Audit Committees

Corporate risk management governance and management frameworks, approaches and practices face a variety of challenges and in many cases need to be reviewed and revised to copy with multiple uncertainties, disruptive technologies, new markets, business models, relationship, forms of organisation and areas of unpredictability. Systematically reviews issues and questions that need to be addressed from a board perspective in various risk arenas. Published  as: Coulson-Thomas, Colin (2017), Risk Governance and the Board, Director Today, Vol. III Issue II, February, pp 49-55

This paper sheds light on the effect of corporate governance practices and audit quality on the cost of debt. Particularly, we investigate the effect of the ownership structure and the audit committee independance, as well as the reputation of the external auditor, on the cost of debt. Based on a sample of Tunisian listed companies over the period 2007 to 2016 and using OLS regression models estimated with robust standard errors, our findings show that the cost of debt is inversely related to the director board size and the ownership concentration. Tunisian debtholders favour monitoring mechanisms that are likely to limit managerial opportunism and consider board monitoring effectiveness and the presence of blockholders as a source of greater assurance. The results also reveal evidence of a debt pricing effect of audit quality as measured by auditor size (Big4). The findings report, however, that the board composition and the presence of managerial shareholders, as well as the independence of audit committee have non-significant effect on the cost of debt.

This paper investigates the interplay between governance and disclosure in an agency setting, featured by concentrated ownership and high insider shareholders representation in the board. In this context, agency conflicts happen between large controlling shareholders and minority outside investors, with risks of private benefits exploitation. We regressed a voluntary disclosure index on seven governance variables related either to the board structure and functioning. The empirical evidence is provided by the Italian stock market. Our results suggest the presence of a complementary relationship between governance and disclosure. Diligent monitoring activity is associated with greater transparency to the outside. The findings are consistent with the view that internal and external control tend to be present at the same time, since the presence of one of them reduces the incentive for the controlling shareholders to limit the other. The empirical evidence also show that larger boards are not detrimental to outside shareholders, with regard to voluntary disclosure. The study can contribute to the understanding of the relationship between governance and disclosure in a particular agency setting. They might be of interest to practitioners and regulators, insofar as they are consistent with calls for more disclosure requirements in this agency setting.

Audit committees are the cornerstone of corporate governance. They play a vital role in overseeing accountability, and work as a liaison between internal auditors, external auditors, executive management and the board of directors. Corporate scandals, such as the demise of Enron-Arthur Andersen in the U.S.A. and Petra Bank in Jordan, have undermined stakeholders' confidence in the capital markets. Such scandals might be caused by the lack of a corporate accountability system and by management pressure exerted on audit scope or the auditor's fee. These scandals imply a message that relying on the perceived independence of external auditors may not be sufficient and, therefore, corporate governance systems must be restructured because financial collapses may harm society and cost the government both economically and socially. This analytical research paper proposes and outlines a model of audit committee to reinforce the effectiveness of the corporate governance structure. The study recommends a Governmental Representative Member (GRM), appointed and supervised by the Audit Bureau, to be among the audit committee members of listed companies. The study model suggests that the presence of the GRM among audit committee members strengthens their effectiveness and, therefore, reinforces external auditors' independence, performance, and their ability to operate in the face of pressure from company management to issue a favourable audit opinion, thus, increasing the integrity and the soundness of the financial reporting system.

The role of committees in ensuring the quality of corporate financial reporting has come under considerable scrutiny due to recent "earnings management" cases. The purpose of this paper is to examine the association between the characteristics of audit committees (independency, financial expertise, activity, and time commitment) and earnings management as measured by the level of discretionary accruals.

Purpose -The paper examines the impact of involvement in Enterprise Risk Management (ERM) on internal auditors' willingness to report a breakdown in risk procedures and whether a strong relationship with the audit committee affects willingness to report. The study also investigates the use of ERM and the role of internal audit in ERM. Design/methodology/approach -The study uses an experimental design, manipulating (i) the internal auditor's involvement in ERM and (ii) the strength of the relationship between internal audit and the audit committee. Participants are 117 certified internal auditors. The study also gathers descriptive data on the use of ERM. Findings -The study indicates that a high involvement in ERM impacts internal auditors' willingness to report a breakdown in risk procedures to the audit committee. However, a strong relationship with the audit committee does not appear to affect willingness to report. The study also finds that the majority of organisations have recently adopted ERM. Internal auditors are involved in ERM assurance activities but some also engage in activities that could compromise objectivity. Research limitations -There are internal and external validity threats associated with the experimental design. Practical implications -The findings reinforce the need for organisations to adhere to the recommendations of the IIA and to ensure that internal auditors do not play an inappropriate role in ERM. Originality/value -The study contributes to our understanding of the impact of involvement in ERM on internal audit objectivity and of the current role of internal audit in ERM in Australia.

The purpose of this paper is to try to explain in the Moroccan context the impact of the presence of audit committees on the remuneration of external auditors including the auditors. The sample includes 27 companies divided on four sectors of activity. This limited number of firms studied is due to the requirements of the Dechow, Sloan and Sweeny (1995) model of the earning management, which requires a minimum of six (6) companies by sector. The analysis of the proposed model via the stepwise method allows in highlighting an indirect relationship between the Audit Committee and the remuneration of the auditors. This relationship is explained by: (1) The size of the company, meaning, the bigger the size of the company, the larger the earnings management, which requires a high remuneration of the auditors. (2) The percentage held by the leaders influence the remuneration received by the auditors. The results obtained explained by the size of the company (1) and the percentage held by its leaders (2) allow in concluding that the latter foster the establishment of audit committees which in turn allows in increasing the remuneration of the auditors. RESUME: L'objectif de cet article est d'essayer d'expliquer dans le contexte marocain l'impact de la présence des comités d'audit sur la rémunération des auditeurs externes notamment les commissaires aux comptes. L'échantillon choisi comprend 27 entreprises réparties sur quatre secteurs d'activité. Ce nombre limité des firmes étudiées est dû aux exigences du modèle Dechow, Sloan et Sweeny (1995) de la gestion de résultat qui exige un minimum de 6 entreprises par secteur. L'analyse du modèle proposé via la méthode Stepwise (pas à pas) permet de ressortir une relation indirecte entre le comité d'audit et la rémunération des commissaires aux comptes. Cette relation est expliquée par : (1) la taille de l'entreprise c'est à dire, plus la taille de l'entreprise est grande et plus la gestion de résultat est élevée ce qui nécessite une rémunération élevée des commissaires aux comptes. (2) le pourcentage détenu par les dirigeants influence les rémunérations perçues par les commissaires aux comptes. Les résultats obtenus expliqués par La taille de l'entreprise (1) et le pourcentage détenu par ses dirigeants (2) permettent de conclure que ces derniers favorisent la mise en place des comités d'audit qui, à leur tour permettent d'augmenter les honoraires des commissaires aux comptes.

The process of designing information technology strategy plan (ITSP) in this research is using the research methodology Mixed Methods Approaches by the scope of the research framework on the COBIT framework V.4.1 in Domain Plan and Organize, with the approach in the IT Process PO1-Define a Strategic IT Plan with coverage Detailed Control Objectives, on the activity PO1.1 IT Value Management, PO1.2 Business - IT Alignment, PO1.3 Assessment of Current Capability and Performance, and PO1.4IT Strategic Plan. As a major research framework, COBIT V.4.1 able to limit the scope of the problems in this research, and can perform transcription analysis on the various theories and frameworks that relate to the design of IT organizations. Research produces 4 outputs consisting of; identification between sustainability goals with the objectives of the IT institutions, identify the value of IT management, to get an assessment of current capability and performance, and the IT strategy plan.

The design is divided into seven discussions, namely the following; institutes goals in the context of IT in the ITB, IT leads to ITB, information architecture, application architecture, infrastructure architecture, organizational architecture, and IT Roadmap development. Classification of services in the main IT ITSP consists of Teaching and Learning Services, Academic Administration Services, Research and Expertise Service, Human Resource Development Service, Organizations Management Service, Service and Support. Discussion of the organization strategies focus on the IT Management Unit in the ITB. IT Architecture in the ITSP is divided into 4 main categories, namely information, applications, organizational, and infrastructure. The others discussion is about IT planning related with institutes business goals context, on investment and related development of IT Roadmap achievement in ITB.

Keyword: CIO, COBIT V.4.1, CSF, ITSP, McFarlan, Webometric, WCU

6/24/2020 ​New Internal Audit Foundation Report Challenges Internal Auditor Functions to Be Value Drivers

This new Internal Audit Foundation report, based on the findings of a global survey and in-depth interviews with world-class internal audit functions, addresses the question, “What is the added value of internal auditing?” It suggests concrete pointers on how to define and measure added value, and how to communicate that value to stakeholders.

The findings in this report, one of the Internal Audit Foundation’s first crowdfunded research efforts (learn more), are based on a global survey and in-depth interviews with key individuals and chief audit executives of diverse organizations considered to have best-practice internal audit functions.

The results suggest a maturity model that distinguishes “governance, risk, and control (GRC) partner,” “trusted advisor,” and “value driver” as growing roles of the internal audit function. This approach can help internal audit functions clarify what the added value of internal audit should look like, how chief audit executives (CAEs) and key stakeholders can measure the success of the function, and how internal auditors and CAEs can communicate that added value to stakeholders.

The idea of internal auditing being a value driver means it adapts to circumstances at the speed of risk, takes a seat at the table, and offers unique insights and foresight that can contribute to discussions about corporate culture, strategy, operations, and decision making.

The report’s authors, Marc Eulerich, CIA, and Rainer Lenz, CIA, QIAL, conclude that internal auditors should become value drivers if they are not already aspiring to do so.

https://na.theiia.org/news/Pages/New-Internal-Audit-Foundation-Report-Challenges-Internal-Auditor-Functions-to-Be-Value-Drivers.aspx

The article reports on our work in conducting performance measurement for the management of Information Technology (IT) by applying the Balanced Scorecard (BSC) at Mulawarman University, Samarinda, East Kalimantan, Indonesia. The results of this study are then used to propose a hybrid framework that applies both BSC and a artificial intelligence (AI) techniques in order to measure the performance of IT governance generally. This article also examines BSC’s abilities and its flexibility compared to other methods in measuring the performance of IT governance. The proposed hybrid framework is expected to yield a management that produces a scorecard measures that are more rigorous, accurate and consistent with the objectives and organizational strategies in non-profit organizations, especially educational ones.

This paper has critically analyzed the current regulatory framework of audit committee in public limited banks in Bangladesh and highlighted the Audit Committee disclosure practices by surveying all the listed banks (25) as on 30 November, 2006. After analyzing the Securities and Exchange Commission (SEC) notification and BRPD Circular, 15 disclosure variables have been identified and Audit Committee Disclosure Index (ACDI) has been computed for all the listed banks. It has been found some inconsistencies in the regulatory frameworks. Moreover, the survey findings show that the listed banks are disclosing audit committee information in varying degree (26.67 to 86.67) and in different locations of the annual report. The study also expresses its cautionary note on using chairman, vice-chairman, managing director in the audit committee, lack of existence of independent director in the committee, educational qualification of the members.

The present paper addresses the case study of a financial institution, the Kendallville Bank, developed by The Anti-Fraud Collaboration. The constituents of the Collaboration are the Center for Audit Quality, Financial Executives International, the National Association of Corporate Directors, and The Institute of Internal Auditors. These organisations are concerned with financial reporting fraud deterrence and detection. The case study approaches financial reporting fraud at a multidimensional level. It explores the corporate governance arrangements and management control instruments at place at the Kendallville Bank. The findings are discussed against the theoretical framework of the Agency Theory and the Stewardship Theory. Shortcomings of the arrangements are identified and safeguards are recommended on the background of international corporate governance best practice and academic literature. The risks arising from corporate governance weaknesses are addressed through various risk control procedures. Culture control is
acknowledged as a major instrument to improve effectiveness and performance of the bank through a shift in the interpersonal interaction of the Board members, the executive team and the auditors.

Purpose -This study aims to critically analyse the independence of the internal audit function through its relationship with management and the audit committee. Design/methodology/approach -Results are based on a critical comparison of responses from questionnaires sent out to Australian chief audit executives (CAEs) versus existing literature and best practice guidelines. Findings -With respect to the internal audit function's relationship with management, threats identified include: using the internal audit function as a stepping stone to other positions; having the chief executive officer (CEO) or chief finance officer (CFO) approve the internal audit function's budget and provide input for the internal audit plan; and considering the internal auditor to be a "partner", especially when combined with other indirect threats. With respect to the relationship with the audit committee, significant threats identified include CAEs not reporting functionally to the audit committee; the audit committee not having sole responsibility for appointing, dismissing and evaluating the CAE; and not having all audit committee members or at least one member qualified in accounting. Originality/value -This study introduces independence threat scores, thereby generating analysis of the internal audit function's independence taking into account a combination of threats.

Corporate governance is very important in our business world today, especially after the frequent non-stop worldwide financial crises. Strong corporate governance is now considered a basic condition to accept and register an organization in most of the Stock Exchange Markets all over the world. The audit committee plays a major role in corporate governance regarding the organization's direction, control, and accountability. As a representative of the board of directors and main part of the corporate governance mechanism, the audit committee is involved in the organization's both internal and external audits, internal control, accounting and financial reporting, regulatory compliance, and risk management. This paper focuses on the audit committee's powers, functions, responsibilities, and relationships within the framework of corporate governance.

The purpose of this study is to investigate the adequacy of the audit committees in Turkish Banking Sector. Considering national and international legislation, and best practices, audit committees’ adequacy involves the issues regarding committees and the responsibilities of committees. Interviews and questionnaires in 6 deposit banks were carried out to investigate the adequacy of the audit committees. The data, collected through the interviews and questionnaires, were analyzed by frequency analyses, alfa test and t-tests. According to the results, a variety of deficiencies were determined in the audit committees’ structure and responsibilities of internal control, risk management, accounting and financial reporting, independent auditing, valuation services, and rating bureaus. Although all the banks examined in the study were deposit banks, the adequacy of the audit committees varied according to the banks. Banks’ board of directors and the audit committees should update their approach in order to carry out their duties more efficiently.

Investors' reliability on financial statements decreases due to continuing corporate scandals. Many of these rogue listed companies have had dominant shareholders who have circumvented internal controls for personal gain or have hidden poor management using misleading reporting. This has led to calls for restructuring the annual financial report and to fill the gap of corporate governance constituents. This study aims to highlight the importance of combining the efforts of the audit trinity (those are: the audit committee, the external auditor and the internal auditor) in securing the financial reporting system and corporate governance. This literature-based study suggests coordinating and integrating the efforts of the audit trinity and the issue a joint report addressing all matters related to (1) safeguarding company's assets and accounts (2) ensuring that financial statements and the annual report are fair, balanced and reliable, and (3) ensure the entity's compliance with applicable laws, corporate governance code, and accounting and auditing standards. The proposed joint report is to be signed by the audit trinity and certified by the chairperson of the board. The development of this report went through two stages, the first one, reviewing related literature, internationally recognized frameworks and corporate governance best practices, and related international standards on auditing; the second stage was sending the draft of the proposed report to 20 expert referees requesting their comments on the structure and the appropriateness of the proposed report. The proposed report helps by clarifying the communication mechanism, responsibilities and powers of the audit trinity that enable them to adequately discharge their duty of maintaining corporate accountability and securing the financial reporting system. It also addressed the need to have informed and stringent control over the quality of financial ‎ reporting and avoidance of conflicts of interest‎ .

I certify that except where due acknowledgement has been made, the work is that of the author alone; the work has not been submitted previously, in whole or in part, to qualify for any other academic award; the content of the thesis is the result of work which has been carried out since the official commencement date of the approved research program; any editorial work, paid or unpaid, carried out by a third party is acknowledged; and ethics procedures and guidelines have been followed. Siridech Kumsuprom (Date 24/09/2010) [iii] I would also like to acknowledge my former senior supervisor, Professor Hepu Deng. His views encouraged me to start this research which importantly related to my educational background. I am also indebted to Dr Siddhi Pittayachawan who assisted me with the quantitative data method and analysis using SEM. With his guidance and suggestions, I have improved my knowledge of statistical methods and techniques while analysing the quantitative data. I would like to express my gratitude to the School of Business IT and Logistics, RMIT University and the Research Director, Professor Mohini Singh, who provided me with the approval for support funds to cover the expense of attending conferences and for the data collection phase in Thailand. I would also like to express my appreciation to my second supervisor, Dr Leslie Young.

Purpose – The purpose of this paper is to investigate several variables that are theoretically associated with the internal audit function (IAF) having an active role in corporate governance.
Design/methodology/approach – The paper uses responses from 782 US Chief Audit Executives (CAEs) in the CBOK (2006) database for the investigation. The paper makes the assumption that an IAF has only one CAE, thus the dataset represents 782 US IAFs.

Findings – It is found that an IAF having an active role in corporate governance is significantly and positively associated with the use of a risk-based audit plan, existence of a quality assurance and
improvement program, and audit committee input to the audit plan. Control variables such as stock-exchange listing, firm size, the existence of an internal control framework, and a CAE with an internal auditing qualification also are positively associated with the IAF having an active role in corporate governance.
Research limitations/implications – A limitation of this study is that CAE perceptions may deviate from actual practice. Also, the sample is limited to the US CAEs who are also IIA members,
thus it may not reflect the views of non-members and the CAEs from other countries.

Practical implications – The results have implications for CAEs who wish to increase the Chance for their IAFs to play an active role in corporate governance. The IIA may benefit from these results in its supporting role for the internal auditing profession.
Originality/value – The study is complementary to the literature on the existence and size of the IAF and reveals several avenues for further research.

Keywords - Internal auditing, Corporate governance, Audit committee, United States of America

Paper type - Research paper

Based on the Capital Market Supervisory Agency (BAPEPAM), the company became a member of the Indonesia Stock Exchange is required to have audit committees. Audit committee in charge and responsible for (1) encourage the formation of an adequate internal control structure, (2) improve the quality of disclosure and financial reporting, (3) assess the scope and timeliness of external audit, external audit fees and the reasonableness of the independence and objectivity of external auditors, and (4) prepare a letter outlining the duties and responsibilities of audit committees during the financial year under review by the external auditor. Numerous studies have tried to analyze the relationship between the role of audit committees and earnings management performance. This study aims to analyze the effect of audit committee independence, competence of the audit committee, and effectiveness of audit committee meetings on earnings management in manufacturing companies in Indonesia. Linear regression method is used as an analytical tool of the research. The results indicate that audit committee independence and audit committee competence affects significantly on earnings management. Meanwhile, the variable effectiveness of audit committee meetings no significant effect on earnings management of manufacturing companies listed on the Stock Exchange. Keywords: audit committee, audit committee independence, audit committee competence, effectiveness of audit committee meetings, earnings management. ABSTRAK Berdasarkan peraturan dari Badan Pengendalian dan Pengawasan Pasar Modal (BAPEPAM), sebuah perusahaan harus memiliki komite audit sebelum dapat mendaftarkan untuk menjadi anggota dari Bursa Efek Indonesia (BEI). Komite audit perusahaan bertanggung jawab untuk (1) meningkatkan perumusan dari struktur/sistem pengendalian internal yang baik, (2) meningkatkan kualitas dari laporan keuangan dan penjelasannya, (3) melakukan evaluasi terhadap ruang lingkup dan periode penugasan dari auditor eksternal, pembayaran jasa auditor eksternal, dan kewajaran dari kemandirian serta obyektifitas dari auditor eksternal, dan (4) menyiapkan surat keputusan mengenai tugas dan tanggung jawab dari komite audit selama tahun fiskal yang sedang dievaluasi oleh auditor eksternal. Penelitian terdahulu sudah melakukan analisa terhadap hubungan antara peran dari komite audit dan manajemen laba perusahaan. Penelitian ini mencoba melakukan analisa terhadap dampak dari kemandirian komite audit, kompentensi dari komite audit, dan efektifitas dari pertemuan komite audit terhadap manajemen laba di perusahaan manufaktur di Indonesia. Regresi linier digunakan sebagai alat analisa di dalam penelitian ini. Hasil analisa menunjukkan bahwa kemandirian komite audit, dan kompetensi komite audit memberikan dampak signifikan terhadap manajemen laba. Disamping itu, efektifitas komite audit tidak memberikan dampak signifikan terhadap manajemen laba di perusahaan manufaktur yang tercatat di BEI.

Increased competition, changing business environments, globalization and the advancement of Information and Communications Technology are the important factors that have forced Banking and Financial services to change. Demand for financial services is changing rapidly and customer behavior regarding these services is also adapting rapidly. Therefore, with the passing of the traditional banking sector to electronic banking, new strategies have become necessary in order to attract and retain existing customers. Despite enormous pressures for change and investment in Information Technology in the Banking field, if these investments do not work in accordance with the principles of investment, they will fail. This investigation will review available sources and studies conducted in this field, and seek to find out the main factors and challenges posed in the development of electronic banking after a relatively long period of adoption in India. This paper provides a possible six factor model centered upon the following: infrastructure, knowledge, legal-security, socio-cultural, economic and management and banking issues. The results of the study indicate that legal and security, socio-cultural, and management and banking issues are accepted as challenges for the development of e-banking but that there is less awareness regarding new technologies and unsuitable software which are ranked respectively as the highest and lowest obstacles in India.

This paper primarily examines how internal control affects the financial performance of the six banking sectors in Iraq. The inductive approach used in this paper entails the surveying, studying, comparing and summarizing of all papers published in prominent journals in the past seven years. This paper found that internal control is weak in Iraq compared to developing countries in the analyzed studies. It also found that internal control is more positively correlated to financial performance 94.28 % than negatively linked to it 5.72 %. After defining the studies through a systematic review, the researchers concluded that most studies on the two variables i.e. internal control and financial performance had indicated a significant and positive relationship between both. In addition, the researchers also found that none of the previous studies had addressed the abovementioned correlation in the context of the Iraqi banking sector.

Purpose -The aim of the paper is to examine the linkages between board ownership, audit committees' (ACs) effectiveness in terms of the proportion of independent non-executive directors (INED) and expert members on the AC and corporate voluntary disclosures. Design/methodology/approach -The paper is based on a sample of 124 public listed companies in Malaysia for studying differences in corporate governance characteristics which affect the financial disclosure. Findings -The empirical results indicate that board ownership is associated with lower levels of voluntary disclosures. The result is consistent with the notion that board ownership increases agency costs resulting from information asymmetry between firm management and outsider investors. The negative relationship between board ownership and corporate voluntary disclosure is, however, weaker for firms with higher proportion of INED on the AC indicating that INED moderate board ownership/corporate voluntary disclosure relationship. Overall, the findings lend support for firms with a higher level of board ownership to include more independent directors on the AC to increase disclosure levels and reduce information asymmetry between firm management and investors. Originality/value -The paper demonstrates the usefulness of corporate governance factors mainly board ownership and effective AC on financial reporting practices. It is expected that this research will have important policy implication to reduce information asymmetry and improves corporate governance.

This paper examines the relation between audit committee characteristics, internal audit function characteristics and internal auditors’ assessment of their contribution to financial statement audits. Using survey data from chief internal auditors of 76 Malaysian publicly-listed firms, we provide evidence of a positive relationship between internal auditors’ assessment of their contribution to financial statement audits and three audit committee characteristics: the proportion of independent audit committee members, their knowledge and experience of accounting and auditing, and the extent of audit committee review of internal audit programmes, budget and coordination proposals. Further, a positive relationship is found between internal auditors’ evaluation of their contribution to the financial statement audit and internal audit function characteristics including size, prior experience of staff in auditing, time availability and the closeness of the function’s relationship with the ...

This paper presents the findings from a study, based on the annual reports' analysis of German corporations listed in the DAX30, TecDAX, MDAX and SDAX, that investigates whether the implementation of audit committees and independent members with financial expertise leads to higher accounting quality (lower earnings management and accounting errors). The analysis of regressions conducted states a significant negative link between the independence and financial expertise of its members, earnings management and accounting errors. Significant results cannot be achieved if less than 50% of the audit committee members are independent financial experts.

The Brazilian equity market is characterized by relatively low liquidity, high cost of capital (low firm valuation), and limited new capital raising. Ownership concentration of corporations is high, with large wedges between control and cash flow rights, leading to large differences in pricing of non-voting and voting shares, reflecting the risks of expropriation by insiders. In recent years, much of

Purpose -The paper examines the impact of involvement in Enterprise Risk Management (ERM) on internal auditors' willingness to report a breakdown in risk procedures and whether a strong relationship with the audit committee affects willingness to report. The study also investigates the use of ERM and the role of internal audit in ERM. Design/methodology/approach -The study uses an experimental design, manipulating (i) the internal auditor's involvement in ERM and (ii) the strength of the relationship between internal audit and the audit committee. Participants are 117 certified internal auditors. The study also gathers descriptive data on the use of ERM. Findings -The study indicates that a high involvement in ERM impacts internal auditors' willingness to report a breakdown in risk procedures to the audit committee. However, a strong relationship with the audit committee does not appear to affect willingness to report. The study also finds that the majority of organisations have recently adopted ERM. Internal auditors are involved in ERM assurance activities but some also engage in activities that could compromise objectivity. Research limitations -There are internal and external validity threats associated with the experimental design. Practical implications -The findings reinforce the need for organisations to adhere to the recommendations of the IIA and to ensure that internal auditors do not play an inappropriate role in ERM. Originality/value -The study contributes to our understanding of the impact of involvement in ERM on internal audit objectivity and of the current role of internal audit in ERM in Australia.

The results of financial reporting have always been an issue of interest due to its importance in the economic decision-making process and as a means of communication between companies and stakeholders. According to , there is still lack of empirical evidence regarding the effectiveness of audit committees in Malaysia although their formation is mandatory. have indicated that the characteristics of audit committees can contribute to their effectiveness in ensuring the compliance of a company's financial reporting with the regulatory requirements and auditing standards. The presence of an audit committee alone does not assure that the committee will perform its duties as expected but it raises questions on the audit committees' ability in discharging their duties, especially in reviewing the accuracy of financial accounts produced by the company. This study attempts to examine the occurrence of variations between profit after tax and minority interest (PATMI) in unaudited and audited accounts in Malaysian companies. Further, the relationship between audit committee characteristics and the company producing an inaccurate unaudited account has also been explored.

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Purpose-This paper empirically analyses specific characteristics of an audit committee that could be associated with the likelihood of corporate fraud/scandal/sanctions. Design/methodology/approach-The sample includes all firms that were investigated by the Financial Reporting Council (FRC) through the audit enforcement procedure from 2014 to 2019, and two matched no-scandal firms. It uses logistic binary regression analysis to examine the hypotheses. Research findings-Results based on the logit regression suggest that audit member tenure and audit committee meeting frequency both have positive associations to the likelihood of corporate scandal. Complementing this result, we find negative but insignificant relationships among audit committee female chair, audit committee female members percentage, audit committee qualified accountants members, audit committee attendance, number of shares held by audit committee members, audit committee remuneration, board tenure and the likelihood of corporate scandal across the sample. Practical implications-The results should help regulatory policy-makers make decisions which could be crucial to future corporate governance. Additionally, these results should be useful to investors who use corporate governance as criteria for investment decisions. Originality/value-We extend, as well as contribute to the growing literature on audit committee and therefore wider corporate governance literature and provide originality in that it is the first, to our knowledge, to consider two characteristics (i.e., remuneration and gender) in a UK context of corporate scandal. Also, the results imply that the structure and diversity of audit committee affect corporate fraud/scandal/sanctions.

Konsep Good Corporate Governance (GCG) semakin banyak dikemukakan oleh para praktisi bisnis sebagai salah satu alat untuk mencegah terjadinya kasus keuangan. Salah satu komponen yang berperan penting dalam proses penerapan tata kelola perusahaan yang baik adalah komite audit. Peranan komite audit dalam menjamin kualitas pelaporan keuangan perusahaan telah menjadi sorotan sejak terjadinya skandal akuntansi yang menjadi perhatian publik. Contoh dan kasus tersebut adalah adanya kasus manajemen laba yang berhubungan dengan kecurangan manajemen perusahaan (seperti kasus waste management dan kasus WorldCom) dan kebangkru-

The purpose of this study is to examine the relationship between audit characteristics and firm investment efficiency level. Audit characteristics have been characterized using audit committee (AC) independence and external auditor choice. Top 200 Malaysian listed companies based on market capitalization were selected as a sample. Binomial logistic regression analysis was employed to test the hypotheses for 3 years, that is, 2009, 2010, and 2011. The statistical results show no relationship between AC independence and investment inefficiency, while auditor choice was shown to be positively significant only in 1 year of the study, but was not significant in the other 2 years of study. The results provide further confirmation of the role of corporate governance in enhancing the investment performance of the company. This study provides an indicator to shareholders and investors that a company with strong governance structure will likely make better investment decision. Managers under strong governance are prevented from taking an aggressive investment risk approach that may result in overinvestment. In addition, the company will carefully plan to have an adequate capital so that a good opportunity investment will not being passed due to insufficient financing that will result underinvestment. This study is original, as it focuses on the direct relationship between corporate governance mechanism and firm investment efficiency level that is scarce in the literature, with a special focus on emerging markets in the process of developing their best governance practices.