assessment is recommended.

High-profile fraud cases have continued to make the news over the past few years. But exactly what are auditors' responsibilities when it comes to detecting fraud? The author of this article reveals that the auditing profession has come full circle-from being responsible to not being responsible for detecting fraud. But the volume and critical nature of fraud cases remain high, as do the number of auditing standards addressing this issue. The author explores this problem in depth, identifies situations where fraud may take place, and suggests various tools that auditors should use for fraud detection. (C) 2013 Wiley Periodicals, Inc.

A parent firm has many choices when it comes to selecting the indicators for measuring performance of its international joint ventures (IJVs). This paper identifies the indicators, discusses the reasons and factors that influence these choices. Semi-structured interviews with five US parent firms that have Chinese IJVs reveal that the parents use a range of internal and external indicators but these indicators differ from those they use for the parents themselves. This is due to different cultural and political emphases between the US and Chinese. However, there is no consistency on the weighting on the choices of the indicators, but the respondents reveal a need for a transparent and consistent evaluation process. These findings have implications to the managers of both the parent firms and IJVs, and stakeholders.

There are many definitions of materiality and such differences in definition show that there is great concern about the applicability of materiality in the auditing profession. Various materiality guidelines have been recommended by both academic researchers and accounting bodies, but the Auditing Practices Board in the UK has yet to recommend a guideline of its own. Looks at the recommendations put forward by those researchers and accounting bodies and the implications and possible pros and cons of having structured guidelines by the auditing profession in the UK. Concludes with a recommended materiality guideline which the Auditing Practices Board should seriously consider and the possibility of applying computer‐based decision aids as a tool to improve efficiency and effectiveness of decision making by the auditors.

PurposeThe purpose of this paper is to investigate the interaction between mandatory disclosures and voluntary disclosures of banks and the information content of corporate disclosures on firm performance.Design/methodology/approachBased on the US-listed banks from 2007 to 2015, this paper examines the interplay among the fair-value measurement, corporate governance disclosure and voluntary social responsibility disclosure. In addition, the paper examines the extent of such disclosure of mandatory items (fair-value measurement) versus voluntary items (corporate governance and social responsibility issues) on banks’ performance in terms of their return on equity and return on asset.FindingsThis paper finds that banks with a higher social responsibility disclosure score and stronger corporate governance tend to have lower percentages of Level 3 fair-value assets. Banks with a higher Level 3 fair-value asset disclosure have a lower financial performance.Practical implicationsThis paper provides evidence of the interplay of various corporate disclosures by banks and implies that banks use fair-value measurements to disguise their poor performance. The findings provide insights for the policymakers, investors and regulators to assess banks’ disclosure.Originality/valueThis paper extends the study of banks’ fair-value measurements and is the first study to examine the interaction between voluntary and mandatory disclosures. This study sheds lights on the theories of performativity, agency and stakeholder by demonstrating the information contents of corporate disclosures on firm performance.

Purpose This paper aims to utilize institutional theory to examine the impact of the 2008-2010 regulatory reforms on compliance with mandatory disclosures by savings and credit co-operatives (SACCOs) in Kenya. Design/methodology/approach Two-stage least squares panel regression approach is utilized to analyse data covering 1,272 firm-year observations for 212 SACCOs over a six-year period, 2008-2013. An analysis of the pre- and post-regulation impacts on compliance with mandatory disclosure requirements is also performed. Findings The results, which are in support of the institutional theory, reveal that licensed SACCOs engage in higher compliance with mandatory disclosures, and this improves from the pre- to the post-regulation period. The results show that SACCOs under inquiry engage in lower compliance with mandatory disclosure requirements, especially in the post-regulation period. The findings also reveal a significant and positive association between SACCO size, co-operative governance and compliance with mandatory disclosure requirements. Research limitations/implications The study focuses on transition-level SACCOs in a single country. An extension into other jurisdictions with nascent, transitional and mature SACCOs would provide greater insights into the impact of disclosure regulation. Further, the study uses a self-constructed disclosure checklist which is subject to coding errors and biases. Practical implications The findings highlight the need for SACCO regulators and accounting professional body to devise incentives to improve the level of compliance with required disclosures. Originality/value The study contributes to the dearth of evidence on the efficacy of the introduction of mandatory disclosure requirements in a developing country where compliance is problematic because of difficulties with enforcement.

The impact of current organizational behaviour upon the environment and concern over the long term effects has become almost a household topic. There are a growing number of reference books which discuss the various aspects and importance of this matter, but they often do so in isolation from the environment, education, and training. In addition to this, little has been discussed about the inter-relationships between the various aspects of organizational behaviour and its impact on the environment. This book intends to bridge the gap. It discusses the importance of environmental education and training in three different disciplines: the legal aspects, financial implications, and managerial choices and decision-making.

Purpose – This paper aims to analyze Public Companies Accounting Oversight Board (PCAOB) inspection reports on audit reports of those inspected accounting firms in Brazil, Russia, India and China (BRIC). In meeting the requirements of the Sarbanes-Oxley Act, the PCAOB conducts inspections on audit reports of firms listed on the New York Stock Exchange. Design/methodology/approach – The reports include those submitted by both the US audit parent firms and their secondary firms located outside the USA. In each PCAOB report, it unravels the nature of audit deficiencies. The focus is on Big Four because they play a dominant role in the marketplace and issuers’ market capitalization. All the seven-year deficiencies are documented since publications of the reports from 2004 to 2012. Findings – Of the 37 reports, 19 (51 per cent) were issued relating to audits conducted by the Big Four. Out of these 19 reports, 10 (53 per cent) contain inspection criticism. These include audit quality and common recurring audit deficiencies. Research limitations/implications – This paper is based solely on those inspection reports published by the PCAOB. Practical implications – The findings have significant implications to audit firms and the audit profession on improving audit quality, firms’ internal control and reports. Originality/value – No known prior research paper is available on the ramifications of the PCAOB’s inspection reports relating to BRIC.

This paper reports on the relative frequency of faculty’s publications in refereed business journals. ChiSquare analyses show significant differences on the three null hypotheses tested. Furthermore, Lambda tests (p < .01 when refereed business journal was used as independent variable) significantly predicted an institution’s Carnegie 2000 Classification, AACSB accreditation status, and the number of coauthors appearing on a single publication. In lieu of the findings, deans and heads of departments who tie merit pay, promotions and tenure decisions to having been published in one or more of the elite journals should rethink their policies. These measures of association indicate that a caste and class exists among the business and related journals.

This paper identifies key factors that drive and impede the growth of the insurance sector in India. Emerging economies have huge growth potential. India is an economy that attracts opportunities for growth. The growth pattern in the last ten years is discussed highlighting a huge influx of foreign funds to the country, and benefits and challenges to stakeholders, and extent of oversights on insurance firms. Using the finance data from all the 23 insurance firms in India for the period from 2005 to 2014, we find that the growth in insurance sectors is related to first year and renewal premiums, commission and operating ratios, individual and corporate agents, offices, capital and assets, and profits, and is not related to new products, investment income and claims ratio. The sector's contribution to economic growth is also shown. The findings have ramifications for the sector's providers, regulators and investors.

Purpose – This paper aims to assess 12 audit procedures that deemed challenging to insurance audits. Design/methodology/approach – This paper uses grounded theory as a framework for conducting series of semi-structured interviews with six technical audit partners, two from Big Four and four from non-Big Four. The interview agendas are drawn from the 12 audit approaches suggested by Practice Notes 20 (The Audit of Insurance in the United Kingdom) issued by the Auditing Practices Board (UK). Findings – Without an audit standard, practitioners will exercise excessive professional judgments and deviate from audit approaches. Research limitations/implications – Though the findings are solely drawn from the insurance sector rather than a wide spectrum of sectors, they have huge ramifications to accounting and audit professions, stakeholders and regulators. Practical implications – This paper reveals differences in audit approaches between the theoretical context and practical perspective. Social implications – The paper showed that impact of audit failure leads to litigation, financial losses and loss of faith in audit quality and approaches. Originality/value – This paper suggests a hybrid approach on the grounded theory, provides an extensive overview of the sector’s audit approaches and issues and unravels an urgent need for a concerted international auditing standard.

While the ranking of accounting journals has been extensively and continually investigated by scholars, very few studies have examined the trend and dynamics of the ranking. This research is an attempt to fill the void by testing four hypotheses related to pre-established lists of accounting journal tiers corroborated in the literature and the citations of articles published in those journals to ascertain if differences exist over time. The authors contribute to the current literature by examining the topic in a dynamic context, rather than as a static subject. Furthermore, the study introduces a simplified citationbased method which combines existing opinions of journal quality with timely updates in the field. The findings suggest a diminishing influence of celebrity authors and a more democratic and diversified world of accounting journals. While top tier journals maintain their lead, the gap between them and journals of lower tiers is shrinking. This new reality carries profound implications for researchers as well as policy makers in business schools.