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Author: Khim Kelly
Publisher:
ISBN:
Category :
Languages : en
Pages : 67
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Book Description
We conduct an experiment where alumni participants from a Canadian accounting and finance undergraduate program assume they are in one of four regulatory regimes (manipulated between-subjects) and make investment potential evaluations for two firms (manipulated within-subjects): a firm disclosing no material weaknesses (No-MW disclosure firm) and a firm disclosing material weaknesses (MW disclosure firm) in internal controls over financial reporting (ICFR). We find evidence of configural information processing. For the No-MW disclosure firm, mandatory (versus voluntary) disclosure of ICFR material weaknesses and mandatory (versus voluntary) independent ICFR audit are substitutes in enhancing investment potential evaluations. However, for the MW disclosure firm, neither mandatory disclosure nor mandatory audit has any effect on investment potential evaluations. Supplementary experiments with undergraduate participants suggest that the pattern of configural information processing is a function of participants' knowledge of company disclosure incentives and the assurance value of an audit, wherein undergraduates with lower levels of knowledge are less able to perceive the effects of mandatory disclosure and mandatory audit on investment potential evaluations. Our findings have implications for regulators who are concerned about balancing the costs and benefits of different regulatory mechanisms.
Author: Khim Kelly
Publisher:
ISBN:
Category :
Languages : en
Pages : 67
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Book Description
We conduct an experiment where alumni participants from a Canadian accounting and finance undergraduate program assume they are in one of four regulatory regimes (manipulated between-subjects) and make investment potential evaluations for two firms (manipulated within-subjects): a firm disclosing no material weaknesses (No-MW disclosure firm) and a firm disclosing material weaknesses (MW disclosure firm) in internal controls over financial reporting (ICFR). We find evidence of configural information processing. For the No-MW disclosure firm, mandatory (versus voluntary) disclosure of ICFR material weaknesses and mandatory (versus voluntary) independent ICFR audit are substitutes in enhancing investment potential evaluations. However, for the MW disclosure firm, neither mandatory disclosure nor mandatory audit has any effect on investment potential evaluations. Supplementary experiments with undergraduate participants suggest that the pattern of configural information processing is a function of participants' knowledge of company disclosure incentives and the assurance value of an audit, wherein undergraduates with lower levels of knowledge are less able to perceive the effects of mandatory disclosure and mandatory audit on investment potential evaluations. Our findings have implications for regulators who are concerned about balancing the costs and benefits of different regulatory mechanisms.
Author: Michael J. Ramos
Publisher: John Wiley & Sons
ISBN: 0471656879
Category : Business & Economics
Languages : en
Pages : 306
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Book Description
Designed specifically for Sarbanes-Oxley Section 404 compliance, How to Comply with Sarbanes-Oxley Section 404 features: A step-by-step approach to engagement performance Original material from a leading expert in auditing and accounting Practice aids, including forms, checklists, illustrations, diagrams, and tables In-depth explanations to help professionals understand how best to approach the internal control engagement Examples and action plans providing blueprints for implementing requirements of the Act Order your copy today!
Author: United States Government Accountability Office
Publisher: Lulu.com
ISBN: 0359536395
Category : Reference
Languages : en
Pages : 234
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Book Description
Audits provide essential accountability and transparency over government programs. Given the current challenges facing governments and their programs, the oversight provided through auditing is more critical than ever. Government auditing provides the objective analysis and information needed to make the decisions necessary to help create a better future. The professional standards presented in this 2018 revision of Government Auditing Standards (known as the Yellow Book) provide a framework for performing high-quality audit work with competence, integrity, objectivity, and independence to provide accountability and to help improve government operations and services. These standards, commonly referred to as generally accepted government auditing standards (GAGAS), provide the foundation for government auditors to lead by example in the areas of independence, transparency, accountability, and quality through the audit process. This revision contains major changes from, and supersedes, the 2011 revision.
Author: Lynford Graham
Publisher: John Wiley & Sons
ISBN: 111899647X
Category : Business & Economics
Languages : en
Pages : 413
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Book Description
Ease the transition to the new COSO framework with practical strategy Internal Control Audit and Compliance provides complete guidance toward the latest framework established by the Committee of Sponsoring Organizations (COSO). With clear explanations and expert advice on implementation, this helpful guide shows auditors and accounting managers how to document and test internal controls over financial reporting with detailed sections covering each element of the framework. Each section highlights the latest changes and new points of emphasis, with explicit definitions of internal controls and how they should be assessed and tested. Coverage includes easing the transition from older guidelines, with step-by-step instructions for implementing the new changes. The new framework identifies seventeen new principles, each of which are explained in detail to help readers understand the new and emerging best practices for efficiency and effectiveness. The revised COSO framework includes financial and non-financial reporting, as well as both internal and external reporting objectives. It is essential for auditors and controllers to understand the new framework and how to document and test under the new guidance. This book clarifies complex codification and provides an effective strategy for a more rapid transition. Understand the new COSO internal controls framework Document and test internal controls to strengthen business processes Learn how requirements differ for public and non-public companies Incorporate improved risk management into the new framework The new framework is COSO's first complete revision since the release of the initial framework in 1992. Companies have become accustomed to the old guidelines, and the necessary procedures have become routine – making the transition to align with the new framework akin to steering an ocean liner. Internal Control Audit and Compliance helps ease that transition, with clear explanation and practical implementation guidance.
Author: Anup Kumar Saha
Publisher:
ISBN:
Category :
Languages : en
Pages : 7
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Book Description
Even though no regulations require, public limited companies include management reports regarding internal controls in annual reports. Accountants and auditors are in a good position to suggest what degree of reporting is appropriate as they are directly involved in auditing financial statements and reviewing internal controls. This is a unique opportunity for management to discuss issues and concerns not communicated elsewhere in the annual report. From the very beginning there is a growing consensus as to what the content should include: financial statement presentation; purpose, nature and components of internal controls; roles of internal audit, independent auditor and audit committee. A significant number of companies studied acknowledge that “the systems are designed to provide only a reasonable assurance of meeting stated objectives.” If independent auditor's attestation of such management reports were required; such a mandate would have a significant impact on roles of both the independent auditor and management.
Author: Julie Harrer
Publisher: John Wiley & Sons
ISBN: 0470376198
Category : Business & Economics
Languages : en
Pages : 323
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Book Description
Praise for Internal Control Strategies A Mid to Small Business Guide "Internal Control Strategies is an excellent field guide for the implementation and maintenance of efficient and effective internal control systems. The book provides a practical approach to interpreting guidance from oversight agencies and integrating it with industry practice in a real-world environment. This handbook is an essential tool for managers and professionals going through the day-to-day struggle of managing auditor expectations and permitting business to proceed in the most efficient manner." -Michael Rodriguez, former senior manager of finance, Qualcomm Incorporated "Internal Control Strategies is the clearest path forward for middle-market SEC registrants and their independent registered public accounting firms as they streamline the SOX 404 compliance process in 2008 and beyond." -Stephen G. Austin, MBA, CPA, Managing Firm Partner,Swenson Advisors, LLP, Regional PCAOB Accounting Firm "Clearly written and practical, Internal Control Strategies is a must-read for every chief audit, finance, or compliance executive." -Jeff Miller, Partner-in-Charge, Business Risk Services,Squar, Milner, Peterson, Miranda & Williamson, LLP "As a CFO of small to mid-sized publicly traded and privately held companies, one is usually faced with the challenge of developing and implementing the right levels of internal controls and compliance within the restrictions of limited financial and human resources. Internal Control Strategies presents the relevant topics in a clear and concise manner, allowing the reader to understand the internal control framework and specific underlying requirements quickly. The author's vast experience with SOX compliance ensures a targeted and pragmatic approach for the successful implementation of internal controls. Her recommendations are 'to the point' and eliminate some of the guesswork we all have experienced while working towards SOX compliance." -Robert S. Stefanovich, Chief Financial Officer, Novalar Pharmaceuticals, Inc. The SEC requires all publicly traded companies to attest to theeffectiveness of their internal controls. Is your business ready? Internal Control Strategies: A Mid to Small Business Guide clearly explains the latest PCAOB, SEC, and COSO guidance, providing you with an effective tool and reference guide for successful implementation of sections 302 and 404 of the Sarbanes-Oxley Act. Extremely knowledgeable and insightful, author Julie Harrer brings practical clarity to this complex topic, leading you step by step in addressing the challenges associated in bringing your business in compliance with SOX.
Author: United States Government Accountability Office
Publisher: Lulu.com
ISBN: 0359541828
Category : Reference
Languages : en
Pages : 88
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Book Description
Policymakers and program managers are continually seeking ways to improve accountability in achieving an entity's mission. A key factor in improving accountability in achieving an entity's mission is to implement an effective internal control system. An effective internal control system helps an entity adapt to shifting environments, evolving demands, changing risks, and new priorities. As programs change and entities strive to improve operational processes and implement new technology, management continually evaluates its internal control system so that it is effective and updated when necessary. Section 3512 (c) and (d) of Title 31 of the United States Code (commonly known as the Federal Managers? Financial Integrity Act (FMFIA)) requires the Comptroller General to issue standards for internal control in the federal government.
Author: Mukesh Garg
Publisher:
ISBN:
Category :
Languages : en
Pages : 356
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Book Description
This thesis draws on agency theory to primarily investigate whether CEOs' and CFOs' voluntary certification of internal controls over financial reporting (hereafter, ICFR) is associated with audit fees and value relevance of Australian financial reports. The thesis also examines whether corporate governance and audit quality are associated with the likelihood that firms provide the CEOs' and CFOs' voluntary ICFR certification. While agency theory predicts that firms with high agency costs are less likely to implement sound internal control procedures, however, sound corporate governance and higher audit effort provides avenues to mitigate such high agency costs. This theoretical framework is used to examine three Research Questions. CEOs' and CFOs' voluntary ICFR certification is a recommendation within the Australian Securities Exchange Corporate Governance Council Best Practice Recommendations. The ICFR certification states that the integrity of financial reports is formed on the soundness, efficiency and effectiveness of firms' risk management systems and internal compliance and controls (hereafter, CERTDISC). While disclosure of ICFR certification is not mandated, if there is a non-compliance of the recommendation, that information has to be disclosed in the annual report with an "if not why not" approach. Studies in a mandatory disclosure setting in the US find internal control deficiency is related to several firm level outcomes. For example, it is found to be negatively associated with earnings quality (Doyle, Ge and McVay, 2007b; Ashbaugh-Skaife, Collins, Kinney and LaFond, 2008; Chan, Farrell and Lee, 2008), positively associated with audit fees (Raghunandan and Rama, 2006; Hoitash, Hoitash and Bedard, 2008; Lu, Richardson and Salterio, 2011) and positively associated with cost of equity (Beneish, Billings and Hodder, 2008; Ashbaugh-Skaife, Collins, Kinney and Lafond, 2009). The inferences drawn from studies in a mandatory setting may not be applicable in a voluntary environment where disclosures of good news as opposed to bad news, are affirmative and not assured by an external auditor. Three specific related Research Questions are examined in this thesis: (1) Are corporate governance and audit quality associated with ICFR certification and disclosure? (2) Is ICFR certification and disclosure associated with audit fees? (3) Is ICFR certification and disclosure value relevant? This thesis aims at establishing a view on the effect of CERTDISC on audit fees and the value relevance of CERTDISC by investigating whether firms with strong corporate governance and audit quality implement CERTDISC and whether auditors and investors are affected by CERTDISC. Prior studies show that the effectiveness of the board and audit committee positively affects voluntary disclosures and the quality of ICFR (Klein, 2002; Leuz, Nanda and Wysocki, 2003; Beekes, Pope and Young, 2004; Agrawal and Chadha, 2005; Farber, 2005; Ashbaugh-Skaife, Collins and LaFond, 2006; Doyle, Ge and McVay, 2007a). Sound, effective and efficient ICFR reduces the auditors' control risk which, in turn, according to the audit risk model, increases detection risk. Firms with high detection risk (the risk that the auditor's testing procedures will not be effective in detecting a material misstatement) require less audit effort and therefore lower audit fees, ceteris paribus. The thesis is conducted using a sample of 498 Australian listed firms in 2004, the year post the introduction of CERTDISC provisions. In testing first Research Question it is found that firms audited by big-4 audit firms are associated with CERTDISC. Moreover, it is found that the positive association between corporate governance and CERTDISC is stronger for firms audited by big-4 auditors consistent with agency theory. In the audit fee tests to address Research Question 2, it is found that while CERTIDISC has no significant main effect on audit fees, corporate governance has a significant positive main effect. This suggests firms with strong corporate governance are likely to demand higher audit effort also consistent with agency theory and a study by Carcello, Hermanson, Neal and Riley Jr (2002). However, when CERTDISC and corporate governance variables are tested for interaction effect, it is found that there is a significant positive interaction effect between CERTDISC and corporate governance on audit fees. Further analysis of the interaction effect suggests that the effect of CERTDISC on audit fees is conditional on corporate governance. In point of detail, it is found that at low levels of corporate governance, there is a negative association between CERTDISC and audit fees but at progressively higher levels of corporate governance, the effects of CERTIDISC become weaker. In other words, CERTDISC has a negative effect on audit fees only for firms with low corporate governance. The results from the examination of the value relevance of CERTDISC for addressing Research Question 3 suggest that CERTDISC is positively associated with share price. More specifically, it is found that the value relevance is more prominent for firms with higher information asymmetry proxied by three measures namely audit by big-4 versus non-big-4 audit firms (non-big-4 client firms are assumed to be associated with higher information asymmetry), bid-ask spread and stock liquidity. These results suggest that investors find CERTDISC most useful for firms with high information asymmetry. Findings suggest that costly ICFR audit environment similar to that in the US under Section 404 of Sarbanes Oxley Act, 2002 may not be required as the market is able to recognize the information conveyed by the existence of ICFR. Finally, from the theoretical point of view, this thesis provides evidence consistent with theoretical predictions in agency theory. More specifically, agency theory predicts that stronger internal controls and a commitment by top management (tone at the top) to implement ICFR procedures reduces potential agency conflicts between managers and shareholders thus resulting in higher firm valuation, ceteris paribus. This thesis contributes to the extant literature on ICFR by investigating a unique unaudited and voluntary ICFR certification and disclosure regime. The findings have implications for investors when making an investment decision as it informs them of the reliance they can place on CERTDISC. The thesis also provides some information to the corporate regulators on whether an alternative to the regulation (Section 404 of Sarbanes Oxley Act, 2002) adopted by the US should be considered in Australia. Finally, the thesis adds to the audit fee literature by showing that both corporate governance and ICFR certification affect audit fees. It also adds to the "value relevant" literature by showing that ICFR certification information is value relevant to investors for a sample of Australian listed firms, and that the extent of value relevance depends on the information environment; ICFR is less relevant for firms with big-4 auditors and for firms with low information asymmetry.
Author: Lynford Graham
Publisher: John Wiley & Sons
ISBN: 0470603992
Category : Business & Economics
Languages : en
Pages : 317
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Book Description
A step-by-step approach for planning and performing an assessment of internal controls Filled with specific guidance for small-business compliance to SEC and PCAOB requirements relating to Sarbanes-Oxley 404, Complying with Sarbanes-Oxley Section 404: A Guide for Small Publicly Held Companies provides you with specific guidance on working with auditors to achieve benefits and cost reductions. This practical guide helps you knowledgeably interpret and conform to Sarbanes-Oxley 404 compliance and features: Clear, jargon-free coverage of the Sarbanes-Oxley Act and how it affects you Links to current guidance online Specific guidance to companies on how to work with auditors to achieve benefits and cost reductions Coverage of IT and IT general controls Examples and action plans providing blueprints for implementing requirements of the act Easy-to-understand coverage of the requirements of the SEC and PCAOB Discussion of the requirements for assessing internal control effectiveness A look at how the new guidance will reduce your costs In-depth explanations to help professionals understand how best to approach the internal control engagement Practice aids, including forms, checklists, illustrations, diagrams, and tables Continuing to evolve and bring about business and cultural change, this area of auditing and corporate governance is demystified in Complying with Sarbanes-Oxley Section 404: A Guide for Small Publicly Held Companies, your must-have, must-own guide to SOX 404 implementation and an effective tool and reference guide for every corporate manager.
Author:
Publisher:
ISBN:
Category : Corporations
Languages : en
Pages : 64
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Book Description
