Commenced in January 2007
Frequency: Monthly
Edition: International
Paper Count: 1363

Search results for: Internal Audit Unit

1363 The Role of the Internal Audit Unit in Detecting and Preventing Fraud at Public Universities in West Java, Indonesia

Authors: Fury Khristianty Fitriyah

Abstract:

This study aims to identify the extent of the role of the Satuan Pengawas Intern (Internal Audit Unit) in detecting and preventing fraud in public universities in West Java under the Ministry of Research, Technology and Higher Education. The research method applied was a qualitative case study approach, while the unit of analysis for this study is the Internal Audit Unit at each public university. Results of this study indicate that the Internal Audit Unit is able to detect and prevent fraud within a public university environment by means of red flags to mark accounting anomalies. These stem from inaccurate budget planning that prompts inappropriate use of funds, exacerbated by late disbursements of funds, which potentially lead to fictitious transactions, and discrepancies in recording state-owned assets into a state property management system (SIMAK BMN), which, if not conducted properly, potentially causes loss to the state.

Keywords: Internal Audit Unit, efficiency, fraud, public university.

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1362 Operations Research Applications in Audit Planning and Scheduling

Authors: Abdel-Aziz M. Mohamed

Abstract:

This paper presents a state-of-the-art survey of the operations research models developed for internal audit planning. Two alternative approaches have been followed in the literature for audit planning: (1) identifying the optimal audit frequency; and (2) determining the optimal audit resource allocation. The first approach identifies the elapsed time between two successive audits, which can be presented as the optimal number of audits in a given planning horizon, or the optimal number of transactions after which an audit should be performed. It also includes the optimal audit schedule. The second approach determines the optimal allocation of audit frequency among all auditable units in the firm. In our review, we discuss both the deterministic and probabilistic models developed for audit planning. In addition, game theory models are reviewed to find the optimal auditing strategy based on the interactions between the auditors and the clients.

Keywords: Operations research applications, audit frequency, audit planning, audit-staff scheduling.

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1361 Corporate Governance Role of Audit Committees in the Banking Sector: Evidence from Libya

Authors: Abdulaziz Abdulsaleh

Abstract:

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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1360 The Role and Effectiveness of Audit Committee in Corporate Governance of Credit Institutions

Authors: Tina Vuko, Marija Maretić, Marko Čular

Abstract:

The aim of this study is to analyze the role and effectiveness of internal mechanism (audit committee) of corporate governance on credit institutions performance in Croatia. Based on research objective, sample of 78 credit institutions listed on Zagreb Stock Exchange, from 2007 to 2012, has been collected and efficiency index of audit committee (EIAC) has been created. Based on the sample and created EIAC, conclusions are as follows: audit committees of credit institutions have medium efficiency, based on EIAC measurement; there is a significant difference in audit committee effectiveness, in observed period; there is no positive relationship between audit committee effectiveness and credit institution performance; there is a significant difference between level of audit committee effectiveness and audit firm type. Future research should contain increased number of elements in EIAC creation and increased sample, for all obligators who need to establish audit committee.

Keywords: Corporate Governance, Audit Committee, Financial Institutions, Efficiency Index of Audit Committee.

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1359 Effective Internal Control System in the Nasarawa State Tertiary Educational Institutions for Efficiency: A Case of Nasarawa State Polytechnic, Lafia

Authors: Ibrahim Dauda Adagye

Abstract:

Effective internal control system in the bursary unit of tertiary educational institutions is geared toward achieving quality teaching, learning and research environment and as well assist the management of the institutions, particularly when decisions are to be made. While internal control system exists in all institutions, the outlined objectives above are far from being achieved. The paper therefore assesses the effectiveness of internal control system in tertiary educational institutions in Nasarawa State, Nigeria with specific focus on the Nasarawa State Polytechnic, Lafia. The study is survey, hence a simple closed ended questionnaire was developed and administered to a sample of twenty seven (27) member staff from the Bursary and the Internal audit unit of the Nasarawa State Polytechnic, Lafia so as to obtain data for analysis purposes and to test the study hypothesis. Responses from the questionnaire were analysed using a simple percentage and chi square. Findings shows that the right people are not assigned to the right job in the department, budget, and management accounting were never used in the institution’s operations and checking of subordinate by their superior officers is not regular. This renders the current internal control structure of the Polytechnic as ineffective and weak. The paper therefore recommends that: transparency should be seen as significant, as the institution work toward meeting its objectives, it therefore means that the right staff be assigned the right job and regular checking of the subordinates by their superiors be ensued.

Keywords: Bursary unit, efficiency, Internal control, tertiary educational institutions.

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1358 Transparency of Audit Firms in Croatia

Authors: Marko Čular

Abstract:

The aim of this paper is to raise general awareness of transparency importance for audit firms and for audit services’ users. This paper analyzes transparency of audit firms that audited financial statements of listed companies, for year 2011 and 2012. We use this two years because in the meantime Code of Ethics for Professional Accountants has been adopted. This paper investigates whether transparency reports of audit firms are in accordance with the Croatian Audit Act and whether there is a difference on transparency in observed years. For this paper quality index of transparency report and financial indicators of audit firms are used to get conclusion about condition of audit firms transparency reporting. Results of our study indicate that audit firms are not fully transparent, looking for both years. Transparency of audit firms in 2012 has improved significantly, compared with transparency in 2011.

Keywords: Transparency report, Index quality of transparency report, Croatian Audit Act, Code of Ethics for Professional Accountants.

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1357 A Study on the Relation between Auditor Rotation and Audit Quality in Iranian Firms

Authors: Bita Mashayekhi, Marjan Fayyazi, Parisa Sefati

Abstract:

Audit quality is a popular topic in accounting and auditing research because recent decades’ financial crises reduce the reliability of financial reports to public investors and cause significant doubt about the audit profession. Therefore, doing research to identify effective factors in improving audit quality is necessary for bringing back public investors’ trust to financial statements as well as audit reports. In this study, we explore the relationship between audit rotation and audit quality. For this purpose, we employ the Duff (2009) model of audit quality to measure audit quality and use a questionnaire survey of 27 audit service quality attributes. Our results show that there is a negative relationship between auditor’s rotation and audit quality as we consider the auditor’s reputation, capability, assurance, experience, and responsiveness as surrogates for audit quality. There is no evidence for verifying a same relationship when we use the auditor’s independence and expertise for measuring audit quality.

Keywords: Audit quality, auditor’s rotation, reputation, capability, assurance, experience, responsiveness, independence, expertise.

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1356 Developing an Audit Quality Model for an Emerging Market

Authors: Bita Mashayekhi, Azadeh Maddahi, Arash Tahriri

Abstract:

The purpose of this paper is developing a model for audit quality, with regard to the contextual and environmental attributes of the audit profession in Iran. For this purpose, using an exploratory approach, and because of the special attributes of the auditing profession in Iran in terms of the legal environment, regulatory and supervisory mechanisms, audit firms size, and etc., we used grounded theory approach as a qualitative research method. Therefore, we got the opinions of the experts in the auditing and capital market areas through unstructured interviews. As a result, the authors revealed the determinants of audit quality, and by using these determinants, developed an Integrated Audit Quality Model, including causal conditions, intervening conditions, context, as well as action strategies related to AQ and their consequences. In this research, audit quality is studied using a systemic approach. According to this approach, the quality of inputs, processes, and outputs of auditing determines the quality of auditing, therefore, the quality of all different parts of this system is considered.

Keywords: Audit quality, integrated audit quality model, audit supply, demand for audit service, grounded theory.

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1355 Contribution to the Success of the Energy Audit in the Industrial Environment: A Case Study about Audit of Interior Lighting for an Industrial Site in Morocco

Authors: Abdelkarim Ait Brik, Abdelaziz Khoukh, Mustapha Jammali, Hamid Chaikhy

Abstract:

The energy audit is the essential initial step to ensure a good definition of energy control actions. The in-depth study of the various energy-consuming equipments makes it possible to determine the actions and investments with best cost for the company. The analysis focuses on the energy consumption of production equipment and utilities (lighting, heating, air conditioning, ventilation, transport). Successful implementation of this approach requires, however, to take into account a number of prerequisites. This paper proposes a number of useful recommendations concerning the energy audit in order to achieve better results, and a case study concerning the lighting audit of a Moroccan company by showing the gains that can be made through this audit.

Keywords: Energy audit, energy diagnosis, consumption, electricity, energy efficiency, lighting audit.

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1354 CAGE Questionnaire as a Screening Tool for Hazardous Drinking in an Acute Admissions Ward: Frequency of Application and Comparison with AUDIT-C Questionnaire

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

Abstract:

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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1353 Working Motivation Factors Affecting Job Performance Effectiveness

Authors: Supattra Kanchanopast

Abstract:

The purpose of this paper was to study motivation factors affecting job performance effectiveness. This paper drew upon data collected from an Internal Audit Staffs of Internal Audit Line of Head Office of Krung Thai Public Company Limited. Statistics used included frequency, percentage, mean and standard deviation, t-test, and one-way ANOVA test. The finding revealed that the majority of the respondents were female of 46 years of age and over, married and live together, hold a bachelor degree, with an average monthly income over 70,001 Baht. The majority of respondents had over 15 years of work experience. They generally had high working motivation as well as high job performance effectiveness. The hypotheses testing disclosed that employees with different working status had different level of job performance effectiveness at a 0.01 level of significance. Working motivation factors had an effect on job performance in the same direction with high level. Individual working motivation included working completion, reorganization, working progression, working characteristic, opportunity, responsibility, management policy, supervision, relationship with their superior, relationship with co-worker, working position, working stability, safety, privacy, working conditions, and payment. All of these factors related to job performance effectiveness in the same direction with medium level.

Keywords: Internal Audit Staffs, Job Performance Effectiveness, Working Motivation.

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1352 Problems Occurring in the Process of Audit by Taking into Consideration their Theoretic Aspects against the Background of Reforms Conducted in a Country: The Example of Georgia

Authors: Levan Sabauri

Abstract:

The purpose of this article is an examination of the meaning of theoretic aspects of audit in the context of solving of specific problems of the audit. The audit’s aim is the estimation of financial statements by the auditor, i.e. if they are prepared according to the basic requirements of current financial statements. By examination of concrete examples, we can clearly see problems created in an audit and in often cases, those contradictions which can be caused by incompliance of matters regulated by legislation and by reality. An important part of this work is the analysis of reform in the direction of business accounting, statements and audit in Georgia and its comparison with EU countries. In the article, attention is concentrated on the analysis of specific problems of auditing practice and ways of their solving by taking into consideration theoretical aspects of the audit are proposed.

Keywords: Audit, auditor, auditor’s ethic code, auditor’s risk, financial statement, objectivity.

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1351 Corporate Governance Practices and Audit Quality: An Empirical Study of the Listed Companies in Egypt

Authors: Mohamed Moustafa Soliman, Mohamed Abd Elsalam

Abstract:

Recent financial international scandals around the world have led to a number of investigations into the effectiveness of corporate governance practices and audit quality. Although evidence of corporate governance practices and audit quality exists from developed economies, very scanty studies have been conducted in Egypt where corporate governance is just evolving. Therefore, this study provides evidence on the effectiveness of corporate governance practices and audit quality from a developing country. The data for analysis are gathered from the top 50 most active companies in the Egyptian Stock Exchange, covering the three year period 2007-2009. Logistic regression was used in investigating the questions that were raised in the study. Findings from the study show that board independence; CEO duality and audit committees significantly have relationship with audit quality. The results also, indicate that institutional investor and managerial ownership have no significantly relationship with audit quality. Evidence also exist that size of the company; complexity and business leverage are important factors in audit quality for companies quoted on the Egypt Stock Exchange.

Keywords: Corporate governance, Boards of directors, corporate ownership, Audit Committees, Audit quality, and Egypt.

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1350 CyberSecurity Malaysia: Towards Becoming a National Certification Body for Information Security Management Systems Internal Auditors

Authors: M. S. Razana, Z. W. Shafiuddin

Abstract:

Internal auditing is one of the most important activities for organizations that implement information security management systems (ISMS). The purpose of internal audits is to ensure the ISMS implementation is in accordance to the ISO/IEC 27001 standard and the organization’s own requirements for its ISMS. Competent internal auditors are the main element that contributes to the effectiveness of internal auditing activities. To realize this need, CyberSecurity Malaysia is now in the process of becoming a certification body that certifies ISMS internal auditors. The certification scheme will assess the competence of internal auditors in generic knowledge and skills in management systems, and also in ISMS-specific knowledge and skills. The certification assessment is based on the ISO/IEC 19011 Guidelines for auditing management systems, ISO/IEC 27007 Guidelines for information security management systems auditing and ISO/IEC 27001 Information security management systems requirements. The certification scheme complies with the ISO/IEC 17024 General requirements for bodies operating certification systems of persons. Candidates who pass the exam will be certified as an ISMS Internal Auditor, whose competency will be evaluated every three years.

Keywords: ISMS internal audit, ISMS internal auditor, ISO/IEC 17024, Competence, Certification.

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1349 Examining Corporate Tax Evaders: Evidence from the Finalized Audit Cases

Authors: Ming Ling Lai, Zalilawati Yaacob, Normah Omar, Norashikin Abdul Aziz, Bee Wah Yap

Abstract:

This paper aims to (1) analyze the profiles of transgressors (detected evaders); (2) examine reason(s) that triggered a tax audit, causes of tax evasion, audit timeframe and tax penalty charged; and (3) to assess if tax auditors followed the guidelines as stated in the 'Tax Audit Framework' when conducting tax audits. In 2011, the Inland Revenue Board Malaysia (IRBM) had audited and finalized 557 company cases. With official permission, data of all the 557 cases were obtained from the IRBM. Of these, a total of 421 cases with complete information were analyzed. About 58.1% was small and medium corporations and from the construction industry (32.8%). The selection for tax audit was based on risk analysis (66.8%), information from third party (11.1%), and firm with low profitability or fluctuating profit pattern (7.8%). The three persistent causes of tax evasion by firms were over claimed expenses (46.8%), fraudulent reporting of income (38.5%) and overstating purchases (10.5%). These findings are consistent with past literature. Results showed that tax auditors took six to 18 months to close audit cases. More than half of tax evaders were fined 45% on additional tax raised during audit for the first offence. The study found tax auditors did follow the guidelines in the 'Tax Audit Framework' in audit selection, settlement and penalty imposition.

Keywords: Corporate tax fraud, tax non-compliance, tax evasion, tax audit, fraudulent reporting.

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1348 Ways for the Development of the Audit Quality Control System through the Analysis of Ongoing Problems, Experience and Challenges: Example of the Republic of Georgia

Authors: Levan Sabauri

Abstract:

Audit is an independent inspection of the financial statement of the audited person and expresses the opinion of an auditor on the reliability of this statement. The auditor’s activity (auditor’s service) is realized by auditing organizations, individual auditors in connection to conduction of an audit and rendering of audit accompanying services. The profession of auditor means a high level of responsibility for rendered service. Results of decisions made by information users depend on the quality of the auditor’s conclusion. Owners, investors, creditors, and society rely on the opinion of the auditor under the condition that inspection was conducted with good quality. Therefore, the existence of the well-functioning audit quality control system for the administering of the audit is an important issue. An efficient audit quality control system is a substantial challenge that many countries face worldwide, especially those states where these systems are being formed within the respective reform program. The presented article reflects on the best practices of the leading countries, the assumptions and recommendations for the financial accounting, reporting and audit; current reforms in Georgia are made based on this comparative analysis.

Keywords: Audit quality control, audit program, financial statement, perspective analysis.

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1347 A Study of Water Consumption in Two Malaysian Resorts

Authors: Fu E. Tang

Abstract:

In the effort to reduce water consumption for resorts, more water conservation practices need to be implemented. Hence water audits need to be performed to obtain a baseline of water consumption, before planning water conservation practices. In this study, a water audit framework specifically for resorts was created, and the audit was performed on two resorts: Resort A in Langkawi, Malaysia; and Resort B in Miri, Malaysia. From the audit, the total daily water consumption for Resorts A and B were estimated to be 180m3 and 330 m3 respectively, while the actual water consumption (based on water meter readings) were 175 m3 and 325 m3. This suggests that the audit framework is reasonably accurate and may be used to account for most of the water consumption sources in a resort. The daily water consumption per guest is about 500 litres. The water consumption of both resorts is poorly rated compared with established benchmarks. Water conservation measures were suggested for both resorts.

Keywords: water consumption patterns, water conservation practices, water audit, water audit framework.

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1346 The Application of the Security Audit Method on the Selected Objects of Critical Infrastructure

Authors: Michaela Vašková

Abstract:

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 of 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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1345 An Exploratory Study Regarding the Effects of Auditor Switch, Auditee’s Industry, and Auditee’s Location on Audit Fees in Australia

Authors: Ashkan Mirzay Fashami

Abstract:

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 fee, auditor switch, Australia, industry, location.

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1344 Practice of Social Audit in Hotel Companies: Case Study of Agadir, Morocco

Authors: M. El Mousadik, F. Elkandoussi

Abstract:

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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1343 Effects of Audit Quality and Corporate Governance on Earnings Management of Quoted Deposit Money Banks in Nigeria

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.

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1342 Processes Simulation Study of Coal to Methanol Based on Gasification Technology

Authors: Po-Chuang Chen, Hsiu-Mei Chiu, Yau-Pin Chyou, Chiou-Shia Yu

Abstract:

This study presents a simulation model for converting coal to methanol, based on gasification technology with the commercial chemical process simulator, Pro/II® V8.1.1. The methanol plant consists of air separation unit (ASU), gasification unit, gas clean-up unit, and methanol synthetic unit. The clean syngas is produced with the first three operating units, and the model has been verified with the reference data from United States Environment Protection Agency. The liquid phase methanol (LPMEOHTM) process is adopted in the methanol synthetic unit. Clean syngas goes through gas handing section to reach the reaction requirement, reactor loop/catalyst to generate methanol, and methanol distillation to get desired purity over 99.9 wt%. The ratio of the total energy combined with methanol and dimethyl ether to that of feed coal is 78.5% (gross efficiency). The net efficiency is 64.2% with the internal power consumption taken into account, based on the assumption that the efficiency of electricity generation is 40%.

Keywords: Gasification, Methanol, LPMEOH, System-levelsimulation.

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1341 Optimal Opportunistic Maintenance Policy for a Two-Unit System

Authors: Nooshin Salari, Viliam Makis, Jane Doe

Abstract:

This paper presents a maintenance policy for a system consisting of two units. Unit 1 is gradually deteriorating and is subject to soft failure. Unit 2 has a general lifetime distribution and is subject to hard failure. Condition of unit 1 of the system is monitored periodically and it is considered as failed when its deterioration level reaches or exceeds a critical level N. At the failure time of unit 2 system is considered as failed, and unit 2 will be correctively replaced by the next inspection epoch. Unit 1 or 2 are preventively replaced when deterioration level of unit 1 or age of unit 2 exceeds the related preventive maintenance (PM) levels. At the time of corrective or preventive replacement of unit 2, there is an opportunity to replace unit 1 if its deterioration level reaches the opportunistic maintenance (OM) level. If unit 2 fails in an inspection interval, system stops operating although unit 1 has not failed. A mathematical model is derived to find the preventive and opportunistic replacement levels for unit 1 and preventive replacement age for unit 2, that minimize the long run expected average cost per unit time. The problem is formulated and solved in the semi-Markov decision process (SMDP) framework. Numerical example is provided to illustrate the performance of the proposed model and the comparison of the proposed model with an optimal policy without opportunistic maintenance level for unit 1 is carried out.

Keywords: Condition-based maintenance, opportunistic maintenance, preventive maintenance, two-unit system.

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1340 A Supervisory Scheme for Step-Wise Safe Switching Controllers

Authors: Fotis N. Koumboulis, Maria P. Tzamtzi

Abstract:

A supervisory scheme is proposed that implements Stepwise Safe Switching Logic. The functionality of the supervisory scheme is organized in the following eight functional units: Step- Wise Safe Switching unit, Common controllers design unit, Experimentation unit, Simulation unit, Identification unit, Trajectory cruise unit, Operating points unit and Expert system unit. The supervisory scheme orchestrates both the off-line preparative actions, as well as the on-line actions that implement the Stepwise Safe Switching Logic. The proposed scheme is a generic tool, that may be easily applied for a variety of industrial control processes and may be implemented as an automation software system, with the use of a high level programming environment, like Matlab.

Keywords: Supervisory systems, safe switching, nonlinear systems.

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1339 Cogeneration Unit for Small Stove

Authors: Michal Spilacek, Marian Brazdil, Otakar Stelcl, Jiri Pospisil

Abstract:

This paper shows an experimental testing of a small unit for combustion of solid fuels, such as charcoal and wood logs, that can provide electricity. One of the concepts is that the unit does not require qualified personnel for its operation. The unit itself is composed of two main parts. The design requires a heat producing stove and electricity producing thermoelectric generator. After the construction the unit was tested and the results show that the emission release is within the legislative requirements for emission production and environmental protection. That qualifies such unit for indoor application.

Keywords: Micro-cogeneration, thermoelectric generator, biomass combustion, wood stove.

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1338 Client Importance and Audit Quality under Civil Law versus Common Law Societies

Authors: Kelly Grani Yuen

Abstract:

Accounting scandals and auditing frauds are perceived to be driven by aggressive companies and misrepresentation of audit reports. However, local legal systems and law enforcements may affect the services auditors provide to their ‘important’ clients. Under the civil law and common law jurisdictions, the standard setters, the government, and the regulatory bodies treat cases differently. As such, whether or not different forms of legal systems and extent of law enforcement plays an important role in auditor’s Audit Quality is a question this paper attempts to explore. The paper focuses on the investigation in Asia, where Hong Kong represents the common-law jurisdiction, while Taiwan and China represent the civil law jurisdiction. Only the ten reputable accounting firms are used in this study due to the differences in rankings and establishments of some of the small local audit firms. This will also contribute to the data collected between the years 2007-2013. By focusing on the use of multiple regression based on the dependent (Audit Quality) and independent variables (Client Importance, Law Enforcement, and Press Freedom), six different models are established. Results demonstrate that since different jurisdictions have different legal systems and market regulations, auditor’s treatment on ‘important’ clients will vary. However, with the moderators in place (law enforcement and press freedom), the relationship between client importance and audit quality may be smoothed out. With that in mind, this study contributes to local governments and standard setters’ consideration on legal reform and proper law enforcement in the market. Perhaps, with such modifications on the economic systems, collusion between companies and auditors can finally be put to a halt.

Keywords: Audit quality, client importance, jurisdiction, modified audit opinions.

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1337 An Introduction to the Concept of Environmental Audit: Indian Context

Authors: Pradip Kumar Das

Abstract:

Phenomenal growth of population and industry exploits the environment in varied ways. Consequently, the greenhouse effect and other allied problems are threatening mankind the world over. Protection and up gradation of environment have, therefore, become the prime necessity all of mankind for the sustainable development of environment. People in humbler walks of life including the corporate citizens have become aware of the impacts of environmental pollution. Governments of various nations have entered the picture with laws and regulations to correct and cure the effects of present and past violations of environmental practices and to obstruct future violations of good environmental disciplines. In this perspective, environmental audit directs verification and validation to ensure that the various environmental laws are complied with and adequate care has been taken towards environmental protection and preservation. The discipline of environmental audit has experienced expressive development throughout the world. It examines the positive and negative effects of the activities of an enterprise on environment and provides an in-depth study of the company processes any growth in realizing long-term strategic goals. Environmental audit helps corporations assess its achievement, correct deficiencies and reduce risk to the health and improving safety. Environmental audit being a strong management tool should be administered by industry for its own self-assessment. Developed countries all over the globe have gone ahead in environment quantification; but unfortunately, there is a lack of awareness about pollution and environmental hazards among the common people in India. In the light of this situation, the conceptual analysis of this study is concerned with the rationale of environmental audit on the industry and the society as a whole and highlights the emerging dimensions in the auditing theory and practices. A modest attempt has been made to throw light on the recent development in environmental audit in developing nations like India and the problems associated with the implementation of environmental audit. The conceptual study also reflects that despite different obstacles, environmental audit is becoming an increasing aspect within the corporate sectors in India and lastly, conclusions along with suggestions have been offered to improve the current scenario.

Keywords: Environmental audit, environmental hazards, environmental laws, environmental protection, environmental preservation.

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1336 Impact of the Amendments of Malaysian Code of Corporate Governance (2007) on Governance of GLCs and Performance

Authors: Azmi Hamid, Rozainun Aziz

Abstract:

The study aims to investigate the impact on board and audit committee characteristics and firm performance before and after the revision of MCCG (2007) on GLCs over the period 2005-2010. We used Return on Assets (ROA) as a proxy for firm performance. The data consists of two groups; data collected before and after the amendments of MCCG (2007). Findings show that boards of directors with accounting / finance qualifications (BEXP) are statistically significant with performance for period before the amendments. As for audit committee members with accounting or finance qualifications (ACEXP), correlation results indicate a negative association and non-significant results for the years before amendments. However, the years after the amendments show positive relationship with highly significant correlations (1%) to ROA. This indicates that the amendments of MCCG 2007 on the audit committee members- literacy in accounting have impacted the governance structures and performance of GLCs.

Keywords: BOD and Audit Committees, firm performance, GLCs.

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1335 Unit Root Tests Based On the Robust Estimator

Authors: Wararit Panichkitkosolkul

Abstract:

The unit root tests based on the robust estimator for the first-order autoregressive process are proposed and compared with the unit root tests based on the ordinary least squares (OLS) estimator. The percentiles of the null distributions of the unit root test are also reported. The empirical probabilities of Type I error and powers of the unit root tests are estimated via Monte Carlo simulation. Simulation results show that all unit root tests can control the probability of Type I error for all situations. The empirical power of the unit root tests based on the robust estimator are higher than the unit root tests based on the OLS estimator.

Keywords: Autoregressive, Ordinary least squares, Type I error, Power of the test, Monte Carlo simulation.

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1334 Landfill Design for Reclamation of Şırnak Coal Mine Dumps: Shalefill Stability and Risk Assessment

Authors: Yıldırım I. Tosun, Halim Cevizci, Hakan Ceylan

Abstract:

By GEO5 FEM program with four rockfill slope modeling and stability analysis was performed for S1, S2, S3 and S4 slopes where landslides of the shalefills were limited. Effective angle of internal friction (φ'°) 17°-22.5°, the effective cohesion (c') from 0.5 to 1.8 kPa, saturated unit weight 1.78-2.43 g/cm3, natural unit weight 1.9-2.35 g/cm3, dry unit weight 1.97-2.40 g/cm3, the permeability coefficient of 1x10-4 - 6.5x10-4 cm/s. In cross-sections of the slope, GEO 5 FEM program possible critical surface tension was examined. Rockfill dump design was made to prevent sliding slopes. Bulk material designated geotechnical properties using also GEO5 programs FEM and stability program via a safety factor determined and calculated according to the values S3 and S4 No. slopes are stable S1 and S2 No. slopes were close to stable state that has been found to be risk. GEO5 programs with limestone rock fill dump through FEM program was found to exhibit stability.

Keywords: Slope stability, GEO5, rockfills, rock stability.

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