审计风险外文文献

1、AbstractPrevious studies have utilized a variety of approaches to determine appropriate criteria to evaluate the effectiveness of the internal audit function. For example, considered the degree of compliance with standards as one of the factors which affects internal audit performance. A 1988 resear

2、ch report from the IIA-United Kingdom(IIA-UK ，1988)focused on the perceptions of both senior managementand external auditors of the value of the internal audit function. The study identified the difficulty of measuring the value of services provided as a major obstacle to such an evaluation. Profita

3、bility, cost standards and the effectiveness of resource utilization were identified as measures of the value of services.In its recommendations it highlighted the need to ensure that audit work complies with SPPIA.identified themost importantIn the US, Albrecht et al.(1988)studied the roles and ben

4、efits of the internal audit function and developed a framework for the purpose of evaluating internal audit effectiveness. They found that there were four areas that the directors of internal audit departments could develop to enhance effectiveness: an appropriate corporate environment, top manageme

5、nt support, high quality internal audit staff and high quality internal audit work. The authors stressed that management and auditors should recognize the internal audit function as a value-adding function to the organization. In the UK, Ridley and D Silva (1997) importance of complying with profess

6、ional standards as the contributor to the internal audit function adding value. Key wordsAudit,Risk, Internal Control, AuditingCompliance with SPPIAconcerned withA number of studies have focused on the SPPIA standardet al.(1981) found that the independence of the internal audit department and the le

7、vel ofauthority to which internal audit staff report were thetwo most important criteria influencing the objectivity of their work.Plumlee (1985) focused on potential threats to internal auditor objectivity, particularly whether participation in the design of an internal control system influenced ju

8、dgements as to the quality andeffectiveness of that system. Plumlee found that such design involvement produced bias that could ultimately threaten objectivity.auditorsauditortheirchannelto succumbThe relationship between the internal audit function and company management more generally is clearly a

9、n important factor in determining internal auditor objectivity. Harrell et al. (1989) suggested that perceptions of the views and desires of management could influence the activities and judgement of internal auditors. Also, they found that internal auditors who were membersof the IIA were less like

10、ly to such (1991) examined the question of whether or not internal will report sensitive issues uncovered during the course of their work. He concluded that the three factors affecting internal objectivity were their social position in the organization, relationship with managementand the existence

11、of a communication to report wrongdoing. The independence of internal audit departmentsCommentators and standard setters identify independence as being a key attribute of the internal audit department. From the questionnaire responses 60 (77%) of the internal audit departments stated that there was

12、a written document defining the purpose, authority and responsibility of the department. In nearly all instances where there was such a document the terms of reference of the internal audit department had been agreed by senior management (93%), the document identified the role of the internal audit

13、department in the organization, and its rights of access to individuals, records and assets (97%), and the document set out the scope of internal auditing (90%). Respondents were asked to assess the extent to which the relevant document was consistent with the specific requirements of SPPIA. In thos

14、e departments where such a document existed 27 (45%) claimed full compliance with SPPIA, 23 (38%) considered their document to be partially consistent with SPPIA. In more than one-third of the departments surveyed either no such document existed (n=18, 23%)or the respondent was not aware whether or

15、not the document complied with SPPIA ( n=10, 13%).SPPIAsuggests that independence is enhanced whenthe organization s board of directors concurs with the appointment or removal of the director of the internal audit department, and that the director of the internal audit department is responsible to a

16、n individual of suitable seniority within the organization. It is noticeable that in 47 companies (60%) their responsibilities with regard to appointment, removal and the receipt of reports lay with non-senior management, normally a general manager. SPPIA recommendsthat the director of the internal

17、audit department should have direct communication with the board of directors to ensure that the department is independent, and provides a means for the director of internal auditing and the board of directors to keep each other informed on issues of mutual interest. The interviews with directors of

18、 internal audit departments showed that departments tended to report to general managers rather than the board of directors. Further evidence of the lack of access to the board of directors was provided by the questionnaire responses showing that in almost half the companies, members of the internal

19、 audit department have never attended board meetings and in only two companies did attendance take place regularly.Unrestricted access to documentation and unfettered powers of enquiry are important aspects of the independence and effectiveness of internal audit. The questionnaire responses revealed

20、 that 34 (44%) internal audit directors considered that they did not have full access to all necessary information. Furthermore, a significant minority (n=11, 14%) did notbelieve they were free, in all instances, to report faults, frauds, wrongdoing or mistakes. A slightly higher number (n=17, 22%)

21、consideredthat the internal audit function did not always receive consistent support from senior management.SPPIA identifies that involvement in the design, installation and operating of systems is likely to impair internal auditor objectivity. Respondents were asked how often management requested t

22、he assistance of the internal audit department in the performance of non-audit duties. In 37 internal audit departments (47%) surveyed such requests were made sometimes, often or always, and only 27 (35%) departments never participated in these non-audit activities.The interviews revealed thatin som

23、e organizations internal audit staff was used regularly to cover for staff shortages in other departments.Woodworth and Said (1996)sought to ascertain the views of internal auditors in Saudi Arabia as to whether there were differences in the reaction of auditees to specific internal audit situations

24、 according tothe nationality of the auditee. Based on 34 questionnaire responses from membersof the IIA Dhahran chapter, they found there were no significant differences between the different nationalities. The internal auditors did not modify their audit conduct according to the nationality of the

25、auditee and cultural dimensions did not have a significant impact on the results of the audit.Given the importance of complying with SPPIA, the professional and academic literature emphasizes the importance of the relationship between the internal audit department and the rest of the organization in

26、 determining the success or otherwise of internal audit departments (Mints,1972;Flesher,1996;Ridley& Chambers,1998 and Moeller & Witt,1999).This literature focuses on the need for co-operation and teamwork between the auditor and auditee if internal auditing is to be (1992) suggests that the need fo

27、r good human relations skills is important becauseinternal auditing creates negative perceptions and negative attitudes. These issues are particularly important in a multicultural business environment such as Saudi Arabia where there are significant differences in the cultural and educational backgr

28、ound of the auditors and auditees Woodworth and Said (1996).Reasons for not having an internal audit departmentOf the 92 company interviews examining the reasons why companies do not have an internal audit function, the most frequent response from 52 companies (57%) was that reliance on the external

29、 auditor enabled the companyto obtain the benefits that might be obtained from internal audit. Typically, interviewees argued that the external auditor is better, more efficient and saves money. Interviews with the external auditors revealed that client companies could not distinguish clearly betwee

30、n the work and roles of internal and external audit. For example, one external auditor said,there is a misperception of what the external auditor does, they think the external auditor does everything for the company and must discover any problem.Having said this, one external auditor doubted that an

31、 internal audit function would add value in all circumstances. When referring to the internal control system he stated,as long as they are happy with the final output, I think the internal audit function will not add value. External auditing eventually will highlight any significant internal control

32、 weakness.25%) for not operating an internal audit department was the trade-off. Specifically, 17 firms considered that the small size of the company and the limited nature of its activities meant that be efficient for them to have an internal audit department. auditors interviewed were of the opini

33、on that the readily identifiable costs as compared with the more difficult to measure benefits contributing to this decision.it would notThe externalwas a factorThe second most frequent reason mentioned by interviewees (23 firms, cost/benefitThreeauditA number of other reasons were given by intervie

34、wees for not having an internal audit department. As a consequence of the high costs of conducting internal audit activities, 14 firms used employees who were not within a separate internal audit department to carry out internal audit duties. Eight companies did not think there was a need for intern

35、al audit because they believed their internal control systems were sufficient to obviate the need for internal audit. Five companies did not think that internal audit was an important activity and three felt that their type of the business did not require internal audit. respondents mentioned that t

36、hey did not operate an internal department because professional people could not be found to run the department, and six companies did not provide a reason for not having an internal audit department. In 10 companies an internal audit dInternal audit risks include the inherent risks and control risk

37、s.The inherent risks is the assumption that has nothing to do with internal accounting controls, the units being audited financial statements and theoverall balance of the account of a business or the possibilityof a majorerror, that is caused by the audit unit economic characteristics ofbusiness an

38、d accounting work itself the formation of the lack of auditrisk. Someenterprises such as the lack of due attention to theaccountingsystem, account system complex, reducing clarity ofaccountinginformation, reports, use of difficulty, cost, cost of lack of costaccounting concepts. Control risk refers

39、to as a result of inadequateinternal control system perfect, weak internal control behavior, nottimely detection and correction of a business account or a major errorin the formation of audit risk. Sometimes, even if the auditors auditedunits to confirm the internal control system is unreasonable or

40、 out ofcontrol in key areas, the amendments proposed by the audit can reallysuitable for operating activities, but will also create a riskamendment.First, the internal audit risk causes1. The independence of the internal audit agency enoughInternal audit body is set up units in institutions, in the

41、unit underthe leadership of the responsible persons to work as a unit of service.Therefore, the independence of internal audit as social audit,the auditprocess, inevitably affected the interests of the unit constraints. OIAstaff faced with the unit leadership was among the leadership and theleadersh

42、ip of the relationship, as well as with various sections, therelationship between colleagues, people are not involved in theleadership of my colleagues is, non-directly related to also indirectlyrelated to the audit process and conclusions will inevitably involve theinterests of specific individuals

43、, which inevitably affected the auditprocess for all categories of personnel interference.2. Internal audit operations personnel ill-equippedThe quality of auditors is to determine the size of audit risk factors.The quality of the audit including those engaged in the audit of thepolicies and regulat

44、ions need to level of expertise, experience,skills,audit professional ethics and work responsibilities.Audit experience, the audit staff should have an important skill,the needfor the audit practice of the accumulation of experience. Chinasinternalaudit staff, many people only familiar with the fina

45、ncial and accountingoperations, some auditors do not understand the business activities ofthis unit and internal controls, audit limited experience. In addition,the internal audit staff responsibilities and professional ethics is theimpact of audit risk factors. Because of Chinas internal guidelines

46、 forthe work of norms and ethical standards still somegaps, and manyinternalorgans and personnel lack of occupational norms bound and guidance. Inshort, Chinas overall quality of the low OIA staff and directly affectedthe internal audit work carried out by the depth and breadth. Faced withthe comple

47、xity of todays OIA object and content development, internalaudit staff and powerful single force book, which will directly lead tothe selection of audit risk.3. Internal audit of the scientific method is not strongChinas system of internal audit is the basis of the audit, with theinternal operation

48、and managementof environmental complicated models arenot suited to carry out this audit internal managementaudit of the needs,because it is overly dependent on the internal managementof enterprisescontrolled test, in itself a huge potential the risk of internal auditgenerally use statistical samplin

49、g methods, as a result of the sampleitself is based on a sample audit of the results of the review can beinferred from the general characteristics, therefore, between the samplesand the overall form isbound to a certain degree of error, the formationof audit sampling risk.With the degree of informat

50、ion technology improved,the audited accountinginformation will be more and more errors and falseaccounting informationdoped them, and failed to investigate thepossibility of also increasing. Although the survey sample is built onthe solid foundation of mathematical theory, but its existence is to al

51、lowa certain degree of audit risk. Similarly, a large number of analyticalreview will also have associated risks, so that the composition of thecontents of audit risk is more complicated.4. Internal Audit management systemsInternal audit management system construction and implementation ofinternal a

52、udit is the prerequisite and foundation. Sound and effectiveinternal management system to detect and control of enterprise economicactivity occurring in a variety of errors and fraud. To ensure the qualityof internal audit, internal audit organizations should establish aperfect quality control syste

53、m, however, some audit institutions stilllack of prior audit plan, a matter of auditing procedures and audit reviewof the reporting period; the audit working papers incomplete, generallyonly Records of auditmatters, not the recording of audit staff that thecorrect audit matters, making the audit rev

54、iew, audit quality control noway; to coordinate the relationship between the audit report as a startingpoint to certain performance-based, qualitative ambiguous issues. Morethan the existence of the status quo, making the internal audit qualityassurance become an empty talk, let alone ward off risks

55、.Second, reduce the risk of internal audit ways1. Strengthen the internal audit of the legal systemImprove and perfect the legal system for the audit of internal audit isthe basis of risk control measures. Audit norms, the audit staff code of conduct and guidelines, not only to control and reduce au

56、dit risk, but also to measure auditors liability standards. Chinas internal audit late start compared with Western countries in the relevant system-building there are many imperfections. In order to adapt to the continuous development of modern internal audit requirements, it is necessary to strengt

57、hen the audit work of legalization and standardization construction to minimize the audit work of blindness and randomness.2. To ensure the independence of internal auditThe independence of the internal auditor can make a fair and impartial professional judgment, which is appropriate to carry out th