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Marianne Ojo - One of the best experts on this subject based on the ideXlab platform.
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A Global Perspective on the Changing Perceptions of the Role of the External Auditor and the Significance of Audit Developments
SSRN Electronic Journal, 2012Co-Authors: Marianne OjoAbstract:Through a consideration of factors which have resulted in a more reduced role for the External Auditor in certain jurisdictions – when compared to others, this paper will consider, as well as highlight why an enhanced awareness of the role of the External Auditor in such jurisdictions will be vital in an increasingly globalised financial system. It will do so through a consideration of the current, past and future perceptions of External Auditors’ roles – with particular reference to selected jurisdictions from Africa, Asia and Latin America.
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The Role of the External Auditor in Bank Regulationand Supervision
2009Co-Authors: Marianne OjoAbstract:This research not only proposes an alternative single regulator model for the UK, but also addresses how the External Auditor could assist the regulator through an indirect system of supervision which provides for the most effective means of obtaining and evaluating crucial information relating to the well-being of a financial institution. In recommending the External Auditor’s expertise, such issues concerning the need for greater pro- active monitoring by regulators, safeguards operating to ensure that the External Auditor can fulfil his roles effectively, the need for clearer definition of the External Auditor’s role (reducing the audit expectations gap), and audit liability interalia require consideration. Even though the External Auditor could not gain access to such information as the central bank's early warning indicators, there’s still a role for the External Auditor at an individual firm level in providing vital information and performing numerous specialised tasks. As well as this role, the role of assisting the regulator in such a way as to avoid “regulatory capture”, will be considered briefly.
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Auditor Independence - Its Importance to the External Auditor's Role in Banking Regulation and Supervision
SSRN Electronic Journal, 2009Co-Authors: Marianne OjoAbstract:The role of the External Auditor in the supervisory process requires standards such as independence,objectivity and integrity to be achieved. Even though the regulator and External Auditor perform similar functions, namely the verification of financial statements, they serve particular interests. The regulator works towards safeguarding financial stability and investor interests. On the other hand, the External Auditor serves the private interests of the shareholders of a company. The financial audit remains an important aspect of corporate governance that makes management accountable to shareholders for its stewardship of a company. The External Auditor may however, have a commercial interest too. The debate surrounding the role of External Auditors focusses in particular on Auditor independence. A survey by the magazine “Financial Director” shows that the fees derived from audit clients in terms of non-audit services are significant in comparison with fees generated through auditing. Accounting firms sometimes engage in a practice called “low balling” whereby they set audit fees at less than the market rate and make up for the deficit by providing non audit services. As a result, some audit firms have commercial interests to protect too. There is concern that the Auditor's interests to protect shareholders of a company and his commercial interests do not conflict with each other. Sufficient measures need to be in place to ensure that the External Auditor's independence is not affected. Brussels proposed a new directive for Auditors to try to prevent further scandals such as those of Enron and Parmalat. The new directive states that all firms listed on the stock market must have independent audit committees which will recommend an Auditor for shareholder approval. It also states that Auditors or audit partners must be rotated but does not mention the separation of Auditors from consultancy work despite protests that there is a link to compromising the independence of Auditors. However this may be because Brussels also shares the view that there is no evidence confirming correlation between levels of non-audit fees and audit failures and that as a result, sufficient safeguards are in place.
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the role of the External Auditor in bank regulation and supervision a comparative analysis between the uk germany italy and the us
2008Co-Authors: Marianne OjoAbstract:This comparative analysis discusses the differences between the structure and systems of bank regulation operating in the UK, Germany, Italy and the US. The importance of harmonisation in achieving stated supervisory objectives is also emphasised. The main objective of this chapter is to illustrate how the External Auditor's role could be harnessed more efficiently in the UK banking regulatory and supervisory process. This is of particular importance given the reduced supervisory role which the Bank of England has assumed since banking regulatory and supervisory powers and functions were transferred to the Financial Services Authority. External audits and in particular External Auditors, have a greater role to play in bank regulation and supervision than was the case over 20 years ago. This is so mainly as a result of globalisation. The need for a single regulator which regulates not just the banking sector, but also the insurance and securities sectors, has arisen principally because of the rise of conglomerate firms. Single regulators are able to manage more effectively cross sector services' risks. Correspondingly, the functional overlaps between banking, insurance and securities business and their universal scope make it more difficult for a regulator to observe and comprehend such businesses. The difficulty of measuring and assessing risk within such institutions along with the speed with which assets can be adjusted in derivatives markets has led to more emphasis being placed on internal managerial control. Consideration is also being given to the structures that can be put in place to re inforce the incentives of all parties involved – not just to management but all parties including Auditors and regulators. Because banking has evolved to a stage where conglomerates now have a significant presence and provide a range of services (and not just banking services), and because of the growing presence of international firms, the role of the External Auditor has become so important.
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comparative analysis between the External Auditor s role in bank regulation and supervision
MPRA Paper, 2007Co-Authors: Marianne OjoAbstract:This comparative analysis discusses the differences between the structure and systems of bank regulation operating in the UK, Germany, Italy and the US. The importance of harmonisation in achieving stated supervisory objectives is also emphasised. The main objective of this chapter is to illustrate how the External Auditor's role could be harnessed more efficiently in the UK banking regulatory and supervisory process. This is of particular importance given the reduced supervisory role which the Bank of England has assumed since banking regulatory and supervisory powers and functions were transferred to the Financial Services Authority. External audits and in particular External Auditors, have a greater role to play in bank regulation and supervision than was the case over 20 years ago. This is so mainly as a result of globalisation. The need for a single regulator which regulates not just the banking sector, but also the insurance and securities sectors, has arisen principally because of the rise of conglomerate firms. Single regulators are able to manage more effectively cross sector services' risks. Correspondingly, the functional overlaps between banking, insurance and securities business and their universal scope make it more difficult for a regulator to observe and comprehend such businesses. The difficulty of measuring and assessing risk within such institutions along with the speed with which assets can be adjusted in derivatives markets has led to more emphasis being placed on internal managerial control. Consideration is also being given to the structures that can be put in place to re inforce the incentives of all parties involved – not just to management but all parties including Auditors and regulators. Because banking has evolved to a stage where conglomerates now have a significant presence and provide a range of services (and not just banking services), and because of the growing presence of international firms, the role of the External Auditor has become so important.
R Butler - One of the best experts on this subject based on the ideXlab platform.
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an analysis of service oriented architecture soa to determine the impact on the activities performed by the External Auditor of a soa service consumer
Meditari Accountancy Research, 2008Co-Authors: R ButlerAbstract:Various forms of IT sourcing used by audit clients create issues of concern for External Auditors. This article investigates the nature and basic characteristics of service‐oriented architecture (SOA), a modern information system architecture strategy, to ascertain whether the use of SOA by a service consumer audit client would have an impact on the activities typically performed by the External Auditor. It was found that SOA presents a complete shift in the way IT application functionality is constructed and integrated and inevitably effects changes in the accounting system and the related internal controls of the SOA service consumer. As a result SOA has a significant impact on the activities performed during the audit process and introduces various SOA‐related aspects that need to be considered by the External Auditor of a SOA service consumer.
Myung Soo Son - One of the best experts on this subject based on the ideXlab platform.
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the impact of labour unions on External Auditor selection and audit scope evidence from the korean market
Applied Economics, 2017Co-Authors: Ju Ryum Chung, Eun Jung Cho, Ho Young Lee, Myung Soo SonAbstract:We examine whether labour unions influence External Auditor selection and audit scope. As a major user group of financial information, labour unions likely demand financial information of high quality and thus high-quality audits. As a union’s request for wage increases is likely strong when a firm is performing well, management facing wage negotiations with the labour union has incentives to manipulate earnings downward and may therefore prefer Auditors who allow more discretion. Using union data unique to Korea during 2005–2008, we find that firms with a stronger labour union tend to choose higher-quality Auditors (i.e. Big N or industry specialist Auditors). We also find that unionization is negatively (positively) associated with positive (negative) abnormal audit fees and audit hours, and the effects are more pronounced when the union is stronger and more active. Given that departures from normal audit fees and audit hours in either direction arguably impair audit quality, this finding is consistent with our prediction of unions’ demand for high-quality audits. Overall, our findings suggest that labour unions play an important role in determining audit quality.
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the impact of labor unions on External Auditor selection and audit scope
한국회계학회 학술발표논문집, 2015Co-Authors: Ju Ryum Chung, Eun Jung Cho, Ho Young Lee, Myung Soo SonAbstract:We examine whether labor unions influence External Auditor selection and audit scope. As a major user group of financial information, labor unions likely demand financial information of high quality and thus high quality audits. As a union’s request for wage increases is likely strong when a firm is performing well, management has incentives to manipulate earnings downward and may therefore prefer less strict Auditors. Using union data unique to Korea, we find that unionized firms tend to choose higher-quality Auditors (i.e., Big N or industry-specialist Auditors) than do non-unionized firms. We also find that unionization is negatively (positively) associated with positive (negative) abnormal audit fees and audit hours. Given that departures from normal audit fees and audit hours in either direction arguably impair audit quality, our finding is consistent with unions’ demand for high-quality audits. The findings on unions’ effects are more pronounced when the union is stronger and more active. Our findings suggest that labor unions play an important role in determining audit quality.
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do lengthy Auditor tenure and the provision of non audit services by the External Auditor reduce audit report lags
International Journal of Auditing, 2009Co-Authors: Ho Young Lee, Vivek Mande, Myung Soo SonAbstract:This study examines whether audit report lags (ARLs) are influenced by Auditor tenure and the provision of non-audit services by the External Auditor. Studying this association is important because ARLs are directly associated with audit efficiency and with the timeliness of companies' announcements of earnings. Our results show that both Auditor tenure and non-audit services are significantly associated with ARLs. With regard to Auditor tenure, we find that ARLs decline as Auditor tenure lengthens, indicating that Auditors with long tenure are able to audit their clients more efficiently. This finding suggests that Auditor changes, mandatory or otherwise, impose additional costs on clients and increase informational inefficiencies in the form of delayed information to markets. With regard to non-audit services, we find that there is a significant negative association between non-audit service fees and ARLs, which suggests that the provision of non-audit services increases Auditor learning, thus reducing audit delays.
Jeff L. Payne - One of the best experts on this subject based on the ideXlab platform.
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Management Trade‐Offs of Internal Control and External Auditor Expertise
Ear and Hearing, 2003Co-Authors: Kevan L. Jensen, Jeff L. PayneAbstract:Managers of organizations establish control systems to reduce the agency costs inherent in those organizations. Control systems include both internal and External control mechanisms, some of which may be viewed as substitutes for each other. We develop a model of the demand for External Auditor industry expertise and then examine whether managers substitute such expertise for certain closely related internal control mechanisms in their overall control systems. Using a sample of municipalities, we find evidence that managers who do not hire internal Auditors or who hire accounting personnel with low levels of accounting expertise tend to hire External Auditors with higher levels of industry expertise. We interpret this to be a conscious trade‐off on the part of the managers, which appears to be linked to the costs of hiring the internal mechanisms in question.
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management trade offs of internal control and External Auditor expertise
Ear and Hearing, 2003Co-Authors: Kevan L. Jensen, Jeff L. PayneAbstract:Managers of organizations establish control systems to reduce the agency costs inherent in those organizations. Control systems include both internal and External control mechanisms, some of which may be viewed as substitutes for each other. We develop a model of the demand for External Auditor industry expertise and then examine whether managers substitute such expertise for certain closely related internal control mechanisms in their overall control systems. Using a sample of municipalities, we find evidence that managers who do not hire internal Auditors or who hire accounting personnel with low levels of accounting expertise tend to hire External Auditors with higher levels of industry expertise. We interpret this to be a conscious trade‐off on the part of the managers, which appears to be linked to the costs of hiring the internal mechanisms in question.
Richard Fisher - One of the best experts on this subject based on the ideXlab platform.
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role stress the type a behavior pattern and External Auditor job satisfaction and performance
Behavioral Research in Accounting, 2001Co-Authors: Richard FisherAbstract:This study examines the relationship between elements of role stress and two important External Auditor job outcome variables: job satisfaction and performance. The study extends prior research by examining the moderating influence of the Type A behavior pattern on these relationships. The need to re‐examine the linkages between the elements of role stress and both job satisfaction and job performance using theoretically based moderators, such as the Type A behavior pattern, has been highlighted in the role‐stress literature. Analysis of survey data confirmed that both role conflict and role ambiguity are significantly negatively associated with Auditor job performance and job satisfaction. However, the expected moderating role of the Type A behavior pattern on the relationships between the components of role stress and job satisfaction and Auditor job performance was not found. Interestingly, however, a direct positive relationship between the Type A behavior pattern and both job outcome variables was ap...
