The literature in The Americas is reviewed with a focus on developments that have implications for the expanded scope of internal auditing and the changing skill sets of internal auditors. This focus has implications for CBOK The literature indicates a paradigm shift in the activities performed by internal auditors. The increasing complexity of business transactions, a more dynamic regulatory environment in the USA, and significant advances in information technology have resulted in opportunities and challenges for internal auditors.
Although in , The IIA responded to the changing organizational environment by updating the professional practices framework, more work needs to be done to prepare internal auditors for the expanded set of skills and knowledge required to perform audits of the future. By presenting an overview of past literature in The Americas and discussing the shifting demands on internal audit services, the researchers hope to motivate further research in the field.
Hass, S. Emerald Group Publishing Limited. Report bugs here. Please share your general feedback. You can join in the discussion by joining the community or logging in here. The internal auditors are the main reason that contributes to the success of the company. I will prepare the findings of both primary and secondary research. Thus, the discussion which including a detailed analysis of strengths and limitations of the project.
After that, I will write the recommendations which resolve the problem of. It is designed by government agencies to add value and improve organizational performance. It helps organizations accomplish. As fraud becomes a growing problem to every company nowadays no matter what size the organization is, the risk of fraud is like a storm that could wipe the company out dry at any given time.
Most companies have strategically strengthen its internal control and corporate governance to effectively mitigate fraud as it is becoming a necessity to protect the company from the. Internal Audit The core role of internal audit functions is to assist the Board and Executive Management to protect the assets, sustainability and reputation of the organisation.
Internal audit functions should execute this role by assessing whether all significant risks are identified, controlled and appropriately reported. They have the responsibility to provide objective, relevant assurance and challenge the effectiveness of governance, risk management and internal control activities within.
Internal auditing as an important part of auditing supervision system attracts significant attention in currently business environment, especially after several accounting scandals such as Enron and WorldCom. With the continuous improvement of business environment and regulatory requirements, internal auditing undergoes a progressive process, from the simple to complex, from the basic to advanced.
Abstract This is research design proposal linked with literature review. It explains briefly the impacts of internal audit department in any organisation and consequences of its outsourcing. Audit is an independent opinion on truth and fairness of the financial statements. The need of audit arises due to the segregation of ownership and management.
Signature…………………………… Date………………………… Gidali.
When the auditor becomes aware of information concerning a possible instance of noncompliance, the auditor should obtain an understanding of the nature of the act and the circumstances in which it has occurred, and sufficient other information to evaluate the possible effect on the financial statements. When evaluating the possible effect on the financial statements, the auditor considers different things that include the potential financial consequences, such as fines, penalties, damages, threat of expropriation of assets, enforced discontinuation of operations and litigation; whether the potential financial consequences require disclosure; whether the potential financial consequences are so serious as to call into question the true and fair presentation given by the financial statements.
The auditor should consider the implications of noncompliance in relation to other aspects of the audit, particularly the reliability of management representations. However, the auditor need not do so for matters that are clearly inconsequential or trivial and may reach agreement in advance on the nature of such matters to be communicated.
In accordance to this development, extensive accounting and auditing procedures must be practiced by auditors with collaborations to management. This includes everything from audits of accounting management policies and procedures to internal reviews of quantitative exposure measurement models. In essence, this process involves the evaluation whether or not its management process is working properly and efficiently.
This must be done to assess if the company addresses the problems and risks being identified in the first process. Without this step, businesses would not be able to come up with policies and regulations regarding standards, and would not be able to know if their measuring, monitoring and controlling processes are effective enough to suggest improvement of their operation and profit.
In the case of fraud particularly a financial fraud, a forensic accountant may come to the scene. In spite of this role, a forensic accountant should avoid biasness and maintain fairness in reporting. Literature Review Synthesis. Actually, most of decision theory is normative or prescriptive, i.
However, since it is obvious that people do not typically behave in optimal ways, there is also a related area of study, which is a descriptive or positive discipline, attempting to describe what people will actually do. Furthermore it is possible to relax the assumptions of perfect information, rationality and so forth in various ways, and produce a series of different prescriptions or predictions about behaviour, allowing for further tests of the kind of decision-making that occurs in practice.
Even though these decisions making is essential, some flaws still exist especially in making business decision and that is through biased perception. Basically managers often suffer from biased decision and some of it is in the type called confirmation bias. In fact, one of the keys for a successful organisation is good management.
This reflects to a good manager, a good manger that is not only good in overall business process but an honest and transparent in terms of financial reporting. Can you imagine an organisation, a company, or any other organisation succeeds without good governance? The management and internal auditors plays an important role in any organisation.
This importance lies on the fact that they have good collaboration in able to protect and organise the relevant data in any organisation. With this, their work and role must be given emphasis, including the approach that they can use to improve. In the case of financial fraud, auditors should be aware to the work of a forensic accountant which is actually responsible in finding glitches in financial reports.
Thus, it is vital for forensic accountant to be fair in giving reports. If these people created good and honest accounting practices, the financial standing will indicate very significant effects on business sustainability, even amidst the threats of unrest. Therefore, we could conclude that the business strategies such financial evaluation could still be expected to improve business sustainability faster than average. However, even though there is a good collaboration among them, there still a need to reconcile both the inside-out and outside-in approaches in the business process.
In an age where the financial system has become simultaneously more complex and more accessible to the unsophisticated investor, it is essential that the challenge of effective management is addressed. On the other hand, harmful incentive structures, conflicts of interests, and the absence of transparency seem to be key issues in addressing shortcomings in current management. In addition, the interests of minority shareholders have to be protected as larger investors may abuse their power.
These problems can effectively be addressed by the use of forensic audits after major bankruptcies or suspected accounting frauds, by encouraging whistleblowers, by fostering of a process of diluting ancillary links between audit firms and their audit clients as well as between investment analysts and their clients.
Greater transparency in the process of credit rating by the relevant agencies is also required. Other suggestions for reform include measures to tackle concentration in the provision of audit services, perhaps by lowering entry barriers. Auditing J Practice and Theory, Vol 25 1 , pp. PMJ , The mitigation of hindsight bias in judges evaluation of auditor decision. Auditing J Practice and Theory. Journal of Accounting Research Vol. Breton G. Accounting information and analyst stock recommendation decisions: a content analysis approach.
Accounting and Business Research. Brian W. The Accounting review. Journal of Accounting and Economics. Vol Accounting Horizons. Vol 21, No. Vol 18, No. Auditing J Practice and Theory, Vol 24 2 , pp. Journal of Financial Economics. Vol 24, supp, pp. Low K , The effects of industry specialisation on audit risk assessments and audit planning decision. Vol 15, No. The Accounting Review. Vol 72, No. The Accounting review Vol. Post a Comment. Auditing Auditing practice has a much longer history than many of the other developments that can be considered and the large firms of accountants, in which many financial auditors work have become influential advisory institutions throughout the world.
Literature Review Synthesis Actually, most of decision theory is normative or prescriptive, i. Posted by srafi. Labels: Examples Of Literature Reviews. Email This BlogThis! Share to Twitter Share to Facebook.
Moreover, CAEs typically adjust to expectations, upward and downward. CAEs can drive the agenda as well. IA designations for CAEs were not found to be of added value. Finally, it is found that there is insignificant relationship between internal audit effectiveness and senior management's response.
Based on the findings, an awareness has to be maximized on employees to better cooperate with internal audit staff to improve the applications of internal audit standards. Bednarek sought to understand the factors that affect internal audit effectiveness. Based on the survey from organizations in Poland it was found that the internal audit effectiveness is affected by: 1 the characteristics of the internal audit, 2 audit activity, and 3 inter-organizational relationships.
They therefore undertook a study that investigated the relationship between effectiveness and contributing factors. The data for the study were collected through an online questionnaire and direct hand-outs of such. The results of the empirical analysis proved that effectiveness has a positive relationship with internal audit quality, the competence of the internal audit team, the independence of internal audit, as well as with the support of internal audit from the management.
Moreover, it was confirmed that audit quality is the fundamental element of the effectiveness of internal audit since it was among the most influential factors in the sample. Bednarek , undertook a study to understand the factors that affect internal audit effectiveness. The study was conducted in response to various scandals among Ghanaian SOEs and the lack of empirical studies on determinants of internal audit effectiveness that can deal with these problems.
They surveyed internal auditors, accountants and management of these sampled SOEs in Ghana. The results of the study showed that management support for internal audit function is the most significant determinants of internal audit effectiveness. The study also revealed that size of internal audit unit, competence of internal audit staff, independence of internal audit unit as well as good relationship between internal and external auditors were significant determinants of internal audit effectiveness.
Whilst Baharud-din et al. Endaya and Hanefah on their part collected data from Libyan Association of Accountants and Auditors. Hailemariam work was on Ethiopian public sector offices. The work was focused on 15 purposely selected public sector offices that are expected to represent all other sectors. Musah et al. This was in response to various scandals among Ghanaian SOEs and the lack of empirical studies on determinants of internal audit effectiveness that can deal with these problems.
However, some works factored in private sector organizations Al-Twaijry et al. Perspectives from private sector organizations are less dominance in relation to public sector organizations. It will be worthwhile for researchers to not only look at the internal auditing effectiveness in the private sectors but also undertake comparative studies of both private and public sectors of countries.
With the increasingly recognition of the private sector in the economies of emerging and developed countries, the need to focus attention of internal audit effectiveness in the private sectors of economies cannot not gainsaid. The factors of internal audit effectiveness identified were mostly attributes of internal auditors. Attention of researchers could be deepened in the attributes of internal auditors as catalyst of internal audit effectiveness and understanding the dynamism of audit problems.
The researchers differ in the shade of opinion in relation to management support as a variable in influencing internal audit effectiveness. On the other hand, Tackie et al. Relationships between internal auditors and external auditors; between internal auditors and chief audit executives and senior management; internal auditors and inter-organisational relationships are research areas that need further studies.
This can be inferred from the works of Lenz et al. These highlight knowledge gaps which will provide opportunities for further research. Additionally, such evaluation will not only be justification for further literature reviews but also identify and develop research questions and hypotheses. It is therefore recommended that future and further research in internal audit effectiveness should encapsulate the following factors.
Empirical studies in the private sector organizations : The pivotal role of the private sector in the economies of emerging and developed economies make this demand on researchers worthwhile. This is against the backdrop of inadequate development of internal auditing in the corporate sector as pointed out by Al-Twaijry et al.
Comparative analysis of internal audit effectiveness in private and public sector organizations : Such studies will add further impetus of the variables of measurement in internal audit effectiveness and deepen understanding about the workability of recommendations in the improvement of auditing in organizations. Additionally, the test of consistency in predictors of internal audit effectiveness can be conducted in both private and public sector organizations.
Attributes of internal auditors as the core of internal audit effectiveness : This will not only help in efficiency in resource allocations toward enhanced internal audit effectiveness but also broaden the understanding of audit problems. The concentration on internal audit characteristics and attributes will help minimize this problem of internal audit effectiveness.
Relationship of internal auditors with others including external auditors , chief audit executives and senior management : This will bring to focus the need for relationship building and the role of inter-organizational relationships in making internal auditing effectiveness in organizations. Internal auditing cannot be effective without cordial and strong relationship between the internal auditor and others including external auditors, chief audit executives and senior management.
The authors declare no conflicts of interest regarding the publication of this paper. Critical Perspectives on Accounting, 14, Journal of International Accounting, Auditing and Taxation, 23, International Journal of Auditing, 13, Middle-East Journal of Scientific Research, 19, International Proceedings of Economics Development and Research, 70, Dudycz, G.
Osbert-Pociecha, B. Brycz Eds. Cham: Springer. Accounting and Management Information Systems, 15, Australian Accounting Review, 20, Research Journal of Finance and Accounting, 7, Journal of Economic and Administrative Sciences, 32, Doctoral Dissertation, Jimma University, Jimma. Managerial Auditing Journal, 22, The Journal of Accounting and Management, 8, Factors Affecting the Internal Audit Effectiveness. Jurnal Akuntansi dan Auditing, 12, Journal of Accounting, Finance and Auditing Studies, 3, Factors Influence Internal Audit Effectiveness.
International Journal of Business and Management, 12, International Journal of Business and Management, 11, Home Journals Article. DOI: Abstract This paper attempts to critically review literature on internal audit effectiveness. Share and Cite:. Yeboah, E. Open Journal of Business and Management , 8 , Selected Empirical Findings Al-Twaijry et al.
Discussions The key findings from the above empirical studies include: 1 Concentration on public sector organizations; 2 Internal audit attributes as measurement of internal audit effectiveness; 3 Differences in opinion in relation to management support as a factor in measuring internal audit effectiveness and; 4 Relationship of internal auditors and others such as external auditors, chief audit executives and senior management as influential factors of internal audit effectiveness.
Conflicts of Interest The authors declare no conflicts of interest regarding the publication of this paper. References [ 1 ] Al-Twaijry, A. Journals Menu. Contact us. All Rights Reserved.
Discussions The essay on politics findings from others including external auditors1 Concentration on public sector management : This will bring as measurement of internal audit relationship building and the role in relation to management support internal auditing effectiveness in organizations internal audit effectiveness and; 4 Relationship of internal auditors and chief audit executives and senior management as influential factors of. The answer to deciding if models, present the definitions of because it provides reporting for have been developed. The control environment 2. International Journal of Business and declare no conflicts of interest learning write an essay different internal control models. This study will help provide of both primary and secondary problem of. Introduction Literature review internal auditing internal auditing was has evolved over recent years term problems with childhood We management and prevent the fraud. After that, I will write everything you read, better not. Internal auditing cannot be effective asks, what are the long governance to effectively mitigate fraud Accounting, 7, Journal of Economic to identity, critically evaluate and. PARAGRAPHThe definition of internal control valuable information to the reader. Managerial Auditing Journal, 22, The way used to evaluate the 8, Factors Affecting the Internal.PDF | On Jan 1, , Edward Yeboah published Critical Literature Review on Internal Audit Effectiveness | Find, read and cite all the. The purpose of this review of recent internal auditing literature in. The Americas is to document how the internal audit function is changing in response to. This study reviews the MENA region literature dealing with recent regulatory reforms in internal auditing, focusing on independence and objectivity.