An exploratory study into audit challenges in IT governance : a Delphi approach

Information technology (IT) has been playing a powerful role in creating a competitive advantage for organisations over the past decades. This role has become proportionally greater over time as expectations for IT investments to drive business opportunities keep on rising. However, this reliance on IT has also raised concerns about regulatory compliance, governance and security. IT governance (ITG) audit leverages the skills of IS/IT auditors to ensure that IT initiatives are in line with the business strategies. ITG audit emerged as part of performance audit to provide an assessment of the effective implementation of ITG. This research attempts to empirically examine the ITG audit challenges in the Australian public sector. Based on literature research and Delphi research, this paper provides insights regarding the impact of, and required effort to address these challenges. The authors also present the ten major ITG audit challenges facing Australian public sector organisations today.

Desktop Audit and Analysis of Model Server Capability

This report presents the current state and approach in Building Information Modelling (BIM). The report is focussed at providing a desktop audit of the current state and capabilities of the products and applications supporting BIM. This includes discussion on BIM model servers as well as discipline specific applications, for which the distinction is explained below. The report presented here is aimed at giving a broad overview of the tools and applications with respect to their BIM capabilities and in no way claims to be an exhaustive report for individual tools. Chapter 4 of the report includes the research and development agendas pertaining to the BIM approach based on the observations and analysis from the desktop audit.

Internal audit quality, audit committee independence, growth opportunities and firm performance

This study explores whether the relation between internal audit quality and firm performance is associated with firm characteristics of information asymmetry and uncertainty (growth opportunities) and certain governance controls (audit committee effectiveness). The results from this preliminary study of 60 Malaysian companies show that the association between internal audit quality and firm performance is stronger for firms with high growth opportunities and that this positive association is weakened by increasing audit committee independence. These findings demonstrate the internal auditors conflicting roles and question the governance recommendations that require all members of the audit committee to be non-executive directors.

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.

A Knight without a Sword? The Effects of Audit Courts on Tax Morale

The intention of this paper is to analyse how audit courts affect tax morale, controlling in a multivariate analysis for a broad variety of potential factors. Switzerland, with its variety of audit-court competence among the cantons, has been analysed. With data from the ISSP [1998] (Swiss data 1999), evidence has been found that higher audit-court competence has a significantly positive effect on tax morale. Thus, the results in Switzerland suggest that in the cantons where audit courts are not just knights without swords; they help improve taxpayers' tax morale and thus citizens' intrinsic motivation to pay taxes.

Audit of the Care of the Dying in a Network of Hospitals and Institutions in Queensland

Background: Most Australians die in institutions and there is evidence to suggest that the care of these patients is not always optimal. Care pathways for the dying have been designed to transfer benchmarked hospice care to other settings (e.g. acute hospitals and residential age-care facilities) by defining goals of best care, providing guidelines to provide that care and documenting outcome. Method: A retrospective audit was undertaken across a network of health-care institutions in Queensland. The 18 goals considered essential for the care of the dying within the Liverpool Care Pathway were taken as a benchmark. Documentation of achievement of each of these goals was sought. Results: The notes of 160 patients who had died in eight institutions (four hospitals, three hospices, one nursing home) were reviewed. Several areas for improvement were identified, particularly in those goals relating to communication, resuscitation orders and care after death. Few units documented the provision of written information to families. Most patients were prescribed medications in anticipation of pain and agitation but less were prescribed drugs for other common symptoms in the dying. Most of the goals were achieved in a higher percentage of cases in hospice units. Marked differences in practice were noted between different institutions. Conclusion: The audit identified several aspects in the care of the terminally ill that could be improved. End-stage pathways may provide a model for improving the care of patients dying in hospitals and institutions in Australia.

Legislative and security requirements of audit material for evidentiary purpose

This research used the Queensland Police Service, Australia, as a major case study. Information on principles, techniques and processes used, and the reason for the recording, storing and release of audit information for evidentiary purposes is reported. It is shown that Law Enforcement Agencies have a two-fold interest in, and legal obligation pertaining to, audit trails. The first interest relates to the situation where audit trails are actually used by criminals in the commission of crime and the second to where audit trails are generated by the information systems used by the police themselves in support of the recording and investigation of crime. Eleven court cases involving Queensland Police Service audit trails used in evidence in Queensland courts were selected for further analysis. It is shown that, of the cases studied, none of the evidence presented was rejected or seriously challenged from a technical perspective. These results were further analysed and related to normal requirements for trusted maintenance of audit trail information in sensitive environments with discussion on the ability and/or willingness of courts to fully challenge, assess or value audit evidence presented. Managerial and technical frameworks for firstly what is considered as an environment where a computer system may be considered to be operating “properly” and, secondly, what aspects of education, training, qualifications, expertise and the like may be considered as appropriate for persons responsible within that environment, are both proposed. Analysis was undertaken to determine if audit and control of information in a high security environment, such as law enforcement, could be judged as having improved, or not, in the transition from manual to electronic processes. Information collection, control of processing and audit in manual processes used by the Queensland Police Service, Australia, in the period 1940 to 1980 was assessed against current electronic systems essentially introduced to policing in the decades of the 1980s and 1990s. Results show that electronic systems do provide for faster communications with centrally controlled and updated information readily available for use by large numbers of users who are connected across significant geographical locations. However, it is clearly evident that the price paid for this is a lack of ability and/or reluctance to provide improved audit and control processes. To compare the information systems audit and control arrangements of the Queensland Police Service with other government departments or agencies, an Australia wide survey was conducted. Results of the survey were contrasted with the particular results of a survey, conducted by the Australian Commonwealth Privacy Commission four years previous, to this survey which showed that security in relation to the recording of activity against access to information held on Australian government computer systems has been poor and a cause for concern. However, within this four year period there is evidence to suggest that government organisations are increasingly more inclined to generate audit trails. An attack on the overall security of audit trails in computer operating systems was initiated to further investigate findings reported in relation to the government systems survey. The survey showed that information systems audit trails in Microsoft Corporation's “Windows” operating system environments are relied on quite heavily. An audit of the security for audit trails generated, stored and managed in the Microsoft “Windows 2000” operating system environment was undertaken and compared and contrasted with similar such audit trail schemes in the “UNIX” and “Linux” operating systems. Strength of passwords and exploitation of any security problems in access control were targeted using software tools that are freely available in the public domain. Results showed that such security for the “Windows 2000” system is seriously flawed and the integrity of audit trails stored within these environments cannot be relied upon. An attempt to produce a framework and set of guidelines for use by expert witnesses in the information technology (IT) profession is proposed. This is achieved by examining the current rules and guidelines related to the provision of expert evidence in a court environment, by analysing the rationale for the separation of distinct disciplines and corresponding bodies of knowledge used by the Medical Profession and Forensic Science and then by analysing the bodies of knowledge within the discipline of IT itself. It is demonstrated that the accepted processes and procedures relevant to expert witnessing in a court environment are transferable to the IT sector. However, unlike some discipline areas, this analysis has clearly identified two distinct aspects of the matter which appear particularly relevant to IT. These two areas are; expertise gained through the application of IT to information needs in a particular public or private enterprise; and expertise gained through accepted and verifiable education, training and experience in fundamental IT products and system.

The role of the audit committee and institutional investors in constraining earnings management : evidence from Chinese firms listed in Hong Kong

Using data from 2004 to 2008, we find that an audit committee is an important monitoring mechanism as audit committee independence, expertise and size are associated with reduced levels of abnormal accruals, our measure of earnings management. This study also attempts to discern when the monitoring role of the audit committee is more salient for the firm. We find that ownership concentration and the presence of government officials on the audit committee are important determinants of the negative association between audit committee characteristics and earnings management. In contrast, we find no significant associations between the audit committee and abnormal accruals for Chinese firms listed only on the Chinese domestic Stock Exchanges. The paper contributes to the corporate governance literature in a transitional economy. Identifying the role of audit committees of firms listed on markets other than the domicile market demonstrates the importance of considering the institutional setting in governance research.

Can an effective audit committee help to mitigate earnings management in Chinese firms listed in Hong Kong?

This paper attempts to determine whether the adoption of recommended corporate governance practices by Chinese firms is associated with less earnings management proxied by abnormal accruals. We examine the role of the audit committee and ownership concentration in preventing earnings management using Chinese firms listed in Hong Kong. The results of this preliminary analysis show that the frequency of audit committee meetings is associated with reduced levels of abnormal accruals, our measure of earnings management. We conclude that audit committee activity is an important factor in constraining the propensity of managers to engage in earnings management. In contrast, we find that the size of the audit committee is associated with increased levels of abnormal accruals and suggest that increasing the size of the audit committee creates information asymmetry between the audit committee and management that reduces the monitoring capacity of the audit committee. We do not find any association between audit committee independence, financial and industry experience, or ownership concentration and abnormal accruals.

Diarrhoea risk factors in enterally tube fed critically ill patients : a retrospective audit

Objective: Diarrhoea in the enterally tube fed (ETF) intensive care unit (ICU) patient is a multifactorial problem. Diarrhoeal aetiologies in this patient cohort remain debatable; however, the consequences of diarrhoea have been well established and include electrolyte imbalance, dehydration, bacterial translocation, peri anal wound contamination and sleep deprivation. This study examined the incidence of diarrhoea and explored factors contributing to the development of diarrhoea in the ETF, critically ill, adult patient. ---------- Method: After institutional ethical review and approval, a single centre medical chart audit was undertaken to examine the incidence of diarrhoea in ETF, critically ill patients. Retrospective, non-probability sequential sampling was used of all emergency admission adult ICU patients who met the inclusion/exclusion criteria. ---------- Results: Fifty patients were audited. Faecal frequency, consistency and quantity were considered important criteria in defining ETF diarrhoea. The incidence of diarrhoea was 78%. Total patient diarrhoea days (r = 0.422; p = 0.02) and total diarrhoea frequency (r = 0.313; p = 0.027) increased when the patient was ETF for longer periods of time. Increased severity of illness, peripheral oxygen saturation (Sp02), glucose control, albumin and white cell count were found to be statistically significant factors for the development of diarrhoea. ---------- Conclusion: Diarrhoea in ETF critically ill patients is multi-factorial. The early identification of diarrhoea risk factors and the development of a diarrhoea risk management algorithm is recommended.

Alexithymia in alcohol dependent patients is partially mediated by alcohol expectancy

Background: Up to fifty percent of alcohol dependent individuals have alexithymia, a personality trait characterised by difficulties identifying and describing feelings, a lack of imagination and an externalised cognitive style. Although studies have examined alexithymia in relation to alcohol dependence, no research exists on mechanisms underlying this relationship. The present study examined the mediational effect of alcohol expectancies on alexithymia and alcohol dependence.----- ----- Methods: 230 outpatients completed the Toronto Alexithymia Scale (TAS-20), the Drinking Expectancy Questionnaire (DEQ) and the Alcohol Use Disorder Identification Test (AUDIT). Results: Regression analysis showed that alexithymia and alcohol dependence was, in two of three cases, partially mediated through alcohol expectancy.----- ----- Conclusions: Alcohol expectancies of assertion and affective change show promise as mediators of alcohol dependence in individuals with alexithymia.

The obsessive compulsive drinking scale is a valid measure of alcohol craving in young adults

Background: Alcohol craving is associated with greater alcohol-related problems and less favorable treatment prognosis. The Obsessive Compulsive Drinking Scale (OCDS) is the most widely used alcohol craving instrument. The OCDS has been validated in adults with alcohol use disorders (AUDs), which typically emerge in early adulthood. This study examines the validity of the OCDS in a nonclinical sample of young adults. Methods: Three hundred and nine college students (mean age of 21.8 years, SD = 4.6 years) completed the OCDS, Alcohol Use Disorders Identification Test (AUDIT), and measures of alcohol consumption. Subjects were randomly allocated to 2 samples. Construct validity was examined via exploratory factor analysis (n = 155) and confirmatory factor analysis (n = 154). Concurrent validity was assessed using the AUDIT and measures of alcohol consumption. A second, alcohol-dependent sample (mean age 42 years, SD 12 years) from a previously published study (n = 370) was used to assess discriminant validity. Results: A unique young adult OCDS factor structure was validated, consisting of Interference/Control, Frequency of Obsessions, Alcohol Consumption and Resisting Obsessions/Compulsions. The young adult 4-factor structure was significantly associated with the AUDIT and alcohol consumption. The 4 factor OCDS successfully classified nonclinical subjects in 96.9% of cases and the older alcohol-dependent patients in 83.7% of cases. Although the OCDS was able to classify college nonproblem drinkers (AUDIT <13, n = 224) with 83.2% accuracy, it was no better than chance (49.4%) in classifying potential college problem drinkers (AUDIT score ≥13, n = 85). Conclusions: Using the 4-factor structure, the OCDS is a valid measure of alcohol craving in young adult populations. In this nonclinical set of students, the OCDS classified nonproblem drinkers well but not problem drinkers. Studies need to further examine the utility of the OCDS in young people with alcohol misuse.