Download or read book The Effect of Regulatory Oversight on the Association Between Internal Governance Characteristics and Audit Fees written by El'fred Boo and published by . This book was released on 2007 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the relationship between internal governance, external audit monitoring and regulatory oversight for a sample comprising industrial companies and financial/utility companies subject to additional industry-specific regulation. Our results indicate that the association between audit fees and board/audit committee (i) independence and (ii) size are weaker for regulated companies. These observations are consistent with the notion that regulatory oversight partially substitutes the external audit as a monitoring mechanism. Boards/audit committees with more multiple directorships, however, demand a more extensive audit in the presence of regulatory oversight to protect their reputation capital. Our study enhances our understanding of the complex relationships amongst the major corporate governance elements.
Download or read book CLIENT OPERATIONAL REGULATORY ENVIRONMENT AND AUDITOR RESPONSE written by Yufan Dong and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: All companies are subject to some degree of regulatory oversight of their operations. Economics, finance, and government research demonstrate that operational regulatory oversight (for example, provided by the EPA or FDA) imposes financial and operating burdens on regulated firms. My study examines how auditors respond to their clients' operational regulatory oversight with additional audit costs, as reflected in audit fees. I focus on operational regulatory oversight from six federal regulatory agencies with authority to regulate companies in any industry. I find that operational regulatory oversight intensity, measured by number of regulators, occurrences of regulator-specific disclosures, and regulatory fragmentation, is positively associated with audit fees. Cross-sectional tests show that operational oversight from "continuous" regulators (i.e., regulators that maintain routine oversight) significantly weakens the positive association between operational regulatory oversight and audit fees. Further analyses provide no evidence that the higher audit fees are accompanied by changes in auditor effort. Lastly, my results are robust to an audit fee change model and an alternative measure of regulatory fragmentation.
Download or read book Government Auditing Standards 2018 Revision written by United States Government Accountability Office and published by Lulu.com. This book was released on 2019-03-24 with total page 234 pages. Available in PDF, EPUB and Kindle. Book excerpt: Audits provide essential accountability and transparency over government programs. Given the current challenges facing governments and their programs, the oversight provided through auditing is more critical than ever. Government auditing provides the objective analysis and information needed to make the decisions necessary to help create a better future. The professional standards presented in this 2018 revision of Government Auditing Standards (known as the Yellow Book) provide a framework for performing high-quality audit work with competence, integrity, objectivity, and independence to provide accountability and to help improve government operations and services. These standards, commonly referred to as generally accepted government auditing standards (GAGAS), provide the foundation for government auditors to lead by example in the areas of independence, transparency, accountability, and quality through the audit process. This revision contains major changes from, and supersedes, the 2011 revision.
Download or read book The Effects of Independent Audit Committee Member Characteristics and Auditor Independence on Financial Restatements written by Vineeta Divesh Sharma and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The U.S. Securities and Exchange Commission (SEC) continues to reform the corporate governance mechanisms in order to improve the quality of financial reporting and thus, enhance the confidence of investors in the stock market and in the accounting profession. Despite the efforts of the SEC, financial reporting scandals continue with record numbers of financial restatements documented by the General Accounting Office. A financial restatement is a correction of a previously misstated financial statement. There is a small volume of literature examining the effects of corporate governance mechanisms on financial restatements. The results of these studies however, are mixed and possibly explained by their narrow focus and omitted variables that could influence the effectiveness of audit committees. Consequently, this study examines the effects of independent audit committee member characteristics and auditor independence on financial restatements. Specifically, this study investigates the relationship between the likelihood of financial restatements and: (1) the expertise of the independent audit committee members, (2) the expertise and diligence of the independent audit committee members, (3) the reputation of the independent audit committee members, (4) the interaction effect of expertise, diligence and reputation, (5) the tenure of the independent audit committee members, and (6) the cash compensation paid to independent audit committee members. Prior studies have not investigated some of these variables or the interaction effects of independent audit committee member characteristics on financial restatements. This study also investigates the association between auditor independence and financial restatements. The SEC alleges that an increasing number of audit failures are due to the lack of auditor independence. One of the major sources of the lack of auditor independence is the auditor's economic dependency on the client. The provision of non-audit services increases the financial reliance of the auditor on the client. As a result, the auditor may become reluctant to raise issues with the preparation of the financial statements at the risk of foregoing the lucrative non-audit services fees. The SEC believes that longer audit firm tenure can also impair auditor independence and Section 203 of the Sarbanes-Oxley Act suggests periodic audit firm rotation. Therefore, auditor independence was measured as: (1) fees paid to the auditor, and (2) audit firm tenure. Finally, this study extends the prior literature by studying the interaction effects of independent audit committee member characteristics and auditor independence on financial restatements. This interaction effect is important because the external auditor and the audit committee are regarded vital governance mechanisms that interact and exchange dialogue in the performance of their respective oversight of the financial reporting process. Prior research has not investigated this important interaction effect. The sample of the study comprises 69 U.S. publicly listed companies that announced their restatement from 1 January 2001 to 31 December 2002. These companies were matched with 69 non-restatement companies based on industry and size. The data for the study is derived from SEC filings such as Form 10-K and DEF 14A, and Compustat. The univariate results show that compared to restatement firms, non-restatement firms generally have effective audit committee characteristics. The audit committees of non-restatement firms have members who are experts, diligent, reputable and appropriately compensated. They also pay lower non-audit services and total fees, and have audit firms with longer tenure. The multivariate results show that after controlling for other governance structures and firm specific non-governance variables, the likelihood of financial restatements is related to independent audit committee member characteristics and auditor independence. Specifically, the likelihood of financial restatements decreases when independent audit committee members are: (1) experts, (2) experts and diligent, (3) reputable, (4) experts, diligent and reputable, and (5) appropriately compensated. The audit committee member tenure variable is insignificant. In relation to the auditor independence variables, the multivariate results show that the likelihood of financial restatements increases when the non-audit services and total fees generated by the client are higher. On the other hand, the likelihood of financial restatements decreases when audit firm tenure is longer. The empirical results of this study suggest that independent audit committees are more effective overseers of the corporate financial reporting and auditing processes when: they comprise majority experts, they meet regularly, their members are reputable, and audit committee members are appropriately compensated. On the other hand, external auditors are not deemed to be effective overseers of the corporate financial reporting process when the non-audit services and total fees generated by the client are higher but are effective when audit firm tenure is long. The results support the SEC's concerns regarding the provision of non-audit services impairing auditor independence. The results also support the Sarbanes-Oxley Act of 2002 which under Section 201 prohibits external auditors from providing certain non-audit services to its audit client. Overall, these results support the regulatory efforts to increase the quality of financial reporting by enhancing the corporate governance process related to audit committees and auditor independence. However, the results do not support calls to limit the tenure of the auditor. The results of the multivariate interaction effects suggest that, after controlling for other governance structures and firm specific non-governance variables, when the non-audit services and total fees generated by the client are higher, the likelihood of financial restatements increases under conditions when the audit committee is not effective (a non expert audit committee, an audit committee that does not meet regularly, an audit committee whose members are not reputable or an audit committee that is not appropriately compensated). The implication of this result is that it provides evidence of conditions under which restatements take place. Knowledge of such conditions could aid regulators further improve the financial reporting process and corporate governance. This knowledge will support regulators in revising policies that ensure audit committee members are not only independent but also comprise other critical qualities. These improvements to the audit committee coupled with the existing regulations on the provision of non-audit services suggest a company's governance will be more effective. Overall, the results extend current knowledge in the sparse but growing literature related to financial restatements and corporate governance, and extend our understanding of the effectiveness and interaction of governance mechanisms in reducing financial restatements.
Download or read book Standards for Internal Control in the Federal Government written by United States Government Accountability Office and published by Lulu.com. This book was released on 2019-03-24 with total page 88 pages. Available in PDF, EPUB and Kindle. Book excerpt: Policymakers and program managers are continually seeking ways to improve accountability in achieving an entity's mission. A key factor in improving accountability in achieving an entity's mission is to implement an effective internal control system. An effective internal control system helps an entity adapt to shifting environments, evolving demands, changing risks, and new priorities. As programs change and entities strive to improve operational processes and implement new technology, management continually evaluates its internal control system so that it is effective and updated when necessary. Section 3512 (c) and (d) of Title 31 of the United States Code (commonly known as the Federal Managers' Financial Integrity Act (FMFIA)) requires the Comptroller General to issue standards for internal control in the federal government.
Download or read book The Association Between Internal Control and Corporate Governance written by Xu Sun and published by . This book was released on 2014 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis provides additional evidence on the association between internal control quality and corporate governance. The analyses are based on a sample of U.S. firms with internal control auditing reports from 2004 to 2012. My logistic regression analyses indicate that internal control quality is related to the characteristics of the audit committee, board of directors and CEO. First, I find that the independence of board directors is negatively related to internal control material weaknesses (ICMWs). Large firms tend to have large audit committees and boards of directors, and more female directors on the boards, and are negatively related to ICMWs. Second, I find that compared to Public Company Accounting Oversight Board Auditing Standard No. 2, Auditing Standard No. 5 has no impact on the relationship between internal control quality and the effectiveness of the audit committee and board of directors, except that the positive relationship between independence of audit committee members and ICMWs in the Auditing Standard No. 2 period disappears under Auditing Standard No. 5. Third, I find that companies where the CEO has high ownership or a large portion of cash and bonus compensation have a positive relationship with ICMWs, and that CEO duality and CEO age are negatively associated with ICMWs. However, I fail to find any evidence to support a relationship between corporate governance and the remediation of ICMWs.
Download or read book The Effect of Audit Committee Characteristics and Non Audit Fees on Audit Fees written by Lawrence Abbott and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the association between audit committee characteristics and audit fees, using data gathered under the recent SEC fee disclosure rules. We hypothesize that audit fees will be higher in the presence of an active and independent audit committee. Our base our hypothesis upon two premises. First, we argue that independent and active audit committees demand a higher level of audit quality due to concerns about monetary or reputational losses arising from financial misstatements. This higher audit quality demand may manifest itself in a higher amount of audit coverage, which, in turn should result in a concomitantly higher audit fee. Second, independent and active audit committees may give rise to greater auditor fee bargaining power. We examine a sample of 262 non-regulated, Big 5-audited firms that filed both 10-K and proxy forms with the SEC in the period from 2/5/2001 to 3/23/2001. Audit committees comprised solely of independent directors that meet at least four times annually are significantly, positively associated with audit fees. This evidence is consistent with audit committee members taking actions within their span of control to ensure a higher level ofaudit coverage, as well as facilitating auditor independence. Finally, we also examine the impact of non-audit fees on audit fees. We document a significantly positive association between audit fees and non-audit fees, consistent with prior research from the early 1980's.
Download or read book Higher Education in the Twenty First Century II written by Abdulla Y. Al-Hawaj and published by CRC Press. This book was released on 2015-10-29 with total page 140 pages. Available in PDF, EPUB and Kindle. Book excerpt: Ahlia University contributes to the advancement and propagation of knowledge by encouraging its academics and research students to publish their original research that can be applied to real-life situations. Co-operation with Brunel University London in the United Kingdom led to the establishing of a Ph.D. programme at Ahlia University in 2005.An i
Download or read book The Audit Committee Performing Corporate Governance written by Laura F. Spira and published by Springer Science & Business Media. This book was released on 2007-05-08 with total page 191 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why do we need to understand audit committees? The Cadbury Committee recommended that UK companies should adopt them in response to financial scandals that have stemmed from dubious financial reporting practices. In other countries, similar commissions have made similar recommendations and audit committees are now a common institution. However, many practitioners doubt whether an audit committee really does much to ensure the integrity of a firm's financial statements because, as outsiders, members don't know enough to dig deeply beneath the numbers. The Audit Committee: Performing Corporate Governance argues that such criticism overlooks the ceremonial function of these committees. The audit committee is an arena where members can form and strengthen shifting and fragmentary networks with each other and with the external auditors. Within these networks, both consensus and independence are demonstrated, generating comfort, which legitimises the company and maintains its access to external sources of capital. The audit committee is a key part of the corporate governance structure within an organisation. Many in the UK have been patched together to meet regulatory requirements and their operation is poorly understood because few people other than their members have access to their deliberations. In this account of the world of audit committees the practitioner will find the ethnographical perspectives on ceremonial performance, consensus, independence, and comfort both familiar and different. It's like looking at a photograph of something commonplace from an unusual angle or through a strange-shaped lens.
Download or read book The Complexities Of Sustainability written by David Crowther and published by World Scientific. This book was released on 2022-12-02 with total page 383 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sustainability is a topic of great interest to governments, businesses and individual members of society. There is a general consensus that sustainability is important and therefore, needs to be addressed. There is much less consensus, however, as to what this actually means and how it can be addressed. It appears to mean different things to different people and certainly everyone has their own priorities about what needs to be addressed. Consensus is difficult to find because of the complexity of what is involved in sustainability. This book addresses a number of these complexities by looking at different perspectives from experts from a wide range of different disciplines and from different parts of the world. The aim of the book ,therefore, is to stimulate discussion about what needs to be prioritised, as this forms an essential precursor to taking the necessary actions in order to achieve the essential sustainability for the planet.This book is indexed in Scopus.
Download or read book Governance and Auditing written by Peter Moizer and published by Edward Elgar Publishing. This book was released on 2005 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This authoritative new collection contains reprints of seminal articles on the subject of auditing and its relationship to the way in which outside stakeholders monitor the activities of corporate management. Whilst the primary audience is students in upper-level undergraduate and graduate accounting courses, the book should also be of use to existing researchers, as it collects together the 'must read' articles on the subject in a readily accessible form. The articles have been selected to cover four broad topic areas: (i) the role of auditing in the governance process, (ii) audit quality and auditor reputation, (iii) governance and audit committees and (iv) the relationship between internal and external auditors. The readings show that much work has been done and that there now exists a substantial body of knowledge of how auditing can contribute to corporate governance. The volume makes an important contribution to an issue that will continue to raise challenges in the years ahead. 25 articles, dating from 1971 to 2003
Download or read book Women on Corporate Boards of Directors written by Ronald J. Burke and published by Springer Science & Business Media. This book was released on 2000-03-31 with total page 296 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume, the first to focus exclusively on women serving on corporate boards of directors, provides the latest thinking and research findings on this increasingly important corporate governance issue. It includes censuses of women directors in a number of countries, identifies reasons for their limited numbers, indicates why appointing qualified women to boards offers competitive advantages, and suggests practical ways corporations can attract, recruit and appoint more women board members. Researchers interested in gender and corporate governance issues, companies interested in increasing their numbers of women board members, and women and men serving or hoping to serve on corporate boards will find this book of interest.
Download or read book The World s Future Crisis Extractive Resources Depletion written by Shahla Seifi and published by Springer Nature. This book was released on 2021-10-01 with total page 205 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book focuses mainly on strategic decision making at a global level, which is rarely considered in approaches to sustainability. This book makes a unique contribution as the work looks at global consequences of mineral exhaustion and steps that can be taken to alleviate the impending problems. This book highlights how sustainability has become one of the most important issues for businesses, governments and society at large. This book explores the topic of sustainability as one that is under much debate as to what it actually is and how it can be achieved, but it is completely evident that the resources of the planet are fixed in quantity, and once used, cannot be reused except through being reused in one form or another. This is particularly true of the mineral resources of the planet. These are finite in quantity, and once fully extracted, extra quantities are no longer available for future use. This book argues and presents evidence that the remaining mineral resources are diminishing significantly and heading towards exhaustion. Once mined and consumed, they are no longer available for future use other than what can be recycled and reused. This book demonstrates that future scarcity means that best use must be made of what exists, as sustainability depends upon this, and best use is defined as utility rather than economic value, which must be considered at a global level rather than a national level. Moreover, sustainability depends upon both availability in the present and in the future, so the use of resources requires attention to the future as well as to the present. This book investigates the alternative methods of achieving the global distribution of these mineral resources and proposes an optimum solution. This book adds to the discourse through the understanding of the importance of the depletion and finiteness of raw materials and their use for the present and the future, in order to achieve and maintain sustainability.
Download or read book The Role of Board Oversight in Central Bank Governance Key Legal Design Issues written by Wouter Bossu and published by International Monetary Fund. This book was released on 2019-12-27 with total page 71 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses key legal issues in the design of Board Oversight in central banks. Central banks are complex and sophisticated organizations that are challenging to manage. While most economic literature focuses on decision-making in the context of monetary policy formulation, this paper focuses on the Board oversight of central banks—a central feature of sound governance. This form of oversight is the decision-making responsibility through which an internal body of the central bank—the Oversight Board—ensures that the central bank is well-managed. First, the paper will contextualize the role of Board oversight into the broader legal structure for central bank governance by considering this form of oversight as one of the core decision-making responsibilities of central banks. Secondly, the paper will focus on a number of important legal design issues for Board Oversight, by contrasting the current practices of the IMF membership’s 174 central banks with staff’s advisory practice developed over the past 50 years.
Download or read book Defining Measuring and Communicating the Value of Internal Audit written by Marc Eulerich and published by . This book was released on 2020-07-15 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Audit Regulations Audit Market Structure and Financial Reporting Quality written by Christopher Bleibtreu and published by . This book was released on 2021-11-24 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt: Audit Regulations, Audit Market Structure, and Financial Reporting Quality provides a structured overview of the empirical and analytical literature on the effects of audit market regulations. After a short introduction, the monograph is organized as follows. Chapter II addresses the structure of the audit markets of industrialized countries. First presenting an overview of the concentration metrics used to describe the structure of an audit market or a market segment, then providing the empirical findings on audit market concentration at the national level and presenting an overview of the main reasons that led to the currently high degree of concentration. Chapter III summarizes the reasons why regulators worldwide consider a high degree of concentration to be a concern. In particular, it reviews the regulator's assumption that a high degree of concentration inevitably leads to a low degree of competition and to the corresponding effects of low audit quality and high audit fees. It also provides an overview of the empirical findings on the association between concentration and audit quality and fees, respectively. Chapter IV introduces the mandatory audit firm rotation, the prohibition on the joint supply of audit and non-audit services, and joint audits as examples for regulations that are likely to have both incentive and market structure effects. Chapter V summarizes the empirical findings on the effects of these regulations on audit quality and market structure. Chapter VI summarizes models that regard the market structure as given. The results from these models show that the effects of regulations are not straightforward, but depend on various factors related to the auditor, the client, and the legal environment. Chapter VII gives an overview of analytical research that simultaneously considers incentive effects and market structure effects. It also provides a brief overview of industrial organization models that seem suitable to expand the models applied to investigate the effects of audit regulations. Chapter VIII concludes and highlights avenues for future research.
Download or read book Corporate Governance written by Robert A. G. Monks and published by Wiley-Blackwell. This book was released on 2003-12-19 with total page 584 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the wake of the dramatic series of corporate meltdowns: Enron; Tyco; Adelphia; WorldCom; the timely new edition of this successful text provides students and business professionals with a welcome update of the key issues facing managers, boards of directors, investors, and shareholders. In addition to its authoritative overview of the history, the myth and the reality of corporate governance, this new edition has been updated to include: analysis of the latest cases of corporate disaster; An overview of corporate governance guidelines and codes of practice in developing and emerging markets new cases: Adelphia; Arthur Andersen; Tyco Laboratories; Worldcom; Gerstner's pay packet at IBM Once again in the new edition of their textbook, Robert A. G. Monks and Nell Minow show clearly the role of corporate governance in making sure the right questions are asked and the necessary checks and balances in place to protect the long-term, sustainable value of the enterprise. A CD-ROM containing a comprehensive case study of the Enron collapse, complete with senate hearings and video footage, accompanies the text. Further lecturer resources and links are available at www.blackwellpublishing.com/monks
