Sourcing of Internal Auditing: An Empirical Study

In recent years, the scope of internal auditing has broadened considerably, increasing the importance of internal auditing as part of the organization’s management control structure. This expanding role has changed the demands being put on internal auditors. Their new role requires different skills and competencies, and many organizations now need to face the choice whether to develop these broader competencies internally or to outsource internalauditing to outside service providers.This paper studies the factors associated with organizations’ internal audit sourcing decisions, building from a previous study by Widener & Selto (1999; henceforth W&S). In their study, W&S used Transaction Cost Economics (TCE) to explain the organization of internal auditing. Our study seeks to replicate their results, using newly collected data from 66 companies headquartered in the Netherlands. Our findings are supportive of W&S. Like W&S, we find asset specificity and frequency (both individually and in interaction) to be significantly associated with sourcing decisions in a regression model that explains 65% (adjusted R2 = 0.63) of the variance in outsourced internal auditing. Additional analyses reinforce the importance of these TCE variables in explaining organizations’ internal auditing sourcing behaviour.transaction cost economics;internal auditing;make-or-buy decision

Sourcing of Internal Auditing: An Empirical Study

In recent years, the scope of internal auditing has broadened considerably, increasing the importance of internal auditing as part of the organization’s management control structure. This expanding role has changed the demands being put on internal auditors. Their new role requires different skills and competencies, and many organizations now need to face the choice whether to develop these broader competencies internally or to outsource internalauditing to outside service providers. This paper studies the factors associated with organizations’ internal audit sourcing decisions, building from a previous study by Widener & Selto (1999; henceforth W&S). In their study, W&S used Transaction Cost Economics (TCE) to explain the organization of internal auditing. Our study seeks to replicate their results, using newly collected data from 66 companies headquartered in the Netherlands. Our findings are supportive of W&S. Like W&S, we find asset specificity and frequency (both individually and in interaction) to be significantly associated with sourcing decisions in a regression model that explains 65% (adjusted R2 = 0.63) of the variance in outsourced internal auditing. Additional analyses reinforce the importance of these TCE variables in explaining organizations’ internal auditing sourcing behaviour

Research on Big Data Audit Application in Commercial Banks

Along with the rapid progress of technology, such as the Internet, cloud computing, mobile communications, and a wide variety of applications, big data has deeply penetrated into all of our fields and become an important tool that not only changes the way we think, but also advances our business model. Along with increasingly complex operations and advances in Internet technology, internal auditing has become increasingly important. Using these new technologies, we are able to analyze and apply a large amount of data in depth to accurately recognize and evaluate various types of potential business risks, and we are able to give our clients the best auditing solutions based on the conclusions of these studies and analyses, thus helping them to enter a new market

Toward efficient and secure public auditing for dynamic big data storage on cloud

University of Technology Sydney. Faculty of Engineering and Information Technology.Cloud and Big Data are two of the most attractive ICT research topics that have emerged in recent years. Requirements of big data processing are now everywhere, while the pay-as-you-go model of cloud systems is especially cost efficient in terms of processing big data applications. However, there are still concerns that hinder the proliferation of cloud, and data security/privacy is a top concern for data owners wishing to migrate their applications into the cloud environment. Compared to users of conventional systems, cloud users need to surrender the local control of their data to cloud servers. Another challenge for big data is the data dynamism which exists in most big data applications. Due to the frequent updates, efficiency becomes a major issue in data management. As security always brings compromises in efficiency, it is difficult but nonetheless important to investigate how to efficiently address security challenges over dynamic cloud data. Data integrity is an essential aspect of data security. Except for server-side integrity protection mechanisms, verification from a third-party auditor is of equal importance because this enables users to verify the integrity of their data through the auditors at any user-chosen timeslot. This type of verification is also named 'public auditing' of data. Existing public auditing schemes allow the integrity of a dataset stored in cloud to be externally verified without retrieval of the whole original dataset. However, in practice, there are many challenges that hinder the application of such schemes. To name a few of these, first, the server still has to aggregate a proof with the cloud controller from data blocks that are distributedly stored and processed on cloud instances and this means that encryption and transfer of these data within the cloud will become time-consuming. Second, security flaws exist in the current designs. The verification processes are insecure against various attacks and this leads to concerns about deploying these schemes in practice. Third, when the dataset is large, auditing of dynamic data becomes costly in terms of communication and storage. This is especially the case for a large number of small data updates and data updates on multi-replica cloud data storage. In this thesis, the research problem of dynamic public data auditing in cloud is systematically investigated. After analysing the research problems, we systematically address the problems regarding secure and efficient public auditing of dynamic big data in cloud by developing, testing and publishing a series of security schemes and algorithms for secure and efficient public auditing of dynamic big data storage on cloud. Specifically, our work focuses on the following aspects: cloud internal authenticated key exchange, authorisation on third-party auditor, fine-grained update support, index verification, and efficient multi-replica public auditing of dynamic data. To the best of our knowledge, this thesis presents the first series of work to systematically analysis and to address this research problem. Experimental results and analyses show that the solutions that are presented in this thesis are suitable for auditing dynamic big data storage on cloud. Furthermore, our solutions represent significant improvements in cloud efficiency and security

THE MODERATING ROLE OF IT AUDITING ON INTEGRATED PHARMACEUTICAL LOGISTICS SYSTEM (IPLS), USER SATISFACTION AND LOGISTICS PERFORMANCE OF ETHIOPIAN HOSPITALS

Health is one of the crucial elements for the development of any country and the well being as well as productivity of its citizens. Controlling and auditing the risk that may come from deploying IT for health provision is a key issue in society. This study will assess the moderating role of IT auditing on the relationship among IPLS, user satisfaction and logistics performance of health commodities in Ethiopian hospitals. Data will be collected from respondents in selected Public and Private Hospitals throughout the country using questionnaires by adopting multi stage simple sampling process(Regions, Zones, and Woredas are used to trace hospitals). The study will employ explanatory research design with quantitative approach. The data collected will be analyzed using correlation and regression analyses to investigate the effect of the independent and moderating variables on the dependent variables. The study will have significant contributions for academics, practice, policy and research

The relationship between non-audit service fees and audit fees in the banking sector in Malaysia

The issue of audit fees and non-audit fees charged by the audit firms has been discussed regularly in accounting and auditing literature. Recently, due to the corporate scandals in United States, the issue is discussed together with a host of revelations about audit failures that led to the companies’ demise. The auditing profession is being badly blamed and some suggest that this could be due to the audit firm’s reliance more on non-audit services rather than the audit itself. Therefore, this study attempts to probe the situation in Malaysia using the banking sector as the subject of interest. Specifically, it tries to examine the impact of non-audit services conducted by audit firms to these banks on audit fees. The results showed that the variable of non-audit fees is statistically significant in determining audit fees as predicted. Further sensitivity analysis showed that the results are robust to different measurements and company size

The influence of banks on auditor choice and auditor reporting in Japan

Debt as opposed to equity as the major source of financing and the influence of banks on the corporate governance of listed companies are unique features of the Japanese business environment. This thesis investigates how these features affect the choice of auditor by Japanese listed companies and auditor reporting by Japanese CPA firms on those companies. Pong and Kita (2006) provided some univariate analyses and indicated that Japanese companies tended to select the same external auditors as their main banks to reduce the agency costs. In this thesis, I further examine the influence of main banks on auditor selection by logistic regression and also investigate the influence of main banks on auditor reporting quality after controlling self-selection bias. Using data from Japanese listed companies in the Tokyo Stock Exchange over the 2002-2008 period, I provide empirical evidence that companies with more reliance on main bank loans are more likely to choose their main banks’ external auditors. Using the Propensity Score Matching method and the Heckman two-step binary probit model to control for self-selection bias, the empirical results support the hypothesis that main bank auditors are more likely to issue modified opinions to the borrowing companies than non-main bank auditors, providing evidence of higher audit quality from main bank auditors. As a sensitivity test, I also use discretionary accruals as a measure of audit quality. the results indicate that companies who choose the same auditors as their main banks have higher audit quality than companies who choose different auditors from their main banks. My thesis contributes to the existing auditing literature in several ways. First, by studying the influence of debt financing on auditor choice and auditor reporting, this thesis extends the auditor market research that focuses mainly on the role of auditors in equity markets to the bank-based market. Furthermore, this thesis also complements auditing research on the influence of institutions on audit quality