Search results for: audit fee lagrange multiplier test

Authors: Hussaini Bala

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There are different opinions in the literature on the relationship between Audit Committee characteristics and earnings management. The mix of opinions makes the direction of their relationship ambiguous. This study investigated the relationship between Audit Committee characteristics and earnings management of listed food and beverages Firms in Nigeria. The study covered the period of six years from 2007 to 2012. Data for the study were extracted from the Firms’ annual reports and accounts. After running the OLS regression, a robustness test was conducted for the validity of statistical inferences. The dependent variable was generated using two steps regression in order to determine the discretionary accrual of the sample Firms. Multiple regression was employed to run the data of the study using Random Model. The results from the analysis revealed a significant association between audit committee characteristics and earnings management of the Firms. While audit committee size and committees’ financial expertise showed an inverse relationship with earnings management, committee’s independence, and frequency of meetings are positively and significantly related to earnings management. In line with the findings, the study recommended among others that listed food and beverages Firms in Nigeria should strictly comply with the provision of Companies and Allied Matters Act (CAMA) and SEC Code of Corporate Governance on the issues regarding Audit Committees. Regulators such as SEC should increase the minimum number of Audit Committee members with financial expertise and also have a statutory position on the maximum number of Audit Committees meetings, which should not be greater than four meetings in a year as SEC code of corporate governance is silent on this.

Keywords: audit committee, earnings management, listed Food and beverages size, leverage, Nigeria

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Authors: Michaela Vašková

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The paper is focused on the application of the security audit method on the selected objects of the critical infrastructure. The emphasis is put on security audit method to find gaps in the critical infrastructure security. The theoretical part describes objects of the critical infrastructure. The practical part describes using the security audit method. The main emphasis was put on the protection of the critical infrastructure in the Czech Republic.

Keywords: crisis management, critical infrastructure, object of critical infrastructure, security audit, extraordinary event

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Authors: A. W. Gbolagade, M. O. Olayiwola, K. O. Kareem

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In this paper, further to our result on recent paper on the solution of nonlinear advection equations, we present further results on the nonlinear nonhomogeneous advection equations using a modified variational iteration method.

Keywords: lagrange multiplier, non-homogeneous equations, advection equations, mathematics

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Authors: Lajmi Azhaar, Yab Mdallelah

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This study examines the Tunisian market in which recent events, notably financial scandals, provide an appropriate framework for studying the impact of corporate governance on the audit report lag. Moreover, very little research has been done to examine this relationship in this context. The objective of this work is, therefore, to understand the factors influencing audit report lag, drawing primarily on agency theory (Jensen and Meckling, 1976), which shows that the characteristics of the board of directors have an impact on the report lag (independence, diligence, and size). In addition, the characteristics of the committee also have an impact on the audit report lag (size, independence, diligence, and expertise). Therefore, our research provides empirical evidence on the impact of governance mechanisms attributes on audit report lag. Using a sample of forty-seven (47) Tunisian companies listed on the Tunis Stock Exchange (BVMT) during the period from 2014 to 2019, and basing on the GMM method of the dynamic panel, multivariate analysis shows that most corporate governance attributes have a significant effect on audit report lag. Specifically, the audit committee diligence and the audit committee expertise have a significant and positive effect on audit report lag. But the diligence of the board has a significant and negative effect on audit report lag. However, this study finds no evidence that the audit committee independence, the size, independence, and diligence of the director’s board are associated with the audit report lag. In addition, the results of this study also show that there is a significant effect of some control variables. Finally, we are contributing to this study by using the GMM method of the dynamic panel. We are also using an emerging context that is very poorly developed and exploited by previous studies.

Keywords: governance mechanisms, audit committee, board of directors, audit report lag

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Authors: Abdulaziz Abdulsaleh

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This study aims at identifying the practices that should be taken into consideration by audit committees as a tool of corporate governance in Libyan commercial banks by investigating various perceptions on this topic. The study is based on a questionnaire submitted to audit committees ‘members at Libyan commercial banks, directors of internal audit departments as well as members of board of directors at these banks in addition to a number of external auditors and academic staff from Libyan universities. The study reveals that the role of audit committees has to be shifted from traditional areas of accounting to a broader role including functions related to financial reporting, audit planning, support the independence of internal and external auditors, acting as a channel of communication between external auditors and board of directors, reviewing external audit, and evaluating internal control systems. Although the study is a starting point in developing a framework of good audit committees’ practices in Libya, it is believed that the adoption of its results can result in enhancing the corporate governance practices not only in the banking sector but also in the entire corporate sector in Libya.

Keywords: audit committees, corporate governance, commercial banks, Libya

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Authors: Gil Bae, Seung Uk Choi, Jae Eun Lee, Joon Hwa Rho

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Using proprietary engagement partner identity information for the Big 4 audit firms in Korea over the 2001-2011 period, we find that expert engagement partners obtain significantly higher total compensation than do non-expert partners. Importantly, we also find that expert partners increase the number of audit hours compared to their non-expert counterparts. The hourly billing rate, calculated as total fees divided by total audit hours, of expert partners is not higher than that of non-expert partners, indicating that there is no expert partner premium reflected in the hourly rate. This finding suggests that the increase in total audit fees is attributable mainly to the increase in the quantity of audit hours that expert partners work, not from the higher fee per hour. The results are not attributable to auditor selection bias.

Keywords: industry expert partners, expert premiums, audit hours, hourly charge rate

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Authors: Ashkan Mirzay Fashami

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This study examines the effects of auditor switch, auditee’s industry, and auditee’s location on audit fees in Australia. It uses fee data of Australian Securities Exchange 500 companies, considering all industry classifications throughout the country from 2006 until 2016. Main findings show that auditor switch does not affect audit fees. However, auditee’s industry affects audit fees. This effect occurs in information technology, financials, energy, and materials sectors among the top 500 companies. Financials, energy, and materials sectors face a fee rise, whereas information technology has a fee cut. The extent of fee changes is different among various industries, wherein the financial sector has the highest increase. Further, auditee’s location affects audit fees. Top 500 companies in Hobart, Perth, and Brisbane face a fee reduction, wherein the highest cut is in Hobart. Further analysis suggests that the Australian audit market is being increasingly concentrated in the hands of the Big Four audit firms.

Keywords: audit, auditor switch, Australia, fee, low-balling

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Authors: Hsiao-Wen Wang

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The split-share structure reform in China represents one of the most significant milestones in the evolution of the capital market. With the goal of converting non-tradable shares into tradable shares, the reform laid the foundation and supported the development of full-scale privatization. This study explores China’s split-share structure reform and its impact on statutory audit fees. This study finds that auditors earn a significant statutory audit fee premium after the split-share structure reform. The Big 4 auditors who provide better audit quality receive higher statutory audit fee premium than non-Big 4 auditors after the share reform, which is attributable to their brand reputation, rather than the relative market dominance.

Keywords: chinese split-share structure reform, statutory audit fees, big-4 auditors, corporate governance

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Authors: A. Benbouali, H. Saidi, A. Derrouazin, T. Bessaad

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Aerial robotics is a very exciting research field dealing with a variety of subjects, including the attitude control. This paper deals with the control of a four rotor vertical take-off and landing (VTOL) Unmanned Aerial Vehicle. The paper presents a mathematical model based on the approach of Lagrange for the flight control of an autonomous quad-rotor. It also describes the controller architecture which is based on PID regulators. The control method has been simulated in closed loop in different situations. All the calculation stages and the simulation results have been detailed.

Keywords: quad-rotor, lagrange approach, proportional integral derivate (PID) controller, Matlab/Simulink

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Authors: A. Haddick, A. Soltan

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Background: During the period of recovery from an operative obstetric procedure, a woman is not only at risk of the life-threatening complications accompanying labour but also those associated with surgery and anaesthesia. It is speculated that women in the recovery area may receive a lower standard of care over a night shift. Thus obstetric recovery room care should be evaluated regularly to ensure all women receive an equally high standard of care 24/7. Aim: The aim of this audit was to undertake an audit in the Liverpool Women’s Hospital on the care in recovery, and to ascertain the extent to which the standards were met. This audit included the full audit cycle. Method: Standards were taken from the AAGBI, RCOA, NICE and CNST guidelines. There were 12 standards including appropriate documentation of vital signs and appropriate length of stay after surgery. Notes from 100 patients were analysed from March 2011-March 2012. There were 52 day notes and 48 night notes; these were accessed to gain the relevant data. In the re audit 35 notes were accessed from March 14-September 14. Results: The Liverpool Women’s Hospital met in total 10 of these standards. 10 were met during the day shift (83%) and 0 met during the night shift. In the re audit, there was a significant improvement in the standards met at night. 9 of the standards were met during the day and 7 of the standards were met at night. Clearly there are still improvements to be made. Conclusions: In the original audit, an audit action plan was formulated. This was following discussion of the results of this audit in an MDT meeting and presentation with a consultant Obstetrician, the head of Midwifery, the head of Obstetrics theatres and a recovery nurse. This audit will be further discussed in the Liverpool Woman's Hospital in July 2015 for further implementation for improvement.

Keywords: care, recovery, room, women

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Authors: Fethi Soltani, Adel Almarashi, Idir Mechai

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Tikhonov regularization and reproducing kernels are the most popular approaches to solve ill-posed problems in computational mathematics and applications. And the Fourier multiplier operators are an essential tool to extend some known linear transforms in Euclidean Fourier analysis, as: Weierstrass transform, Poisson integral, Hilbert transform, Riesz transforms, Bochner-Riesz mean operators, partial Fourier integral, Riesz potential, Bessel potential, etc. Using the theory of reproducing kernels, we construct a simple and efficient representations for some class of Fourier multiplier operators Tm on the Paley-Wiener space Hh. In addition, we give an error estimate formula for the approximation and obtain some convergence results as the parameters and the independent variables approaches zero. Furthermore, using numerical quadrature integration rules to compute single and multiple integrals, we give numerical examples and we write explicitly the extremal function and the corresponding Fourier multiplier operators.

Keywords: fourier multiplier operators, Gauss-Kronrod method of integration, Paley-Wiener space, Tikhonov regularization

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Authors: M. O. Olayiwola

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Numerical solutions of the generalized Burger-Fisher are obtained using a Modified Variational Iteration Method (MVIM) with minimal computational efforts. The computed results with this technique have been compared with other results. The present method is seen to be a very reliable alternative method to some existing techniques for such nonlinear problems.

Keywords: burger-fisher, modified variational iteration method, lagrange multiplier, Taylor’s series, partial differential equation

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Authors: M. El Mousadik, F. Elkandoussi

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The concern for increased rigor in social management has led more and more Moroccan business leaders to question the value of applying social audit as an essential tool in the management of human resources. Hotel companies are not excluded; in fact, they are expected to implement such an audit to develop sound and credible human resources management (HRM) policies. The main objective of this paper is to establish the relationship between the practice of social audit as a tool, and its impact on the tourism sector, especially on hotels at one of the Morocco’s first and most popular city for tourism, Agadir. This exploratory study of properties in Agadir has revealed that hotel executives are aware of the importance of social auditing to hone their decisions in the field of HRM.

Keywords: social audit, hotel companies, human resources management, social piloting

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Authors: Sana Masmoudi Mardassi, Yosra Makni Fourati

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Regulators highlight the importance of the Audit Committee (AC) as a key internal corporate governance mechanism. One of the most important roles of this committee is to oversee the financial reporting process. The purpose of this paper is to examine the link between the characteristics of an audit committee and the financial reporting quality by investigating whether the characteristics of audit committees are associated with improved financial reporting quality, especially the Real Earnings Management. In the current study, a panel data from 80 nonfinancial companies listed on the Amsterdam Stock Exchange during the period between 2010 and 2017 were used. To measure audit committee characteristics, four proxies have been used, specifically, audit committee independence, financial expertise, gender diversity and AC meetings. For this research, a linear regression model was used to identify the influence of a set of board characteristics of the audit committee on real earnings management after controlling for firm audit committee size, leverage, size, loss, growth and board size. This research provides empirical evidence of the association between audit committee independence, financial expertise, gender diversity and meetings and Real Earnings Management (REM) as a proxy of financial reporting quality. The study finds that independence and AC Gender diversity are strongly related to financial reporting quality. In fact, these two characteristics constrain REM. The results also suggest that AC- financial expertise reduces to some extent, the likelihood of engaging in REM. These conclusions provide support then to the audit committee requirement under the Dutch Corporate Governance Code rules regarding gender diversity and AC meetings.

Keywords: audit committee, financial expertise, independence, real earnings management

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Authors: Daniela Monteiro

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Considering the entry into force of the new EU audit reform regarding statutory auditors, in effect in all member states since 2016, this research aims to identify which audit regulation rules are associated with a high-level audit quality on both its dimensions, i.e., the actual quality and the perceived quality, in relation to public interest entities, within the European Union, and whether those rules have the same impact on both dimensions. Its measurement was based on the following proxies: the quality of financial information through earnings management and the impact of qualified opinions on financial costs. We considered in the research regulation subjects such as auditors’ rotation and provision of services (NAS) and also the level of market concentration. The criteria to include these issues in the research was its contemplation of the new rules. We studied the period before the audit reform (2009-2015) when the regulation measures were less uniform. Besides the consideration of both dimensions of audit quality and several regulation measures, we believe our conclusions configure an important contribution to this research field, considering the involvement of the first 15 member states of the European Union. The results consolidate the assumption that the balance between competence and independence is not the only challenge related to the regulation of the audit profession. The evidence demonstrates that the balance between actual and perceived quality is also a relevant matter. The major conclusion is that the challenge is to keep balanced both actual and perceived audit quality whilst ensuring the independence and competence of auditors.

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Authors: Arpine Maghakyan

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The purpose of this paper is to study the relationship between the level of industry digitalization and audit fees, especially, the relationship between Big 4 auditor fees and industry digitalization level. On the one hand, automation of business processes decreases internal control weakness and manual mistakes; increases work effectiveness and integrations. On the other hand, it may cause serious misstatements, high business risks or even bankruptcy, typically in early stages of automation. Incomplete automation can bring high audit risk especially if the auditor does not fully understand client’s business automation model. Higher audit risk consequently will cause higher audit fees. Higher audit fees for clients with high automation level are more highlighted in Big 4 auditor’s behavior. Using data of US firms from 2005-2015, we found that industry level digitalization is an interaction for the auditor quality on audit fees. Moreover, the choice of Big4 or non-Big4 is correlated with client’s industry digitalization level. Big4 client, which has higher digitalization level, pays more than one with low digitalization level. In addition, a high-digitalized firm that has Big 4 auditor pays higher audit fee than non-Big 4 client. We use audit fees and firm-specific variables from Audit Analytics and Compustat databases. We analyze collected data by using fixed effects regression methods and Wald tests for sensitivity check. We use fixed effects regression models for firms for determination of the connections between technology use in business and audit fees. We control for firm size, complexity, inherent risk, profitability and auditor quality. We chose fixed effects model as it makes possible to control for variables that have not or cannot be measured.

Keywords: audit fees, auditor quality, digitalization, Big4

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Authors: Adel M. Qatawneh

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This paper aimed to determine the importance of knowledge innovation for external audit on anti-corruption in the entire Jordanian bank companies are listed in Amman Stock Exchange (ASE). The study importance arises from the need to recognize the Knowledge innovation for external audit and anti-corruption as the development in the world of business, the variables that will be affected by external audit innovation are: reliability of financial data, relevantly of financial data, consistency of the financial data, Full disclosure of financial data and protecting the rights of investors to achieve the objectives of the study a questionnaire was designed and distributed to the society of the Jordanian bank are listed in Amman Stock Exchange. The data analysis found out that the banks in Jordan have a positive importance of Knowledge innovation for external audit on anti-corruption. They agree on the benefit of Knowledge innovation for external audit on anti-corruption. The statistical analysis showed that Knowledge innovation for external audit had a positive impact on the anti-corruption and that external audit has a significantly statistical relationship with anti-corruption, reliability of financial data, consistency of the financial data, a full disclosure of financial data and protecting the rights of investors.

Keywords: knowledge innovation, external audit, anti-corruption, Amman Stock Exchange

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Authors: Sana Masmoudi, Yosra Makni

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Regulators highlight the importance of the Audit Committee (AC) as a key internal corporate governance mechanism. One of the most important roles of this committee is to oversee the financial reporting process. The purpose of this paper is to examine the link between the characteristics of an audit committee and the financial reporting quality by investigating whether the formation of audit committees and their characteristics are associated with improved financial reporting quality. This study provides empirical evidence of the association between audit committee independence, financial expertise, gender diversity, and meetings and Real Earnings Management (REM) as a proxy of financial reporting quality. Using data from, with a sample of 80 companies listed on the Amsterdam Stock Exchange during 2010-2017, the study finds that independence and AC Gender diversity are strongly related to financial reporting quality. In fact, these two characteristics constrain REM. The results also suggest that AC-financial expertise reduces to some extent, the likelihood of engaging in REM. These conclusions provide support then to the audit committee requirement under the Dutch Corporate Governance Code rules regarding gender diversity and AC meetings.

Keywords: audit committee, financial expertise, independence, real earnings management

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Authors: Satinder Bhatia

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Limited Liability Partnerships (LLPs) was a concept introduced in India in 2009. Ever since then, there has been a fierce growth in the number of organizations registered as LLPs outpacing the number of registrations as private companies. Among other benefits extended to LLPs, the audit being mandated only for LLPs having a turnover of at least Rs 40 lakhs or capital contribution of Rs 25 lakhs, has been a major attraction. This has resulted in only about 10 per cent of LLPs coming under mandatory audit. Even for such companies, the accounting standards to be followed in the preparation of financial statements have not been specified. The Revised Indian Accounting Standards (Revised IndAS) which are aligned with IFRS to a great extent, may apply to LLPs only under limited conditions. Thus, the veracity of even the audited financial statements of LLPs can be questioned. If in future, these LLPs would like to list on a stock exchange to raise capital, there can be serious hurdles if investors do not find the financial statements to be reliable and consistent. LLPs are generally governed by country-specific rules in the area of accounts and audit. Thus, such rules vary across UK, EU and the USA. Some countries have adopted the IFRS for SMEs and since LLPs can be referred to as SMEs; they would come under the ambit of these IFRS provisions. Besides, as the scope of audit widens to cover qualitative information in addition to quantitative data, audit of LLPs has now acquired a new meaning and a new urgency as demands for at least limited purpose audits are arising from different stakeholders including lenders, suppliers, customers and joint venture partners.

Keywords: audit disclosures, audit quality, guidance for SMEs, non-audit services

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Authors: Prateep Wajeetongratana

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This research aims to study the audit quality that affected to the reputation of the certified public accountants in Thailand. The researcher defined the population for this research as a group of the certified public accountants in Thailand who are the member of the federation of accounting professions under the royal patronage of his majesty the king also disclose their information .The total sampling size is 325. The results showed the audit quality factor has influence to the reputation of the certified public accountants in Thailand by accuracy auditing, objectiveness auditing and clearness auditing .These factors show by y1 = 1.381 + .372x1.1 + .309x1.2 + .305x1.3 can be describe as professional standard strictly factor (Y.1.1) and the new clients raised from word of mount of old clients regularly factor (Y.1.2) by regression coefficient (R2) as.242, this shows that such variables could predict the audit quality variable as 24.2 percent.

Keywords: audit quality, certified public accountants in Thailand, reputation

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Authors: Chiou-Yng Lee, Wen-Yo Lee, Chieh-Tsai Wu, Cheng-Chen Yang

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Shifted polynomial basis (SPB) is a variation of polynomial basis representation. SPB has potential for efficient bit-level and digit-level implementations of multiplication over binary extension fields with subquadratic space complexity. For efficient implementation of pairing computation with large finite fields, this paper presents a new SPB multiplication algorithm based on Karatsuba schemes, and used that to derive a novel scalable multiplier architecture. Analytical results show that the proposed multiplier provides a trade-off between space and time complexities. Our proposed multiplier is modular, regular, and suitable for very-large-scale integration (VLSI) implementations. It involves less area complexity compared to the multipliers based on traditional decomposition methods. It is therefore, more suitable for efficient hardware implementation of pairing based cryptography and elliptic curve cryptography (ECC) in constraint driven applications.

Keywords: digit-serial systolic multiplier, elliptic curve cryptography (ECC), Karatsuba algorithm (KA), shifted polynomial basis (SPB), pairing computation

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Authors: Ammar Ayad Issa Al-Rifaie, Zuhreya Muazu, Maysam Ali Abdulwahid, Dermot Gleeson

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The aim of this audit was to examine the efficiency of alcohol history documentation and screening for hazardous drinkers at the Medical Admission Unit (MAU) of Northern General Hospital (NGH), Sheffield, to identify any potential for enhancing clinical practice. Data were collected from medical clerking sheets, ICE system and directly from 82 patients by three junior medical doctors using both CAGE questionnaire and AUDIT-C tool for newly admitted patients to MAU in NGH, in the period between January and March 2015. Alcohol consumption was documented in around two-third of the patient sample and this was documented fairly accurately by health care professionals. Some used subjective words such as 'social drinking' in the alcohol units’ section of the history. CAGE questionnaire was applied to only four patients and none of the patients had documented advice, education or referral to an alcohol liaison team. AUDIT-C tool had identified 30.4%, while CAGE 10.9%, of patients admitted to the NGH MAU as hazardous drinkers. The amount of alcohol the patient consumes positively correlated with the score of AUDIT-C (Pearson correlation 0.83). Re-audit is planned to be carried out after integrating AUDIT-C tool as labels in the notes and presenting a brief teaching session to junior doctors. Alcohol misuse screening is not adequately undertaken and no appropriate action is being offered to hazardous drinkers. CAGE questionnaire is poorly applied to patients and when satisfactory and adequately used has low sensitivity to detect hazardous drinkers in comparison with AUDIT-C tool. Re-audit of alcohol screening practice after introducing AUDIT-C tool in clerking sheets (as labels) is required to compare the findings and conclude the audit cycle.

Keywords: alcohol screening, AUDIT-C, CAGE, hazardous drinking

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Authors: Wiji Wijaya

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The aim of this research is to examine the effect of internal control weaknesses and audit opinion on the state’s loss findings of audit compliance to the regulation in public sector. The samples of this research consisted of 175 local government financial statements in the area of Central Java Province at 2009 until 2013. Area sampling design was used to select the financial statements. This study using quantitative descriptive statistical analysis and regression was run for data analysis and hypothesis examination. Result of this study indicated that internal control weaknesses and audit opinion contributes a positive influence which is significant to the state’s loss findings of audit compliance to the regulation. The internal control weaknesses that affect the state's loss finding are weakness control system of accounting and reporting with the value of the critical ratio 0.010 p 2.613 ; weakness budget execution control system with critical ratio value of 3.421 p 0.001 and weaknesses internal control structure with critical ratio value of 2.246 p 0.026 . While the audit opinion with a critical ratio value of 4.401 p 0.000. The implications of this research so that policy makers at the local government should give more attention to the implementation and improvement of internal control system.

Keywords: audit compliance findings, state’s loss, audit opinion, internal control, local government

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Authors: Anxuan Xie, Chun-Chan Yu

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Survey evidence provides support that auditors can gain professional knowledge not only from client firms but also from teammates they work with. Furthermore, given that knowledge is accumulated in nature, along with the reality that auditors today must work in an environment of increased diversity, whether the attributes of teammates will influence the effects of knowledge sharing and accumulation and ultimately influence an audit partner’s audit quality should be interesting research issues. We test whether the gender of co-signers will moderate the effect of a lead partner’s cooperative experiences on financial restatements. Furthermore, if the answer is “yes”, we further investigate the underlying reasons. We use data from Taiwan because, according to Taiwan’s law, engagement partners, who are basically two certificate public accountants from the same audit firm, are required to disclose (i.e., sign) their names in the audit report of public companies since 1983. Therefore, we can trace each engagement partner’s historic direct cooperative (co-signing) records and get large-sample data. We find that the benefits of knowledge sharing manifest primarily via co-signing audit reports with audit partners of different gender from the lead engagement partners, supporting the argument that in an audit setting, accumulated gender-diverse working relationship is positively associated with knowledge sharing, and therefore improve lead engagements’ audit quality. This study contributes to the extant literature in the following ways. First, we provide evidence that in the auditing setting, the experiences accumulated from cooperating with teammates of a different gender from the lead partner can improve audit quality. Given that most studies find evidence of negative effects of surface-level diversity on team performance, the results of this study support the prior literature that the association between diversity and knowledge sharing actually hinges on the context (e.g., organizational culture, task complexity) and “bridge” (a pre-existing commonality among team members that can smooth the process of diversity toward favorable results) among diversity team members. Second, this study also provides practical insights with respect to the audit firms’ policy of knowledge sharing and deployment of engagement partners. For example, for audit firms that appreciate the merits of knowledge sharing, the deployment of auditors of different gender within an audit team can help auditors accumulate audit-related knowledge, which will further benefit the future performance of those audit firms. Moreover, nowadays, client firms also attach importance to the diversity of their engagement partners. As their policy goals, lawmakers and regulators also continue to promote a gender-diverse working environment. The findings of this study indicate that for audit firms, gender diversity will not be just a means to cater to those groups. Third, for audit committees or other stakeholders, they can evaluate the quality of existing (or potential) lead partners by tracking their co-signing experiences, especially whether they have gender-diverse co-signing experiences.

Keywords: co-signing experiences, audit quality, knowledge sharing, gender diversity

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Authors: Douglas F. Prawitt, Nathan Y. Sharp, David A. Wood

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Consistent with prior experimental and survey studies, we find that IAFs that spend more time directly assisting the external auditor is associated with lower external audit fees. Interestingly, we do not find evidence that external auditors reduce fees based on work previously performed by the IAF. We also find that the time spent assisting the external auditor has a greater negative effect on external audit fees than the time spent performing tasks upon which the auditor may rely but that are not performed as direct assistance to the external audit. Our results also show that previous proxies used to measure this relation is either not associated with or are negatively associated with our direct measures of how the IAF can contribute to the external audit and are highly positively associated with the size and the complexity of the organization. Thus, we conclude the disparate experimental and archival results may be attributable to issues surrounding the construct validity of measures used in previous archival studies and that when measures similar to those used in experimental studies are employed in archival tests, the archival results are consistent with experimental findings. Our research makes four primary contributions to the literature. First, we provide evidence that internal auditing contributes to a reduction in external audit fees. Second, we replicate and provide an explanation for why previous archival studies find that internal auditing has either no association with external audit fees or is associated with an increase in those fees: prior studies generally use proxies of internal audit contribution that do not adequately capture the intended construct. Third, our research expands on survey-based research (e.g., Oil Libya sh.co.) by separately examining the impact on the audit fee of the internal auditors’ work, indirectly assisting external auditors and internal auditors’ prior work upon which external auditors can rely. Finally, we extend prior research by using a new, independent data source to validate and extend prior studies. This data set also allows for a sample of examining the impact of internal auditing on the external audit fee and the use of a more comprehensive external audit fee model that better controls for determinants of the external audit fee.

Keywords: internal audit, contribution, external audit, function

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Authors: Nithiya C., Komathi B. J., Praveena N. G., Samuda Prathima

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At present, the ultimate aim in digital system designs, especially at the gate level and lower levels of design abstraction, is power optimization. Adders are a nearly universal component of today's integrated circuits. Most of the research was on the design of high-speed adders to execute addition based on various adder structures. This paper discusses the ideal path for selecting an arithmetic unit for IoT applications. Based on the analysis of eight types of 16-bit adders, we found out Carry Look-ahead (CLA) produces low power. Additionally, multiplier and accumulator (MAC) unit is implemented with the Booth multiplier by using the low power adders in the order of preference. The design is synthesized and verified using Synopsys Design Compiler and VCS. Then it is implemented by using Cadence Encounter. The total power consumed by the CLA based booth multiplier is 0.03527mW, the total area occupied is 11260 um², and the speed is 2034 ps.

Keywords: carry look-ahead, carry select adder, CSA, internet of things, ripple carry adder, design rule check, power delay product, multiplier and accumulator

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Authors: Shuofen Hsu, Ya-Yi Chao, Chao-Wei Li

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This paper investigates the relationship between voluntary audit (hereafter, VA) of semi-annual consolidated financial statements decision and accounting conservatism. In general, there are four kinds of auditors' assurance services, which include audit, review, agreed-upon procedure and compliance engagements base on degree of assurance. The VA work by auditors may not only have the higher audit quality but an important signal of more reliable information than the review work. In Taiwan, The listed companies must prepare the semi-annual consolidated financial statements and with auditors' review before 2012, but some of the listed companies choose the assurance work from review to audit voluntarily. Due to the adoption of International Financial Reporting Standards, the listed companies were required to prepare the second quarterly consolidated financial statements which should be reviewed by auditors since 2013. This rule will change some of the assurance work from audit to review by auditors, and the information asymmetry maybe increased. To control the selection bias, we use two-stage model to test the relationship between VA decision and accounting conservatism. Our empirical results indicate that the VA decision and accounting conservatism have a significant positive relationship in firms with family-controlled. That is, firms with family-controlled are more likely to do VA and to prepare more conservative consolidated financial statements to reduce the information asymmetry, meaning that there is a complementary effect between VA and accounting conservatism for firms with more information asymmetry. But on the contrary, we find that the VA decision and accounting conservatism have a significant negative relationship in firms with professional managers-controlled, meaning that there is a substitution effect between VA and accounting conservatism for firms with less information asymmetry. Finally, the accounting conservatism of consolidated financial statements decrease after the adoption of IFRSs (International Financial Reporting Standards) in Taiwan. It means that the disclosure and transparency of consolidated financial statements had be improved.

Keywords: voluntary audit, accounting conservatism, audit quality, information asymmetry

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Authors: Joel S. Akintayo, Ramat T. Salman

Abstract:

The stakeholders’ pressure on corporate managers to maintain firm’s profitability has created economic incentives for management to engage in earnings management practices. Therefore, this study examines the effects of audit quality and corporate governance on earnings management of quoted deposit money banks (DMBs) in Nigeria. This study specifically investigates the influence of audit tenure, audit fee, board independence, and board size on earnings management of DMBs. Explanatory research design was employed in carrying out the study while secondary data were sourced from the annual reports and accounts of all the 15 quoted DMBs in Nigerian Stock Exchange as at December 31, 2015 for a period of 10 years covering from 2006 to 2015. The data obtained for the study were analyzed using panel regression analysis approach. The findings reveal that board independence has a negative significant effect on earnings management at a 5% level of significance (p=0.002), while audit fee has a positive significant effect on earnings management at a 5% level of significance (p=0.013) and audit tenure has a negative significant effect on earnings management of DMBs at a 5% level of significance (p=0.003). Surprisingly, board size was statistically not significant at a 5% level of significance (p=0.086). The study concludes that high audit quality and sound corporate governance could improve the earnings quality of DMBs. Hence, the study recommends that the authorities saddled with the responsibility of banking supervision in Nigeria such the Securities and Exchange Commission (SEC) and CBN to advise the National Assembly in Nigeria to pass into law the three years professional requirement for audit tenure.

Keywords: audit quality, audit tenure, audit fee, board independence, corporate governance, earnings management

Procedia PDF Downloads 164

Authors: Khawla Hlel

Abstract:

Purpose: This study aims to examine whether critical audit matters (CAM) affect financial information quality. We also investigate the moderating role of the audit committee on the association between CAM and financial information quality. Design/Methodology/Approach: The analysis is based on GLS and GMM regressions explaining the absolute value of discretionary accruals by using 52 Tunisian listed firms on the Tunisia Stock Exchange (TSE) for the period 2017-2020. Findings: We find evidence that managers react to the CAM by increasing the quality of financial disclosures. This study provides insights into how a change in the auditor’s report model might impact the quality of financial information. It suggests that external auditors and audit committees serve as a beneficial mechanism for enhancing financial information quality by reducing information asymmetry. In addition, our results indicate that CAM is an efficient monitoring mechanism that increases financial reporting quality and supervises managers. Originality: This study is important for potential investors who should assess CAM when evaluating firms. Furthermore, the authors expect the findings to be interesting to firms, as this study highlights the effectiveness of the auditor in reducing managerial opportunistic behavior and improving information quality. The results could encourage audit regulators to ameliorate the standards, as this research reinforces the role of the auditor in increasing the quality of financial disclosure by offering the required information for shareholders.

Keywords: critical audit matters, audit committee, information quality, Tunisian firms

Procedia PDF Downloads 61

Authors: Dia I. Abu-Al-Nadi, M. J. Mismar, T. H. Ismail

Abstract:

A technique for estimating the direction-of-arrival (DOA) of unknown number of source signals is presented using the eigen-approach. The eigenvector corresponding to the minimum eigenvalue of the autocorrelation matrix yields the minimum output power of the array. Also, the array polynomial with this eigenvector possesses roots on the unit circle. Therefore, the pseudo-spectrum is found by perturbing the phases of the roots one by one and calculating the corresponding array output power. The results indicate that the DOAs and the number of source signals are estimated accurately in the presence of a wide range of input noise levels.

Keywords: array signal processing, direction-of-arrival, antenna arrays, Eigenvalues, Eigenvectors, Lagrange multiplier

Procedia PDF Downloads 310