A Model for Investigating Internal Control Weaknesses

Scandals in corporate finance in the early 2000s and subsequent policy changes led corporate executives to adopt a more risk-based approach in corporate governance. Therefore, identification and assessment of risks became extremely important. Risk assessment poses a particular challenge for auditors due to the highly complex structure and processes of internal control systems. Extant research in this area mostly focused on probabilistic models and expert systems that capture and model heuristic knowledge. However, evidence suggests that knowledge of the structure of the internal control system is also essential. There is relatively little research that focuses on the modeling of the structural aspects of financial processes and their internal control systems as a means of helping corporate executives and auditors perform their respective tasks of risk management and assessment. This article proposes an approach to risk management and assessment in internal control systems that models the structure and financial processes of an internal control system. The model uses a directed graph to represent the various elements in an internal control system, such as financial statement assertions, control activities, financial processes, and the causal relationships that exist among these elements. The article demonstrates the usefulness of the model by presenting and discussing algorithms based on this model to help corporate executives manage risk and to help internal and external auditors assess risk, for designing substantive testing and for tracing sources of errors

Determinants of Weaknesses in Internal Control of Provincial Government in Indonesia

This study aims at examining and analysing factors that cause weaknesses in internal control system of provincial local government. Population of this study is all 34 provincial governments in Indonesia and the studied object is internal control weaknesses identified in the Provincial Government Audit Reports produced by the Audit Board of the Republic of Indonesia. Eighty three reports were used as sample ranging from 2011 to 2015. The research model of this study indicates adjusted R2 at 86% which is much higher than previous studies on this topic, Based on the multiple regression analysis, it is found that the size of local government and the use of information technology have a significant negative effect on the weaknesses of internal control. This implies that Provincial Government needs to use more information technology and allocate more resources on internal control improvement. On the other hand, the complexity of local government and the quality of human resources have positive effect on the weaknesses of internal control. These findings suggest provincial governments with large number of sub-districts to put more efforts in internal control system improvement than others. The provincial government with higher human development index needs more efforts on ethical conduct. This study contributes in investigating both financial and non-financial factors affecting internal control weaknesses of provincial government for longer period of analysis

Auditor Type and Audit Quality Differences in Nonprofit Healthcare Organizations – U.S. Evidence

The purpose of this paper is to explore audit quality in nonprofit healthcare organizations by investigating differences in audit report outcomes. Specifically, we examine the relationship between auditor type and auditor-disclosed internal control exceptions in Circular A-133 audits of U.S. nonprofit healthcare organizations. Our findings indicate audits of nonprofit healthcare organizations conducted by the Big Four CPA firms carry a lower likelihood of disclosing internal control exceptions (i.e., reportable conditions and material weaknesses) than are audits conducted by smaller CPA firms. This challenges the general contention from prior studies that the Big Four firms are better audit quality providers and indicates that the alleged superiority of Big Four firms in terms of audit quality may not be generalizable to all industry sectors.Audit quality, Auditor type, Circular A-133, Nonprofit healthcare, Single Audit Act

Presenting Modified Servqual Model to Evaluate Flight Attendant Services: Iran Air case study

Purpose: The investigation of the customer`s viewpoints and utilizing their ideas and expectations in improving the quality of the products, has turned out to be one of the key concerns of the companies working in all fields. Airline industry as one of the most extensive modes of transportation should be strictly accurate in providing services to their customers. This article attempts to investigate important dimensions from passengers' point of view and present a model which would evaluate the flight attendant's performance. Design/methodology: In order to achieve this purpose, on the basis of the literature and experts' and passengers' point of view, the SERVQUAL model has been modified with 26 factors in 6 dimensions. Then 300 data have been gathered for the Factor Analysis Model. Findings: As a result, a model with high goodness of fit has been developed which could be used as a tool of measuring quality of service with a high degree of certainty. In the end, running the model in Iran air, most differences were as below: 1-Improvement 2-Responsiveness 3-Empathy 4-Assurance 5-Tangibles 6-Reliability. Originality/value: In general, in this model, all services with which employees are involved are observed. However, the main issue in this research is related to attendant team. Consequently, considering that many of these indicators have different meanings in assessing customer satisfaction in relation to the performance of flight attendant; modifications should be made to the dimensions of the SERVQUAL model.Peer Reviewe

Targeted prevention of common mental health disorders in university students: randomised controlled trial of a transdiagnostic trait-focused web-based intervention

Background: A large proportion of university students show symptoms of common mental disorders, such as depression, anxiety, substance use disorders and eating disorders. Novel interventions are required that target underlying factors of multiple disorders.<p></p> Aims: To evaluate the efficacy of a transdiagnostic trait-focused web-based intervention aimed at reducing symptoms of common mental disorders in university students.<p></p> Method: Students were recruited online (n = 1047, age: M = 21.8, SD = 4.2) and categorised into being at high or low risk for mental disorders based on their personality traits. Participants were allocated to a cognitive-behavioural trait-focused (n = 519) or a control intervention (n = 528) using computerised simple randomisation. Both interventions were fully automated and delivered online (trial registration: ISRCTN14342225). Participants were blinded and outcomes were self-assessed at baseline, at 6 weeks and at 12 weeks after registration. Primary outcomes were current depression and anxiety, assessed on the Patient Health Questionnaire (PHQ9) and Generalised Anxiety Disorder Scale (GAD7). Secondary outcome measures focused on alcohol use, disordered eating, and other outcomes.<p></p> Results: Students at high risk were successfully identified using personality indicators and reported poorer mental health. A total of 520 students completed the 6-week follow-up and 401 students completed the 12-week follow-up. Attrition was high across intervention groups, but comparable to other web-based interventions. Mixed effects analyses revealed that at 12-week follow up the trait-focused intervention reduced depression scores by 3.58 (p<.001, 95%CI [5.19, 1.98]) and anxiety scores by 2.87 (p = .018, 95%CI [1.31, 4.43]) in students at high risk. In high-risk students, between group effect sizes were 0.58 (depression) and 0.42 (anxiety). In addition, self-esteem was improved. No changes were observed regarding the use of alcohol or disordered eating.<p></p> Conclusions This study suggests that a transdiagnostic web-based intervention for university students targeting underlying personality risk factors may be a promising way of preventing common mental disorders with a low-intensity intervention

Investigating the learning transfer of genre features and conceptual knowledge from an academic literacy course to business studies: Exploring the potential of dynamic assessment

Academic literacy courses aim to enable higher education students to participate in their chosen academic fields as fully as possible. However, the extent to which these students transfer the academic skills taught in these courses to their chosen disciplines is still under-researched. This article reports on a study that investigated the potential of dynamic assessment (an assessment approach that blends instruction into assessment) in the transfer of genre features and conceptual knowledge among undergraduate business studies students in a UK public university. The data includes three students’ written assignments (N = nine), interviews (N = three) and business studies tutor (N = three) feedback. Drawing on Vygotskian sociocultural theory of learning and a genre theory based on Systemic Functional Linguistics, the data were analysed. The findings suggest that dynamic assessment may contribute to the transfer of genre features and conceptual knowledge to a new assessment context. Implications of this for academic literacy instruction and assessment design are presented

Joining up the ombudsman - the review of the public sector ombudsman in England

The Cabinet Office Review proposal for an integrated service of public sector ombudsmen in England is a welcome development in rationalising the present system. That the various ombudsmen schemes may need “joining up” in the future was recognised some 25 years ago by Sir Alan Marre, the Parliamentary Ombudsman at the time. He considered that, in the long term, consideration would need to be given to how a more co-ordinated total system, more directly related to the interests of the public, could be brought about.2 This idea was examined in 1988 by JUSTICE,3 in a report which explored whether there should be an integrated service, under which all the ombudsmen would operate under the same legislation. Their decision however was against recommending the creation of a single scheme. More recently, the Select Committee on Public Administration considered that there was a need for greater coherence to the structure of the public sector complaints system. It recommended a review of the system, with a view to bringing the complaints authorities together