Environmental management system auditing within Australasian companies

Reviews the literature on environmental management auditing, and surveys 132 ISO 14001 certified organizations in Australia and in New Zealand. Identifies the main reason for internal environmental audit, and the most frequent actions that result from the audit process, such as formation of a preventive plan. Looks at review procedures by top management, and the frequency of audit. Reveals the length of time an audit takes and the method of documentation adopted, by different industries. Notes six major findings and recommends sharing the findings of audits with employees and  suppliers so that improvements can be identified and implemented.

Occupational safety and health management systems in Australia: barriers to success

The growing popularity of occupational safety and health management systems in Australia has stimulated critical debate about their effectiveness. This paper asks whether the performance of such systems lives up to expectations. Making use of a research review and an extensive interviewing programme, the paper draws several conclusions. First, it observes that the definitional requirements for an occupational safety and health management system have been watered down, making it more likely that organisations can claim to have a system, but less likely that it will be effective. Second, a review of empirical research reinforces the view that systems can improve health and safety outcomes, but only if they meet strict conditions concerning senior management commitment, effective workforce involvement and programme integration. Third, several barriers to successful implementation are identified, including the failure to meet essential success factors, the inappropriate application of audit tools to ensure compliance, and their problematic application in certain sectors such as small business, contractors, and the part-time and temporary workforce. The paper concludes that occupational safety and health management systems can live up to their promise, but often fail to do so because of inadequate implementation or application in hostile environments.

An audit of leadership styles in E-commerce

Inevitably the adoption of any new technology brings about change but e-commerce is significantly different in that it completely shifts global business into a fast-paced electronic environment. The old notions of management are totally ineffective and a new style, focused on "leadership”, is required – but what style of leadership? The findings of an audit on leadership styles indicate that organisations that have successfully integrated e-commerce have exhibited a unique approach. Using a change management matrix, which determines the impact of change versus leadership style within an organisation, 182 Australian managers were audited and positioned within this matrix. It was found that within the most successful organisations, leaders had a distinctive style that facilitated the appropriate change and established a conducive e-commerce environment.

Criticisms of auditors and earnings management during the Asian economic crisis

Auditors were criticised during and after the Asian economic crisis for supplying variable quality across global audit markets. This study examines
the level of earnings management as measured by discretionary accruals in the pre-crisis compared to the post-crisis periods as they impacted Malaysia. Both the Jones (1991) and earnings per share frequency distribution methods are used to examine earnings management behaviour. As hypothesised, the pre-crisis period is associated with significantly higher levels of absolute discretionary accruals and increased propensity to meet or beat the prior year earnings per share, whereas the post-crisis period is not. This finding is consistent with auditors responding to the criticisms that were made. However, the propensity to avoid losses is found to be higher in the post-crisis period, indicating that earnings management is not fully constrained.

Sedation and analgesia management for mechanically ventilated adults: literature review, case study and recommentations for practice.

The quality of sedation management in mechanically ventilated patients has been a source of concern in recent years. This paper summarises the literature on the principles of optimal sedation, discusses the consequences of over and undersedation, highlighting the importance of appropriate pain management, and presents a case study using the results of an audit of 48 mechanically ventilated adults. As a result of the review and audit, we are implementing changes to practice.

The most important recommendations from the literature are the use of a sedation scale, setting of a goal sedation score, appropriate pain management and implementation of a nurse initiated sedation algorithm. Other recommendations include use of bolus rather than continuous sedative infusions and recommencing regular medications for anxiety, depression and other phychiatric disorders as soon as possible. A recommendation arising from our audit was the need to identify patients at high risk of oversedation and undersedation and adopt a proactive rather than reactive approach to management. The practice goal is to provide adequate and appropriate analgesia and anxiolysis for patients. This will improve patient comfort while reducing length of mechanical ventilation and minimising risk of complications.

An exploratory study on internal audit independence in Australia

This study draws on agency and institutional theory to examine the issue of internal audit’s independence through its relationship with components of corporate governance.

The internal audit function is actively considered as one of the four components of corporate governance, along with the board, management and external auditors. It serves this purpose by providing a range of services in its capacity of monitoring and consulting which is actively sought by the other components of corporate governance to satisfy their extended accountability requirements. The integrity of these services is, however, only assured if internal audit maintains its independent status. As such there is a “tension” resulting from the pressure to provide these value added services as perceived by the parties involved and maintaining its independence status.

Based on an extended survey with organisations in the Australian corporate sector, this study critically examines the results of the survey against existing literature and best practice guidelines to determine if internal audit functions operating under this tense environment are operating independently.

The results indicate an interesting analysis. While it indicates a somewhat trend in complying with best practice guidelines for maintaining independence, it also indicates that this is not consistently adhered to as organisations are able to operate in an environment that compromises internal audit independence. A main reason for this appears to be a mix of internal audit structural set ups brought about by a lack of statutory backing to provide for consistency in implementation of best practice guidelines for maintaining independence. This is exacerbated by internal audit being viewed as partner by these parties thus widening the “tension” gap between its advisory role and its independent status. A wider question emerges which questions the ability to maintain this independence concept under a partnership management environment. The concept of internal audit being an independent function as promulgated by the Institute of Internal Auditors through its definition of internal audit is seriously questioned under the totality of this environment.

The marketing audit and organizational performance an empirical profiling

This study investigates the use of strategy to address changes in business performance. It suggests the use of the marketing audit as a facility that can assist with the establishment, maintenance, and management of a market orientation strategy. The practice of the marketing audit and its perceived benefits are examined, and their relationships with change in business performance are investigated. The results indicate a positive association between the usage of the marketing audit and increase in market share, and a stronger increase in market share than increase in overall financial performance.

Corporate governance, firm characteristics and risk management committee formation in Australian companies

Purpose – The purpose of this paper is to examine how a risk management committee (RMC), as a newly evolving sub-committee of the board of directors, functions as a key governance support mechanism in the oversight an organisation's risk management strategies, policies and processes. However, empirical evidence on the factors associated with the existence and the type of RMCs remains scant.

Design/methodology/approach – Using an agency theory perspective, this study investigates the association between board factors such as proportion of non-executive directors, Chief Executive Officer duality, and board size; as well as, other firm-related factors (e.g. auditor type, industry, leverage, and complexity), and the existence of a RMC, and the type of RMC (namely, a separate RMC versus one that is combined with the audit committee). Data was collected from the annual reports of the top 300 Australian Stock Exchange (ASX)-listed companies.

Findings – The results, based on logistic regression analyses, indicate that RMCs tend to exist in companies with an independent board chairman and larger boards. Further, the results also indicate that in comparison to companies with a combined RMC and audit committee, those with a separate RMC are more likely to have larger boards, higher financial reporting risk and lower organisational complexity.

Research limitations/implications – Data limited to top 200 top ASX-listed companies, thus restricting generalisability of the results.

Originality/value – The findings of this study provide additional information on the use and design of RMCs in a voluntary setting.

Internal auditor perceptions on audit committee interactions : a qualitative study in Malaysian public corporations

Audit committees (AC) and the internal audit function (IAF) are two key corporate governance mechanisms. The primary objective of this study is to provide insights into internal auditors' perceptions of their interactions with AC members in Malaysia. The paper thus contributes to the extant literature by providing additional evidence from a South-east Asian country which is recognised as being characterised with a high power distance culture and a developing capital market. The findings are based on in-depth interviews of the heads of the internal audit function (HIAFs) from 11 publicly listed companies. The results indicate infrequent informal communications and limited private meetings between the HIAFs and ACs, and a need for clear reporting lines. Further, ACs are seen to be held in high esteem for their authority and are expected to take on greater leadership in the inquiry of management's decision-making. These findings highlight the importance of the leadership role of ACs in supporting the IAF.

The existence and nature of risk management committees in Australian companies

A risk management committee (RMC), as a newly evolving sub-committee of the board of directors, functions as a key governance support mechanism in the oversight an organisation’s risk management strategies, policies and processes. However, empirical evidence on the factors associated with the existence and the type of RMCs remains scant. Using an agency theory perspective, this study investigates the association between board factors such as proportion of non-executive directors, CEO duality, and board size; as well as, other firm-related factors (e.g. auditor type, industry, leverage, and complexity), and (1) the existence of a RMC, and (2) the type of RMC (namely, a separate RMC versus one that is combined with the audit committee). Data was collected from the annual reports of the top 300 ASX-listed companies. The results, based on logistic regression analyses, indicate that RMCs tend to exist in companies with an independent board chairman and larger boards. Further, the results also indicate that in comparison to companies with a combined RMC and audit committee, those with a separate RMC are more likely to have larger boards, higher financial reporting risk and lower organisational complexity. The findings of this study provide additional information on the use and design of RMCs in a voluntary setting.

Oxygen delivery to patients after cardiac surgery : a medical record audit

OBJECTIVE: To describe how intensive care nurses manage the administration of supplemental oxygen to patients during the first 24 hours after cardiac surgery.
METHODS: A retrospective audit was conducted of the medical records of 245 adult patients who underwent cardiac surgery between 1 January 2005 and 31 May 2008 in an Australian metropolitan hospital. Physiological data (oxygen saturation measured by pulse oximetry and respiratory rate) and intensive care unit management data (oxygen delivery device, oxygen flow rate and duration of mechanical ventilation) were collected at hourly intervals over the first 24 hours of ICU care.
RESULTS: Of the 245 patients whose records were audited, 185 were male; mean age was 70 years (SD, 10), and mean APACHE II score was 17.5 (SD, 5.14). Almost half the patients (122, 49.8%) were extubated within 8 hours of ICU admission. The most common oxygen delivery device used immediately after extubation was the simple face mask (214 patients, 87%). Following extubation, patients received supplemental oxygen via, on average, two different delivery devices (range, 1-3), and had the delivery device changed an average of 1.38 times (range, 0-6) during the 24 hours studied. Twenty-two patients (9%) received non-invasive ventilation or high-flow oxygen therapy, and 16 (7%) experienced one or more episode of hypoxaemia during mechanical ventilation. A total of 148 patients (60%) experienced one or more episodes of low oxygenation or abnormal respiratory rate during the first 24 hours of ICU care despite receiving supplemental oxygen.
CONCLUSION: These findings suggest that the ICU environment does not protect cardiac surgical patients from suboptimal oxygen delivery, and highlights the need for strategies to prompt the early initiation of interventions aimed at optimising blood oxygen levels in cardiac surgical patients in the ICU.

Occupational health and safety management systems : system types and effectiveness

The aim of this thesis is to develop a framework to evaluate the relative performance of different types of health and safety management system. This objective is an analytical one, but it stems from a policy issue of public importance. Over the past decade Australia, like other countries, has seen the emergence and growth of interest in developing health and safety management systems. But are they all the same, and if not, do they differ in their effectiveness? The thesis does not seek to give a definitive answer to these questions. Given the novelty of the phenomenon and the lack of research on this subject, the research is exploratory. An hypothesis about the effectiveness of different health and safety management systems is developed rather than tested. The thesis proceeds by first defining health and safety management systems as a combination of the planning and review, the management arrangements, the consultative arrangements and the specific program elements that work together in an integrated way to improve health and safety performance. A research procedure is described involving twenty exploratory case studies. The thesis then - develops - from the literature and the case study research - an analytical framework to evaluate the performance of different health and safety management systems. That framework has two parts. First is a typology of health and safety management systems. This is constructed from two distinctions - between 'safe place' and 'safe person' approaches to health and safety; and between 'innovative' and traditional' management methods and structures. These distinctions yield four types of system. The typology was applied to the case studies which yielded a reasonable fit in most instances. The second part of the framework is a 'process evaluation' technique akin to Quality standards. Derived from the Victorian SafetyMAP audit criteria, the "e;process evaluation tool "e; is preferred to traditional outcome measures such as incident or claim rates. Using this measure, the twenty case study enterprises were classified as above average, average or below average in performance. These results correlated poorly with traditional incident trend and benchmark measures. The two elements of the framework are then combined to explore the relationship between the different types of system and their performance. Evidence from the twenty case studies showed a tendency for innovative/safe place firms to perform better than traditional/safe person firms. This finding can form the basis for a hypothesis that may be subject to statistical testing on a generalisable sample. In addition five 'best practice' cases were selected and subjected to a cross case analysis to search for common characteristics that might explain their performance. This analysis suggests the importance of a number of factors: senior managers who drive health and safety change and mobilise all possible resources in the pursuit of change; health and safety representatives who work with managers in a 'joint regulatory relationship' across system activities; the involvement of employees more generally, but not as a substitute for action by managers and health and safety representatives; a comprehensive approach to elimination of all hazards; and the introduction of innovative programs to continually improve systems and facilitate employee involvement in health and safety.

A critical analysis of the independence of the internal audit function : evidence from Australia

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.

Outsourcing of internal audit services in Australian firms : some preliminary evidence

Although internal auditing (IA) services have been traditionally performed in-house, organizations are increasingly outsourcing such services. Using a Transaction Cost Economics (TCE) perspective, this study examined the influence of several organizational-level variables on the decision to outsource or in-house their internal audit function. The study also identified the type of IA services that were likely to be out-sourced rather than in-housed, the extent to which incumbent external financial statement auditors participated in outsourced arrangements and the level of interaction between the internal audit provider and audit committees. The results have implications for auditor independence, corporate governance and organizational performance.

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.