Voluntary demand for auditing by farm businesses: an Australian perspective

 This study investigates voluntary demand for auditing by Australian farm businesses, a significant but relatively unexplored segment of the economy. Most farms operate as family partnerships or sole proprietors and we thus focus on incentives to audit arising from internal sources (owner-manager), controlling for traditional incentives arising from external contractual constraints (i.e., debt), organisational characteristics (i.e., size), and agency conflict. We hypothesise that an external audit assists management in enhancing internal control by complementing the process of profit planning and control (budgeting) and that increased family conflict provides an incentive to engage external audit. Of the 457 survey questionnaire respondents, 27% voluntarily engage an external auditor and 66% conduct some formal written planning. Results from logistic regression analyses support the predicted impact of both size and debt on audit, and further support the hypothesised impact of budgeting. The positive association between budgeting and audit confirms the complementary relationship. More importantly, this relationship is not confounded by the combined impact of size and budgeting and debt and budgeting on voluntary audit. In addition, family conflict has no impact on voluntary demand for auditing by farm business.

Revision i små aktiebolag : En kvalitativ studie om varför små aktiebolag väljer att revidera sina räkenskaper trots att de inte omfattas av revisionsplikten

Bakgrund Revisionsplikten avskaffades 1 november 2010 i Sverige. Detta innebar att cirka 250,000 små aktiebolag inte längre var tvingade till revision. Idag har det gått drygt fem år sedan beslutet togs om att avskaffa revisionsplikten och trots detta väljer en del små aktiebolag att revidera sina räkenskaper. Syfte Syftet med studien var att få en djupare förståelse för varför små aktiebolag, som inte omfattas av revisionsplikten, väljer att revidera sina räkenskaper. Metod Vi har använt oss av en kvalitativ metod och genomfört semistrukturerade intervjuer med företagsrepresentanter för små aktiebolag. Det empiriska materialet har analyserats genom en innehållsanalys. Slutsats Vår studie visar att små aktiebolag efterfrågar frivillig revision främst av fyra anledningar. Dessa är:  Spritt delägarskap  Försäkran om att den interna bokföringen är korrekt  Rutinmässigt av företagsledning med erfarenhet från revisionspliktade företag  Önskan om att uppfattas som legitima

Avskaffandet av revisionsplikten : Ränteeffekter på företag inom fastighetsbranschen efter avskaffandet av revisionsplikten

Bakgrund: År 2010 avskaffades revisionsplikten för mindre aktiebolag i Sverige. Anledningen till avskaffandet var att minska kostnaderna för mindre företag. Tidigare forskning har kommit fram till att företag som valt bort revisor får en högre kreditkostnad när de till exempel tar lån. Den tidigare forskningen menar att detta kan bero på att banker och andra kreditinstitut anser att oreviderade finansiella rapporter har en sämre kvalitet än reviderade rapporter vilket leder till en högre risk för kreditgivarna. Denna uppsats kommer att undersöka om det finns någon skillnad på låneräntan mellan företag som valt att ha kvar revisor och företag som valt bort revisor. Syfte: Syftet med denna uppsats är att undersöka, jämföra samt analysera låneräntan hos mindre aktiebolag inom fastighetsbranschen som inte är revisionspliktiga. Metod: Kvantitativ metod, multipel regressionsanalys. Resultat: Resultaten i denna studie visar på att företag med revisor har en lägre ränta i genomsnitt jämfört med företag utan revisor. Vi har även fått fram att revision har en negativ påverkan på företags ränta, men detta resultat är inte signifikant. Därför kan vi inte uttala oss om att revision har en negativ påverkan på företags ränta, trots att tidigare forskning har visat det. Slutsats: Företags val av revisor eller ej är inte det viktigaste för kreditgivare när det kommer till vilken ränta företagen skall få på sina lån. Det finns andra faktorer som har en större påverkan på räntan. I denna studie är det företags storlek samt andelen materiella tillgångar i förhållande till totala tillgångar som har den största negativa påverkan på företags ränta. Detta indikerar att banker och andra kreditinstitut ser dessa företag som en lägre risk.

Supermarkets and private standards : unintended consequences of the audit ritual

Recent scholarship has considered the implications of the rise of voluntary private standards in food and the role of private actors in a rapidly evolving, de-facto ‘mandatory’ sphere of governance. Standards are an important element of this globalising private sphere, but are an element that has been relatively peripheral in analyses of power in agri-food systems. Sociological thought has countered orthodox views of standards as simple tools of measurement, instead understanding their function as a governance mechanism that transforms many things, and people, during processes of standardisation. In a case study of the Australian retail supermarket duopoly and the proprietary standards required for market access this paper foregrounds retailers as standard owners and their role in third-party auditing and certification. Interview data from primary research into Australia’s food standards captures the multifaceted role supermarkets play as standard-owners, who are found to impinge on the independence of third-party certification while enforcing rigorous audit practices. We show how standard owners, in attempting to standardize the audit process, generate tensions within certification practices in a unique example of ritualism around audit. In examining standards to understand power in contemporary food governance, it is shown that retailers are drawn beyond standard-setting into certification and enforcement, that is characterized by a web of institutions and actors whose power to influence outcomes is uneven.

Social Audit Regulation Within the NGO Sector: Practices of NGOs Operating in Bangladesh and Indonesia

Social audit is one of those important mechanisms for strengthening NGOs’ accountability to poor communities (as NGOs’ key beneficiaries). However, conducting social audits within the NGO sector often rests on the individual interests and priorities of donors or NGOs themselves, effectively resulting in self-selection bias, and limiting the effectiveness and usefulness of social audits as a control and evaluation mechanism. The purpose of this chapter is to identify the prevalence, scale, and scope of social audits within the NGO sector, particularly NGOs engaging in microenterprise development programs. Accordingly, this study examined 20 NGOs operating in two countries - Bangladesh and Indonesia. Data were collected from publicly available sources and in-depth interviews with senior executives of the participating NGOs. Further, 10 interviews were conducted with a small sample of beneficiaries (individuals or groups from four of the participating NGOs) in order to gain an understanding of beneficiaries’ perceptions of the NGOs’ social audit mechanism. The findings reveal a range of approaches to social audit among NGOs, as well as the usefulness and limitations of this mechanism for strengthening NGO accountability, particularly to beneficiaries. Findings highlight that within the NGOs investigated the conduct of social audits remained voluntary and was strongly dependant on donors’ requirements. As social audit regulation within the NGO sector is minimal, the findings provide regulators with valuable guidance for better understanding the value of social audit as a mechanism to strengthen accountability of the NGO sector, particularly accountability to beneficiaries.

Auditing technology uses within a global voluntary organisation

WAGGGS, the World Association of Girl Guides and Girl Scouts, is the umbrella organization for Member Organizations from 145 countries around the world. As such one of its remits is to provide programmes that promote leadership development and opportunities for girls and young women to advocate on issues they care about. One of the ways WAGGGS is exploring to do this more widely and efficiently is through the use of digital technologies. This paper presents the results of an audit undertaken of the technologies already used by potential participants in online communities and courses and investigates the challenges faced in using technology to facilitate learning, within this context.

Determinants and economic consequences of voluntary disclosure of internal control weaknesses in China

This paper investigates the determinants and economic consequences of disclosure of internal control weaknesses (ICWs) by Chinese listed firms under the voluntary disclosure regime over 2010-2011. We find that the probability of firms disclosing ICWs is not only associated with firm characteristics such as profitability, age and business complexity, but is also strongly related to the unique attributes of corporate governance and ownership structure in Chinese listed firms, e.g. the independence of the supervisory board, political connections, concentration of the top 3 shareholders' ownership and tradability of shares.Our results show that the severity of the ICWs disclosed is negatively and significantly associated with earnings response coefficients (ERCs), and audit assurance of ICRs has a significant moderating effect on the relationship between ICWs and ERCs. Our research adds further evidence to support the implementation of SOX-type regulations globally.

The impact of mandatory versus voluntary auditor switches on stock liquidity: some Korean evidence

Using Korean listed firms subject to the auditor "designation rule", this paper shows that (1) firms that switch auditors exhibit lower stock liquidity than firms that do not switch auditors, and (2) the negative liquidity effect of auditor switches is concentrated in firms that switch to low-quality auditors. Meanwhile, firms that switch auditors under the auditor designation system do not exhibit lower stock liquidity, consistent with audit designation mitigating the concerns about audit quality deterioration around auditor changes. Furthermore, we find that foreign ownership has a mitigating impact on the negative relation between auditor switches and stock liquidity, suggesting that investors are less concerned about auditor switches when an alternative monitoring mechanism exists.

The use of internal audit by Australian companies

Purpose – The purpose of this study is to explore the voluntary use of internal audit by Australian publicly listed companies and to identify factors that lead listed companies to have an internal audit function. Design/methodology/approach – Drawing on the Institute of Internal Auditors' definition of internal auditing, the paper predicts that internal audit use is associated with factors related to risk management, strong internal controls and strong corporate governance. To test the predictions, the study combines data from a survey of listed companies with information from corporate annual reports. The paper also provides descriptive information on the use of internal audit. Findings – The results indicate that only one-third of the sample companies use internal audit. While size appears to be the dominant driver, there is also a strong association between internal audit and the level of commitment to risk management. However, the study finds only weak support for an association between the use of internal audit and strong corporate governance. Research limitations/implications – A limitation of our study is that some of the variables in the model may not be good proxies for the factors being measured. Refinement of the model and the variables used provides an opportunity for future research. Practical implications – The limited use of internal audit by Australian companies has important implications for sound corporate governance. Originality/value – This is the first study that identifies factors associated with the use of internal audit by Australian listed companies.

Safer construction voluntary code of practice : implications for SMEs

The majority of Australian construction firms are small businesses, with 97% of general construction businesses employing less than 20 employees and 85% employing less than five employees (Lin and Mills, 2001; Lingard and Holmes, 2001). The Australian Bureau of Statistics’ definition of a small to medium enterprise was used for the purpose of this study (McLennan, 2000). This included small business employing less than twenty people and medium business employing less than 200 people. Although small to medium enterprises (SME) make up the major share of construction organisations in Australia, there is a paucity of published research in relation to occupational health and safety (OHS) issues for this group. Typically, SME organisations “are frequently undercapitalized and depend on continuous cash flow for their continued business” (Cole, 2003; 12). Research by Lin and Mills (2001) indicates that these factors influence the smaller operators’ ability and motivation to achieve high levels of OHS compared to larger firms which tend to integrate OHS into their management systems. According to Lin and Mills (2001; 137) small firms “do not feel the need to focus on OHS in their management systems, instead they often believe that the control of risk is the responsibility of employees”. This report documents findings from a qualitative research study that examined SME organisations’ views of a newly developed voluntary code of practice (VCOP), and ways in which they might implement the code in their businesses. The research also explored respondents’ awareness of current safety issues in industry in the context of their personal experiences.

Safer construction : the development of a voluntary code of practice to improve safety performance in the Australian construction industry

In Australia, between 1994 and 2000, 50 construction workers were killed each year as a result of their work, the industry fatality rate, at 10.4 per 100,000 persons, is similar to the national road toll fatality rate and the rate of serious injury is 50% higher than the all industries average. This poor performance represents a significant threat to the industry’s social sustainability. Despite the best efforts of regulators and policy makers at both State and Federal levels, the incidence of death, injury and illness in the Australian construction industry has remained intransigently high, prompting an industry-led initiative to improve the occupational health and safety (OHS) performance of the Australian construction industry. The ‘Safer Construction’ project involves the development of an evidence-based Voluntary Code of Practice for OHS in the industry.