Auditor disaffiliation program in China and auditor independence

SUMMARY: This study examines whether the disaffiliation program introduced by the Chinese government improved auditor independence and whether auditor quality affects this relationship. Auditor independence is measured in terms of the likelihood of receiving a qualified report and the level of earnings management (measured by noncore operating income). The results show that the likelihood of receiving qualified audit opinions for listed companies significantly increased, and noncore operating earnings significantly decreased, after auditors were disaffiliated. However, companies audited by auditors without any affiliation also showed an increase in the likelihood of receiving qualified opinions and a decrease in noncore operating earnings, possibly because of the increased surveillance by the regulatory bodies that accompanied the act of disaffiliation. The results also show that the association between the disaffiliation program and the likelihood of receiving qualified audit opinions is stronger for small auditors than for large auditors, possibly because of the initial lower audit quality of small auditors. Auditor size, however, did not significantly affect the association between the disaffiliation program and noncore operating earnings.

The evolution of clinical audit as a tool for quality improvement.

Clinical auditing practices are recognized universally as a useful tool in evaluating and improving the quality of care provided by a health service. External auditing is a regular activity for mental health services in Australia but internal auditing activities are conducted at the discretion of each service. This paper evaluates the effectiveness of 6 years of internal auditing activities in a mental health service. A review of the scope, audit tools, purpose, sampling and design of the internal audits and identification of the recommendations from six consecutive annual audit reports was completed. Audit recommendations were examined, as well as levels of implementation and reasons for success or failure. Fifty-seven recommendations were identified, with 35% without action, 28% implemented and 33.3% still pending or in progress. The recommendations were more likely to be implemented if they relied on activity, planning and action across a selection of service areas rather than being restricted to individual departments within a service, if they did not involve non-mental health service departments and if they were not reliant on attitudinal change. Tools used, scope and reporting formats have become more sophisticated as part of the evolutionary nature of the auditing process. Internal auditing in the Barwon Health Mental Health Service has been effective in producing change in the quality of care across the organization. A number of evolutionary changes in the audit process have improved the efficiency and effectiveness of the audit.

Business group affiliation, board quality and audit pricing behavior: evidence from indian companies

This study examines the relationships among business group affiliation, board quality and audit fees in an emerging market setting. Using data from Indian firms listed on the Bombay Stock Exchange (BSE) over a nine-year period (2004-2012), our results indicate that firms affiliated with a business group pay higher audit fees than those without such affiliations. We also find that group-affiliated firms with higher-quality boards pay relatively higher audit fees compared to other counterparts. Further, our findings suggest that group-affiliated firms pay lower fee premiums when an audit is undertaken by a Big 4 firm or its affiliates, which implies that economies of scale may be a potential competitive advantage held by larger auditors. The results of the study have implications for the management of audit fees by group-affiliated firms through board structure and processes.

Knowledge mediation in software quality engineering

The risk of failure of the software development process remains high despite many attempts to improve the quality of software engineering. Contemporary approaches to process assurance, such as the capability maturity model have not prevented systemic failures, nor have project management methodologies provided guarantees of software quality. The paper proposes an approach to software quality assurance based on a knowledge mediated concurrent audit, which incorporates essential feedback processes. Through a tightly integrated approach to quality audit, programmers would be empowered to use any chosen methodology to advantage, supported by intelligent monitoring of the essential interactions which occur in the development process. An experimental application implementing some aspects of the proposal is described

An Australian response to recent developments in the market for audit services

Where the quality - both competence and independence - of an audit is tested, often in the circumstance of a corporate failure, auditors frequently have good defenses as to their competency but rarely do they have equally convincing defenses for the objectivity of their decision-making or the independence of their audit. It is recommended that large audit firms establish an independence board with the authority to define, review and decide upon all threats and potential threats to independence. It would also have responsibility for quality-control and educational programs in respect of audit firm's independence decision-making. Firms would make transparent the processes of the boards, their membership and quality-control procedures. Firms would compete on their independence control processes and not just competence and price. Additionally, firms need to encourage a culture that rewards personnel for seeking counsel on issues pertinent to independence.

Risk management and ethical environment : effects on internal audit and accounting control procedures

This study examines the impact of the scope of risk management and ethical environment on internal audit activities and the quality of accounting control procedures (ACPQ). The conceptual framework for the study is guided by COSO’s frameworks on internal controls and enterprise risk management and data from a questionnaire survey of 64 Australian firms are analysed using a structural equation model. The results of the study support that (1) internal audit activities have a significant intervening effect on the relationship between the scope of risk management and ACPQ, and (2) a direct and positive relationship exists between ethical environment and ACPQ. Our findings suggest that widening the scope of risk management activities do not directly improve ACPQ, but that it leads to more extensive internal audit activities and in turn such activities promote better ACPQ. Further, the results indicate that fostering a more ethical environment directly leads to higher ACPQ. These results have implications for the design of internal controls, namely with respect to the role of internal audit activities and ethical environment in enhancing ACPQ.

Quality of internal control procedures : antecedents and moderating effect on organisational justice and employee fraud

Purpose – This study aims to bring together theoretical concepts from the organizational justice, internal control and fraud literature to develop two distinct models relating to employee fraud and the quality of internal control procedures (ICP), respectively.

Design/methodology/approach – Survey data from 64 Australian firms were used to develop the two models. The first model was tested using a logistic regression analysis, and the second model was tested using a multiple regression analysis.

Findings – The first model reveals that the quality of ICP has a moderating effect on the relationship between perceptions of organizational justice and employee fraud. The second model indicates that ICP quality is significantly and positively related to three key organizational factors: the corporate ethical environment, the extent of risk management training of staff, and the internal audit (IA) activity level.

Practical implications – Risk management strategies relating to employee fraud will need to pay greater attention to organizational factors that affect both perceptions of justice at the workplace and ICP quality, including fostering a more ethical and equitable work environment, increasing IA activities and staff training in risk management.

Originality/value – Using the fraud triangle framework, this study extends previous literature by providing empirical evidence on the role of organizational justice and ICP regarding employee fraud.

Outsourcing internal audit services : an empirical study on Queensland public-sector entities

A study of Queensland public-sector entities suggests outsourcing of internal audit services to be extensive (88%), with 51% of respondent agencies adopting co-sourcing and 37% of the agencies fully outsourcing. Results suggest that internal audit outsourcing is largely adopted for non-financial reasons such as lack of technological know-how and service quality rather than financial reasons. Deficiencies of current governance arrangements concerning internal audit outsourcing include (1) a lack of audit committee involvement in outsourcing processes, particularly in co-sourcing entities, and (2) inadequate segregation of duties whereby the same senior management is involved in key arrangements including selection, approval, negotiation and evaluation of contractual performance.

Want to know about quality in higher education? Ask an academic

How would you decide on the quality of a higher education institution? Would you (1) ask the academic registrar (or equivalent); (2) look up the most recent quality audit report; or (3) contact the teaching staff directly to discuss their perceptions about the quality of the services provided in their institution? While there is no one correct answer to the above question, the proposition underpinning the empirical research reported in this paper is: If you really want to know about quality in higher education, then ask those closest to the student-academic interface—the academics or the students. This paper focuses on the former. Using a postal survey, the views of accounting academics from 39 Australian universities about quality in accounting education were investigated from two perspectives—beliefs (what is currently occurring) and attitudes (what ought to be occurring). The findings suggest differences in those beliefs and attitudes, and an overall view that quality in accounting education has declined over recent years.

A preliminary investigation of the utility of the "Behavior support plan quality evaluation guide II" for use in Australia

Background The quality of behaviour support plans (BSPs) can be an important influence on the quality of the support provided to people with disability who show challenging behaviours. The Behavior Support Plan Quality Evaluation Guide II (BSP-QE II) is one tool that may be useful in assessing the quality of behaviour support plans. It has previously been used to assess BSPs to support children in schools in the USA. In this preliminary study, we examined the utility of the BSP-QE II for assessing behaviour support plans designed for adults with an intellectual disability in community support services in Australia.

Method  Experienced practitioners were surveyed concerning the relevance of BSP-QE II components to the evaluation of BSPs in Australia, and an audit was conducted of randomly selected BSPs submitted as a statutory requirement to the Office of the Senior Practitioner.

Results  The BSP-QE II showed evidence of acceptable construct validity and interrater reliability. There was evidence of a need for substantial improvement in the quality of BSPs, consistent with previous findings conducted using other audit tools.

Conclusions The findings support the utility of the BSP-QE II, to inform and evaluate service planning in supporting adults with intellectual disability who show challenging behaviour.

Not all roads lead to Rome - a review of quality of life measurement in diabetes

Aims Quality of life (QoL) is recognized widely as an important health outcome in diabetes, where the burden of selfmanagement places great demands on the individual. However, the concept of QoL remains ambiguous and poorly defined. The aim of our review is to clarify the measurement of QoL in terms of conceptualization, terminology and psychometric properties, to review the instruments that have been used most frequently to assess QoL in diabetes research and make recommendations for how to select measures appropriately.

Methods A systematic literature search was conducted to identify the ten measures most frequently used to assess QoL in diabetes research (including clinical trials) from 1995 to March 2008.

Results Six thousand and eight-five abstracts were identified and screened for instrument names. Of the ten instruments most frequently used to assess ‘QoL’, only three actually do so [i.e. the generic World Health Organization Quality of Life (WHOQOL) and the diabetes-specific Diabetes Quality of Life (DQOL) and Audit of Diabetes-Dependent Quality of Life (ADDQoL)]. Seven instruments more accurately measure health status [Short-Form 36 (SF-36), EuroQoL 5-Dimension (EQ-5D)], treatment satisfaction [Diabetes Treatment Satisfaction Questionnaire (DTSQ)] and psychological well-being [Beck Depression Inventory (BDI), Hospital Anxiety and Depression Scale (HADS), Well-Being Questionnaire (W-BQ), Problem Areas in Diabetes (PAID)].

Conclusions No single measure can suit every purpose or application but, when measures are selected inappropriately and data misinterpreted, any conclusions drawn are fundamentally flawed. If we value QoL as a therapeutic goal, we must ensure that the instruments we use are both valid and reliable. QoL assessment has the proven potential to identify ways in which treatments can be tailored to reduce the burden of diabetes. With careful consideration, appropriate measures can be selected and truly robust assessments undertaken successfully.

Factors influencing quality of behaviour support plans and the impact of plan quality on restrictive intervention use

Background: The quality and effectiveness of the support provided to people with disability who show challenging behaviour can be influenced by the design and content of their behaviour support plans (BSPs). This study examined some of the factors that might influence the quality of behaviour support plans and the impact of quality of BSPs on the use of restrictive intervention.

Method: An audit of the quality of a sample of BSPs submitted to the Senior Practitioner in Victoria in the years 2009 and 2010 was conducted using the Behavior Support Plan Quality Evaluation, 2nd Edition (BSP-QE II).

Results: Factors found to positively influence quality of BSPs included: involvement of behaviour consultants and involvement of clinicians from the Office of the Senior Practitioner (Office). Overall quality of plans was also negatively related to restrictive intervention use over time.

Conclusions: The findings support the need for behaviour intervention and provision of clinical support. The findings also provide tentative support for the notion that the inclusion of evidence-based quality components into behaviour support plan formats may reduce the use of restrictive interventions.

Accountability, quality assurance and performativity : the changing role of the academic board

This article undertakes a review of Australian and international literature and higher education policy in response to the changing nature of university academic boards (also known as academic senates or faculty senates). It shows that governance has become an issue for both the state and for universities and that within this context risk management and accountability mechanisms such as academic quality assurance are taking an increasingly prominent role. These developments have altered the form and function of academic governance and have fundamentally affected the academic board. For example, some literature reports that the role of Australian academic boards now largely revolves around academic quality assurance and it is argued that this is potentially problematic because of a focus on audit-driven accountability mechanisms. However, the article concludes by suggesting that as part of a broader quality assurance framework there is also an opportunity for academic boards to have a central role in the development of academic standards that focus on enhancing learning outcomes rather than on compliance.