External auditors' reliance on internal audit : the impact of sourcing arrangements and consulting activities

This study examines the impact of internal audit outsourcing and internal audit’s involvement in consulting on external auditors’ reliance on the work of internal audit. We test whether these factors influence (i) reliance on internal audit work already undertaken and (ii) the use of internal auditors as assistants. In each case, we distinguish between control evaluation and substantive testing. We find that involvement in consulting impacts reliance on work undertaken and the use of internal auditors as assistants for control evaluation. External auditors make greater use of internal auditors as assistants for substantive testing when internal audit is provided in-house. Overall, external auditors use internal audit more for control evaluation tasks than for substantive testing.

Internal market orientation construct and consequences

Research in services has long recognized the need for managers to focus internally on employees as well as externally on customers. This internal focus is the domain of internal marketing. Despite over 2 decades of discussion of internal marketing, most operationalizations of marketing are grounded in ideas of product markets and remain resolutely focused on the external market, ignoring the internal focus necessary in services markets. Such operationalizations of marketing are outdated in modern markets where most purchases involve a combination of product and service elements, and, in the long term, service quality may be more important than product quality to the consumer. This paper reconceptualizes marketing and develops a new construct, ‘internal market orientation’ (IMO), which closely parallels and complements existing models of external market orientation. The relationship between internal and external market orientations is explored, and the performance implications of IMO are discussed. A second model of these proposed relationships is presented with implications for managers and recommendations for future research.

Internal audit department characteristics/activities and audit fees : some evidence from Hong Kong firms

This study provides preliminary support for the notion that internal audit function assists in reducing external audit effort and fees. Data on internal audit characteristics and activities are obtained from survey respondents of Hong Kong companies and audit fee model data are acquired from their annual reports. The results of this study suggest that the external auditor of firms in Hong Kong rely on the internal audit function and subsequently charge a lower fee. Lower external audit fees are associated with a larger internal audit department and certain activities carried out by the internal audit. Specifically, lower external audit fees are associated with more internal audit effort spent on activities relating to financial statements, systems development and maintenance, operating efficiency and effectiveness, fraud investigations and unlimited access to internal auditors’ working papers. The results of this study suggest that the contribution of the internal audit may substitute for some substantive external auditing processes and lower monitoring costs.

L'Impatto delle Condizioni Interne ed Esterne sul Ruolo del Cda : un'Analisi Empirica sulle Grandi Imprese Italiane [The impact of internal and external contingencies on board tasks performance : an empirical investigation of Italian companies]

Il Consiglio di Amministrazione (CdA) è il principale organo di governo delle aziende. La letteratura gli attribuisce tre ruoli: controllo, indirizzo strategico e collegamento con l’ambiente (networking). Precedenti studi empirici hanno analizzato se un Consiglio di Amministrazione è attivo o meno in tutti e tre i ruoli in un dato momento. Nel presente lavoro, invece, si propone un approccio «contingente» e si analizzano i ruoli svolti dal CdA al variare delle condizioni interne (aziende in crisi o di successo) ed esterne (aziende in settori competitivi o regolamentati).. L’indagine empirica è stata condotta su un campione di 301 imprese italiane di grandi dimensioni. I risultati supportano la tesi iniziale secondo cui le condizioni interne ed esterne incidono sul ruolo svolto dal CdA. In particolare i risultati evidenziano che il CdA non svolge sempre tutti e tre i ruoli nello stesso momento, ma esso si concentra sul ruolo o sui ruoli che assumono grande importanza nella situazione in cui si trova l’azienda. Con riferimento alle condizioni interne, nelle imprese in crisi il CdA è attivo in tutti e tre i ruoli, mentre in quelle di successo prevale un orientamento verso la funzione strategica. Nelle aziende che operano in settori competitivi il ruolo di controllo è più pressante mentre nei settori regolamentati prevale una funzione di networking.

Internal market orientation and market-oriented behaviours

Purpose: The purpose of this empirical paper is to investigate internal marketing from a behavioural perspective. The impact of internal marketing behaviours, operationalised as an internal market orientation (IMO), on employees’ marketing and other in-role behaviours (IRB) were examined. ---------- Design/methodology/approach: Survey data measuring IMO, market orientation and a range of constructs relevant to the nomological network in which they are embedded were collected from the UK retail managers. These were tested to establish their psychometric properties and the conceptual model was analysed using structural equations modelling, employing a partial least squares methodology. ---------- Findings: IMO has positive consequences for employees’ market-oriented and other IRB. These, in turn, influence marketing success. Research limitations/implications – The paper provides empirical support for the long-held assumption that internal and external marketing are related and that organisations should balance their external focus with some attention to employees. Future research could measure the attitudes and behaviours of managers, employees and customers directly and explore the relationships between them. ---------- Practical implications: Firm must ensure that they do not put the needs of their employees second to those of managers and shareholders; managers must develop their listening skills and organisations must become more responsive to the needs of their employees. ---------- Originality/value: The paper contributes to the scarce body of empirical support for the role of internal marketing in services organisations. For researchers, this paper legitimises the study of internal marketing as a route to external market success; for managers, the study provides quantifiable evidence that focusing on employees’ wants and needs impacts their behaviours towards the market.

Performance analysis of hybrid liquid desiccant solar cooling system

This thesis investigates the coefficient of performance (COP) of a hybrid liquid desiccant solar cooling system. This hybrid cooling system includes three sections: 1) conventional air-conditioning section; 2) liquid desiccant dehumidification section and 3) air mixture section. The air handling unit (AHU) with mixture variable air volume design is included in the hybrid cooling system to control humidity. In the combined system, the air is first dehumidified in the dehumidifier and then mixed with ambient air by AHU before entering the evaporator. Experiments using lithium chloride as the liquid desiccant have been carried out for the performance evaluation of the dehumidifier and regenerator. Based on the air mixture (AHU) design, the electrical coefficient of performance (ECOP), thermal coefficient of performance (TCOP) and whole system coefficient of performance (COPsys) models used in the hybrid liquid desiccant solar cooing system were developed to evaluate this system performance. These mathematical models can be used to describe the coefficient of performance trend under different ambient conditions, while also providing a convenient comparison with conventional air conditioning systems. These models provide good explanations about the relationship between the performance predictions of models and ambient air parameters. The simulation results have revealed the coefficient of performance in hybrid liquid desiccant solar cooling systems substantially depends on ambient air and dehumidifier parameters. Also, the liquid desiccant experiments prove that the latent component of the total cooling load requirements can be easily fulfilled by using the liquid desiccant dehumidifier. While cooling requirements can be met, the liquid desiccant system is however still subject to the hysteresis problems.

Property Agents and Motor Dealers Act (Qld) : disclosure, cooling-off and marketeers

The Property Agents and Motor Dealers Act 2000 commenced on 1 July 2001. Significant changes have now been made to the Act by the Property Agents and Motor Dealers Amendment Act 2001 (“the amending Act”). The amending Act contains two distinct parts. First, ss 11-19 of the amending Act provide for increased disclosure obligations on real estate agents, property developers and lawyers together with an extension of the 5 business day cooling-off period imposed by the original Act to all residential property (other than contracts formed on a sale by auction). These provisions are expected to commence on 29 October 2001. The remaining provisions of the amending Act provide for increased jurisdiction and powers to the Property Agents and Motor Dealers Tribunal (“the Tribunal”) enabling the Tribunal to deal with claims against marketeers. These provisions commenced on the date of assent (21 September 2001).

Application of an optimisation algorithm to configure an internal fixation device

Fractures of long bones are sometimes treated using various types of fracture fixation devices including internal plate fixators. These are specialised plates which are used to bridge the fracture gap(s) whilst anatomically aligning the bone fragments. The plate is secured in position by screws. The aim of such a device is to support and promote the natural healing of the bone. When using an internal fixation device, it is necessary for the clinician to decide upon many parameters, for example, the type of plate and where to position it; how many and where to position the screws. While there have been a number of experimental and computational studies conducted regarding the configuration of screws in the literature, there is still inadequate information available concerning the influence of screw configuration on fracture healing. Because screw configuration influences the amount of flexibility at the area of fracture, it has a direct influence on the fracture healing process. Therefore, it is important that the chosen screw configuration does not inhibit the healing process. In addition to the impact on the fracture healing process, screw configuration plays an important role in the distribution of stresses in the plate due to the applied loads. A plate that experiences high stresses is prone to early failure. Hence, the screw configuration used should not encourage the occurrence of high stresses. This project develops a computational program in Fortran programming language to perform mathematical optimisation to determine the screw configuration of an internal fixation device within constraints of interfragmentary movement by minimising the corresponding stress in the plate. Thus, the optimal solution suggests the positioning and number of screws which satisfies the predefined constraints of interfragmentary movements. For a set of screw configurations the interfragmentary displacement and the stress occurring in the plate were calculated by the Finite Element Method. The screw configurations were iteratively changed and each time the corresponding interfragmentary displacements were compared with predefined constraints. Additionally, the corresponding stress was compared with the previously calculated stress value to determine if there was a reduction. These processes were continued until an optimal solution was achieved. The optimisation program has been shown to successfully predict the optimal screw configuration in two cases. The first case was a simplified bone construct whereby the screw configuration solution was comparable with those recommended in biomechanical literature. The second case was a femoral construct, of which the resultant screw configuration was shown to be similar to those used in clinical cases. The optimisation method and programming developed in this study has shown that it has potential to be used for further investigations with the improvement of optimisation criteria and the efficiency of the program.

Scaling of natural convection of an inclined flat plate : ramp cooling condition

A scaling analysis is performed for the transient boundary layer established adjacent to an inclined flat plate following a ramp cooling boundary condition. The imposed wall temperature decreases linearly up to a specific value over a specific time. It is revealed that if the ramp time is sufficiently large then the boundary layer reaches quasi-steady mode before the growth of the temperature is finished. However, if the ramp time is shorter then the steady state of the boundary layer may be reached after the growth of the temperature is completed. In this case, the ultimate steady state is the same as if the start up had been instantaneous. Note that the cold boundary layer adjacent to the plate is potentially unstable to Rayleigh-Bénard instability if the Rayleigh number exceeds a certain critical value for this cooling case. The onset of instability may set in at different stages of the boundary layer development. A proper identification of the time when the instability may set in is discussed. A numerical verification of the time for the onset of instability is presented in this study. Different flow regimes based on the stability of the boundary layer have also been discussed with numerical results.

Scaling of natural convection of an inclined flat plate : sudden cooling condition

The natural convection boundary layer adjacent to an inclined plate subject to sudden cooling boundary condition has been studied. It is found that the cold boundary layer adjacent to the plate is potentially unstable to Rayleigh-Bénard instability if the Rayleigh number exceeds a certain critical value. A scaling relation for the onset of instability of the boundary layer is achieved. The scaling relations have been developed by equating important terms of the governing equations based on the development of the boundary layer with time. The flow adjacent to the plate can be classified broadly into a conductive, a stable convective or an unstable convective regime determined by the Rayleigh number. Proper scales have been established to quantify the flow properties in each of these flow regimes. An appropriate identification of the time when the instability may set in is discussed. A numerical verification of the time for the onset of instability is also presented in this study. Different flow regimes based on the stability of the boundary layer have been discussed with numerical results.

Natural convection in attics subject to instantaneous and ramp cooling boundary conditions

A fundamental study of the fluid dynamics inside an attic shaped triangular enclosure with cold upper walls and adiabatic horizontal bottom wall is reported in this study. The transient behaviour of the attic fluid which is relevant to our daily life is examined based on a scaling analysis. The transient phenomenon begins with the instantaneous cooling and the cooling with linear decreases of temperature up to some specific time (ramp time) and then maintain constant of the upper sloped walls. It is shown that both inclined walls develop a thermal boundary layer whose thicknesses increase towards steady-state or quasi-steady values. A proper identification of the timescales, the velocity and the thickness relevant to the flow that develops inside the cavity makes it possible to predict theoretically the basic flow features that will survive once the thermal flow in the enclosure reaches a steady state. A time scale for the cooling-down of the whole cavity together with the heat transfer scales through the inclined walls has also been obtained through scaling analysis. All scales are verified by the numerical simulations.