Effective working relationships between audit committees and internal audit—the cornerstone of corporate governance in local authorities, a Welsh perspective

This research looks at the working relationship between audit committees and the internal audit function within Welsh local government. The focus is primarily on the working relationship from the perspective of the head of internal audit, also known as the Chief Audit Executive or Chief Internal Auditor [Head of internal audit will be used synonymously with that of Chief Audit Executive and Chief Internal Auditor]. Is it a marriage of convenience or a working relationship where the two can capitalise on what they both bring to the corporate governance arena? Reluctance by local government in Wales to embrace the merits of audit committees in the late 1990s means that local government is playing catch up with other public sector organisations. This in turn affects the recognition of the benefits of an effective audit committee capable of working with the internal audit function to promote sound corporate governance. Published guidelines by the UK public sector accountancy body in 2005 on the implementation of audit committees within local government made those organisations yet to establish an audit committee to rethink the situation, and were encouraged by the seemingly positive benefits of audit committees. Wales was no exception, and the 22 local authorities considered embracing the concept of audit committees. Consequently, this placed the internal audit function and head of internal audit under the spotlight in terms of the expectations of the audit committee members. Audit committees roles and responsibilities mean that they should assist councils and officers to ensure they undertake their responsibilities with probity and effectiveness, especially in respect of financial control. It is imperative that committee chairs and internal audit can function as a working team in order to be effective. Audit Committees have a role to assess the performance of the internal audit function, appoint heads of internal audit, support and promote the audit function within the organisation. It is therefore important that the heads of internal audit have confidence and respect for the audit committee and its chair in terms of the skill and knowledge it has of the audit role in relation to the financial and non-financial aspects of the organisation. Laura Spira (2003) comments on how very little research has been undertaken in relation to the audit committee activities, within the private sector, consequently very little is known about what they actually do, let alone how effective they are in undertaking their role. In a similar vein, the same is true of the public sector audit committee activities, especially when they have tended to adopt the private sector audit committee as a blue print to their own audit committee development.     

基于ERM框架的商业银行内部审计机制研究

内部审计作为公司治理、风险管理和控制结构的一部分,是对其它控制进行的再控制.由原来的"独立评价职能"转变为"风险管理和公司治理",内部审计在银行业中的作用越来越重要.在风险与效益并存的时代,现代银行业倡导全面风险管理理念.本文选取了全面风险管理的研究视角,对全面风险管理体系下的商业银行内部审计角色定位及作用机制进行研究.     

“Good” corporate governance and the quality of internal auditing departments in Italian listed firms. An exploratory investigation in Italian listed firms

One of the most important issue relating to corporate governance reports refers to their ability to provide users with a complete set of information regarding the effective ability of an entity to achieve oversight objectives by the compliance to corporate governance practices required by a specific law or industry code. In addition, other features, such as the quality of the internal auditing function or the sensitivity of top management to issues relating to corporate internal controls and risk management, can also be taken into account when formulating a judgment on the quality of corporate governance practices. Is there an association between the compliance to codes and internal controls effectiveness? We propose to assess the quality of corporate governance through a proxy that considers several characteristics of internal audit departments and combines them to determine an Internal Audit Departments global quality index—IAD Index. To define IAD global quality we consider the effectiveness of an internal audit function analysing its operational aspects. The IAD Index is based on several signalling elements that previous literature assumed as proxies for quality of IADs which are grouped into four pillars: a formal quality index; a static quality index; an activity-related quality index; and a performance-linked quality index. We then test the IAD index on a sample of Italian listed firms and conclude that there are significant associations (positive and negative) between the degree of compliance to some corporate governance regulations for listed firms and the IAD Index for the sample being considered.     

A comparison of values and attitudes toward risk of Greek and American Entrepreneurs

This study looks at similarities and differences between entrepreneurs in two different cultures, the United States and Greece. Values and risk assessment are key ingredients in the planning process. If they differ across countries, American research on decision making will have little applicability. Entrepreneurs in Greece and the United States were compared using the Allport-Vernon-Lindzey Study of Values and the Choice Dilemmas Questionnaire. Our findings indicate strong similarities between the Greek and American Entrepreneurs.     

中国审计判断质量的实验研究

近年来,审计质量问题引起了社会的广泛关注,审计判断作为影响审计质量的主要因素之一,日益受到我国审计理论界和实务界的重视。本文以我国注册会计师审计为背景,以内部控制风险评估为案例,采用实验的方法对我国注册会计师的审计判断质量进行了检验。研究结果表明,我国注册会计师的共识、稳定性和自我洞察力已经达到了相当高的水平,但与国外的相似实验研究结果相比,还存在着明显的差距,需要继续提升；在判断过程中,我国注册会计师的判断模型明显呈线性化。     

A Bayesian approach to statistical inference in stochastic DEA

Stochastic DEA can deal effectively with noise in the non-parametric measurement of efficiency but unfortunately formal statistical inference on efficiency measures in not possible. In this paper, we provide a Bayesian approach to the problem organized around simulation techniques that allow for finite-sample inferences on efficiency scores. The new methods are applied to efficiency analysis of the Greek banking system for the period 1993–1999. The results show that the majority of the Greek banks operate close to best market practices.     

基于信用评分模型的我国商业银行客户违约概率研究

信用风险是商业银行面临的最主要和最复杂的风险。《巴塞尔新资本协议》对信用风险的计量提出了标准法和内部评级法,指出有条件的银行要实施内部评级法,通过对历史数据构建模型测算客户的违约概率。本文结合内部评级法和我国的实际情况,从客户评级的角度,研究了个人客户违约概率和公司客户违约概率。     

A cyclical view of the relationship between corporate governance and strategic management

The vast majority of research on the relationship between corporate governance and strategic management focuses on the impact of corporate governance on strategic management. In this article we propose a cyclical model, highlighting that strategic decisions can also affect corporate governance through shaping firm ownership structure. We discuss the impacts of strategic decisions on firm ownership structure and corporate governance in the contexts of publicly traded firms, private firms, and the privatization of state-owned enterprises. We hope that our cyclical model can promote researchers to develop a more complete view about the relationships between strategic management, ownership structure, and corporate governance.     

Whistleblowing auditors—The ultimate betrayal?

The topic of whistleblowing is achieving prominence. Some influential voices are suggesting that far from whistleblowing—informing on organizations, it may in certain circumstances be an activity deserving high praise. Inevitably it entails huge risks to the activist, and these risks need to be personally and carefully considered. John Banham, Director General of the Confederation of British Industry, wrote in support of the Social Audit report on the subject (Winfield, 1990), and a government-established committee has suggested the possibility of honouring whistleblowers in the British Honours system for their good corporate citizenship. The first part of this treatise examines the case of external audit. There has been much debate on the role and purpose of external audit, and this has tended to exclude whistleblowing. However there are winds of change, and tightening of legislation and recent ethical guidance suggests that the issue is no longer closed. Internal audit seems far more resistant on this point in terms of the professional guidance issued. For the troops on the ground the issue is far from clear-cut, and the Institute of Internal Auditors, and its unofficial spokesperson, Gil Courtemanche, are urged to reconsider this matter seriously. We conclude by looking at generalized examples of whistleblowing, provide criteria for valid forms of whistleblowing and suggest the way forward.     

审计委员会制度与盈余质量的改善

本文采用2002年至2004年上市公司的数据.以盈余质量视角研究审计委员会制度的有效性.研究发现,基于各年截面数据,设有审计委员的上市公司均具有较高的盈余质量,同时也发现这种盈余质量上的差异已经存在于上市公司成立审计委员会的上一年.当控制这种成立前的盈余质量差异之后,本文发现,设立审计委员会前后,上市公司盈余质量没有显著变化.因此,本文结论并没有发现审计委员会在提高会计盈余质量方面已发挥了应有的作用.     

内部控制鉴证报告的信号失灵和甄别——一个本土化的实证研究

本文从内部控制的三个关键点——内部控制实施、评价和审计师鉴证——分析了内部控制鉴证报告的信号失灵原因和甄别工具,采用我国上市公司数据进行检验并发现,公司披露鉴证报告与否和会计信息质量无关,但披露高质量(声誉)审计师签署的鉴证报告,公司的操控性应计更低,会计信息质量更高。研究结果表明,内部控制鉴证报告作为传递内部控制信息的二次信号是失灵的,而审计师质量具有信号甄别的作用。本文结论不仅有助于公司制定有效的内部控制信息披露策略,还为内部控制信息市场的监管导向决策提供依据。     

我国上市银行信用溢价的实证研究

在改进KMV模型、采用信用溢价直观度量银行信用风险的基础上,通过MonteCarlo模拟法估计12家样本银行信用风险的VaR和CVaR值,并与历史模拟法的度量结果进行比较。研究结果表明,历史模拟法高估了银行所面临的信用风险;在样本银行中,中国银行最容易发生极端信用事件,工商银行则相反。     

The social auditor

The auditor is essentially a social animal. However, beyond this lies a type of audit called social audit which tries to strike a balance between an organization's social and more traditional business objectives. After the polar contrasting views of monetarist Friedman amd Marxism have been outlined, we concentrate on considering social audit in the more common mixed economy. With no statutory or other requirement for external social audit, the onus is on organizations to take their own initiatives. Internal resistance often needs to progress through five distinct phases to reach acceptance. Some organizations appoint consumer advocates, such as Esther Peterson. There is an underlying statutory basis to social audits, but if this is extended we enter the domain of external pressure groups, such as the private independent Social Audit and the statutory National Consumer Council. Finally, the scope and motivation for internalizing social audit is discussed.     

Explaining the influence of time budget pressure on audit quality in Sweden

This paper is aimed at explaining how time budget pressure influences audit quality in the Swedish context. A hypothesis is deduced and tested through a survey sent to Swedish auditors. The Swedish context provides a special setting since audit firms and auditors have been facing new pressures due, for example, to the removal of statutory audits for a majority of the companies in Sweden. The findings show that time budget pressure lowers the quality of audits performed by Swedish auditors, but it is not the only explanation. Audit quality is also related to other factors such as gender, position, experience, number of clients, local office size and audit firm. Thus, the model is useful for explaining the factors influencing audit quality and could be used and expanded in future studies. The study also has practical implications showing that when trading-off between audit efforts and available resources and setting time budgets for each audit assignment, audit firms should also consider the personal characteristics of the auditors.     

Operations research and bank planning

Starting with its use by the military in World War II, the Systems approach to problems solving and planning found its way into the business field. In the U.S.A. this was partly due to the filter-down effect into many firms entering into long term contracts with the Department of Defense. In examining the use of Systems Analysis in corporate planning, there appeared to be a prominent gap in its general use in the financial services industry of which commercial banks are the most important segment. Theoretically, banks are ideal economic units to use mathematically oriented Operations Research. Therefore, an in-depth study of such an existing planning system as used in a major U.S. commercial bank was undertaken. Such a case study, it was hoped, would yield important information as to how to introduce such a planning system into a bank, the types of programs in which it appeared to have strengths and weaknesses, and its applicability to planning processes in commercial banking generally. Consequently, a series of interviews with the director of this planning activity, his staff, and other officers of the bank were conducted. In order to obtain the data used in this study, a pledge to maintain anonimity of the bank was required. So, in the balance of this presentation, it shall be known as ‘The Bank’.     

审计在基金会治理中能够有效发挥作用吗?

本文以2005年至2009年中国全国基金会为样本,研究基金会捐赠收入与外部审计师选择之间的关系,即在中国慈善市场上,外部监督机制之一的外部审计是否具有治理效应及治理职能如何有效实现。实证结果表明:当基金会选择百强事务所审计时,能够有效实现审计的治理职能,吸引更多的捐赠者进行捐赠;当基金会选择民政部中标事务所审计时,不能有效实现审计的治理职能,从而不能显著增加捐赠收入。上述结论在一定程度上验证了在慈善市场中,外部审计具有治理效应,其有效治理效应依赖于高质量的审计。     

Audit Within the Corporate Governance Paradigm: A Cornerstone Built on Shifting Sand?

This paper is a case study‐based investigation of aspects of the current paradigmatic approach to ‘good’ corporate governance, with its focus on the interlinked roles of internal control and risk management procedures, internal audit and external audit, overseen and coordinated by a formal structure of board committees, in particular the audit committee. The evidence that we adduce from the study of four high‐profile cases of perceived accounting and governance failure provides limited assurance that this approach will in fact be cost‐effective or efficient in preventing further such cases of accounting and governance failure. Specifically, issues as to remuneration and fee dependence, lack of relevant knowledge and expertise, social and psychological dependence upon executive management appear to have significantly and negatively affected the quality of decision‐making of governance gatekeepers. This suggests that further consideration of relevant economic, institutional and cognitive/behavioural factors beyond the rational choice model of traditional economics should underpin future developments in required modes and structures of governance.     

基于分块极大值模型的商业银行操作风险计量研究

尽管高级计量法由于具有计算精确和节约监管资本等优点而被多数商业银行所青睐,但对于采用哪一种方法来刻画低频高危的操作风险尾部数据却没有一致认识。本文根据巴塞尔委员会关于操作风险计量的原则,采用分块极大值方法和概率加权矩参数估计法,对中国商业银行1990—2009年间的操作风险数据进行了实证。从图形检验和数值检验结果来看,该模型估计的参数具有较高的拟合优度,能够较好地拟合操作风险极端值的尾部分布,为商业银行计量操作风险资本提供了较高的参考价值。     

基于混合整数规划法的企业信用风险评估研究

运用混合整数规划法构建企业信用风险评估模型,并将其应用于我国商业银行信用风险评估中。该模型具有非参数检验特性,不需要样本数据服从正态分布和等协方差,并通过两阶段的分类过程对企业信用状况进行判别。研究结果表明,混合整数规划法有较强的预测贷款企业信用风险的能力。     

Earnings management and audit quality: stakeholders’ perceptions

This paper examines the perceptions of Libyan Commercial Banks’ (LCBs) stakeholders regarding the role of the external auditor in relation to earnings management (EM). A total of 28 semi-structured interviews were carried out with a range of LCB stakeholders comprising preparers of financial statements, users, regulators and academics. A questionnaire survey of stakeholders which yielded 102 Responses (response rate 53%) was also carried out. A variety of views were held which varied to some extent according to stakeholder group. A widely held perception amongst interviewees was that the auditor has the ability to detect EM practices but may not be able to prevent it. However questionnaire respondents were, in aggregate, more confident of the auditor’s ability to deter EM due to the influence of the audit report. The paper provides insights into stakeholders’ perceptions of the quality of bank audits. The findings are of particular relevance to regulators, and specifically, the Central Bank of Libya. Perceptions of audit quality raise questions about its guidance and regulations especially in connection with audit firm rotation. Perceptions of audit quality, and therefore, of the credibility of financial statements should be of interest to all stakeholders. The importance of the banking sector for society has been amply demonstrated in recent years. A well-functioning audit function is a key component of its regulation. To the best of our knowledge, this paper is the first to examine issues related to banks’ audit quality and audit firm rotation in Libya.