The role of internal audit function in the public sector context in Saudi Arabia

This paper contributes to the debate on the role of internal auditing in the public sector by focusing on the nature and practice of internal auditing in organisations that are subject to audit by the General Audit Bureau. Archival and documentary analysis, supported by 29 semi-structured interviews revealed that the underpinnings of the Saudi Internal Audit Regulation did not tie in directly with perceived international best practice - the International Standards for the Professional Practice of Internal Auditing. Institutional factors are also likely to play a part in terms of the existence of the state-required ‘Follow-up department’ in all organizations, tasked with performing investigation and inspection, the ‘auditing department’ (which monitors the propriety of transactions and accounting), and the work of the mandatory ‘Financial Representative (Controller)’

Does Audit Quality in Libya Meet the International Standards Levels?

This study provide empirical evidence of the current situation and measure the perceptions of the level of audit quality in Libya by focusing on oil companies. It aims to examine the extent to which Libyan Accountants and Auditors Association (LAAA) and audit firms and play an essential role in enhancing the quality of audit and developing the audit profession. A questionnaire and interviews were used to collect data from audit firm that works in Libya and Libyan oil companies. The study finds that there is a lack of professionalism among auditors in Libya is pervasive and that weaknesses in the current regulatory framework are detrimental and have led to the ineffectiveness of the LAAA. In addition, the ignorance of audit firms in Libya in respect of new services, and the inability of Libya’s education system to produce competent graduates, all contribute to the low level of audit quality that the profession

Perceptions of Auditor Independence in Libyan Audit Market

This paper attempts to examine the adverse circumstances of auditing, assess the current status and gauge the perceptions of the auditor independence in Libya. It aims to investigate the extent to which audit firms and the Libyan Accountants and Auditors Association (LAAA) play an important role in developing the profession of auditing and enhances auditor independence. The study also indicates a view that, to improve and develop the accounting and auditing profession in general, and to enhance the level of the perception of auditor independence in particular, the LAAA as a professional body should have more power and authority in the Libyan audit market. Data were collected by two methods, a questionnaire survey (quantitative) and a number of semi-structured interviews (qualitative) to give both triangulation and amplification. The questionnaire was analysed using both conventional comparative statistics and multivariate methods. The sample of respondents comprised three groupings: accounts managers, financial managers and internal auditors working in Libyan public companies; managing partners, partners, audit supervisors and auditors working in audit firms in Libya; and controllers working for the Libyan Association of Auditors and Accountants (LAAA). The results of the study indicate two groups supported the proposition that the LAAA should adopt international auditing and accounting standards to improve the perception of auditor independence. More important, public companies and audit firms preferred that there should be a law or rule to require public companies to disclose in the financial statements the amount of audit and non-audit services fees paid

Do the Big 4 and the Second-Tier Firms Provide Audits of Similar Independence?

In this paper, we examine the relation between the Big 4 and Second-tier auditors with auditor independence. Prior research suggests that the Big 4 audit firms are of higher independence than are non-Big 4 firms. The study also indicates a view that, both the public company respondents and audit firm respondents perceived the Big Four audit firms as having a higher auditor independence than other audit firms, which is consistent with findings of (Abu Bakar et al., 2005; DeAngelo, 1981b) Data were collected by two methods, a questionnaire survey (quantitative) and a number of semi-structured interviews (qualitative) to give both triangulation and amplification. The questionnaire was analysed using both conventional comparative statistics and multivariate methods. The sample of respondents comprised three groupings: accounts managers, financial managers and internal auditors working in Libyan public companies; managing partners, partners, audit supervisors and auditors working in audit firms in Libya; and controllers working for the Libyan Association of Auditors and Accountants (LAAA). The results of the study indicate two groups agreed that the big audit firms have enough financial resources and a large number of clients, which means they can resist client management pressure, and protect their reputation

The Advantages and the Challenges of Adopting IFRS into UAE Stock Market

This paper aims to assess the benefits gained and the challenges experienced by companies listed on the UAE stock market following the introduction of IFRS. Since the announcement by the European Union to adopt IFRS by listed companies, many countries have followed suit, hoping to gain competitive edge in attracting the Foreign Direct Investment to boost their economic growth. This study focuses on examining the advantages and challenges faced by companies listed on the UAE stock market listed companies as a result of adopting IFRS. The framework used in this analysis will be based on the identification and assessment of key drivers influencing companies listed on the UAE stock market. To what extent are these factors internal or external to the financial sector, but which have a direct bearing on the overall economic environment? The views and perceptions of the Chief Financial Officers’ (CFOs) for Dubai and Abu Dhabi listed companies, financial analysts of the financial statements in the two listed companies and auditors will be analysed. Methodology: Questionnaires were used as the main method of data collection. Questionnaire were distributed in both Dubai and Abu Dhabi markets, The data obtained through the questionnaires have been imported into software for analysis, namely, the Statistical Package for the Social Sciences (SPSS). Findings: The results clearly show that the benefits of adopting IFRSs in UAE inevitably far outweigh the difficulties and costs. The findings also reveal that adoption of IFRSs in UAE stock markets has improved the overall standard of the quality of financial reporting, which help in attracting investors to invest in the UAE stock markets. However, many respondents were still apprehensive that effective and professional financial reporting decisions will be affected by the level of education of accounting users, the methods provided by some IFRSs, and the inadequate enforcement mechanisms. Keywords: IFRS, advantage, accounting standards, challenge, UA

Audit firm size and quality: Does audit firm size influence audit quality in the Libyan oil industry?

This study examines the relation between size of audit firm and audit quality, and the choice of accrual measures for a large sample of firms. In relation to the impact of different sizes of audit firms on audit quality, a clear majority of oil companies and audit firms agreed that Big Four firms are superior to their non-Big Four counterparts in all of the reputation issues presented to them, and that the size of the audit firm is positively associated with audit quality. Such superiority is seen in terms of resources and audit technology, and the consequent motivation to perform as professionally as possible. A questionnaire was used to collect data. To confirm and support the questionnaire findings, semi-structured interviews were conducted. The data used for this study were collected from two sources: the demand side (Libyan oil companies) and the supply side (audit firms working in Libya). The data for the Libyan oil companies were gathered from three different types of respondents: internal auditors, financial managers and accounts managers. For the audit firms, data were gathered from employees at all levels in the firm: managing partners, audit supervisors and auditors

The Future of Internet Corporate Reporting – Creating the Dynamics for Change in Emerging Economies: A Theoretical Framework and Model

This study aims to develop a generic framework for the adoption of Internet corporate reporting (ICR), in developing countries, and to test the applicability of this framework by undertaking an empirical study in a developing country, namely Jordan. The key literature focuses mainly on economic-based theories in explaining different ICR practices as a voluntary disclosure channel. The theoretical foundation underpinning the study integrates several of these disclosure frameworks with innovation diffusion theories. A questionnaire survey was conducted among 150 CEOs and CFOs of companies, with usable websites, listed on the Amman Stock Exchange. Based on managers’ evaluation, four factors were further identified as significant contributors to ICR adoption, namely cost-benefit balance, management commitment, internal technology readiness, and users’ attention. Given the lack of an overarching theoretical framework for studying ICR, this study presents an assessment framework for ICR adoption, which enables managers to evaluate the current status of a company in respect of three aspects of readiness to engage in ICR, these being: organisation, technology, and environment

Perceptions of Auditing and the Provision of Non-Audit Services: Case Study in Libya

This paper examines whether non audit service are associated with audit quality. In relation to the impact of non-audit service on audit quality, the provision of NAS to audit clients was found to provide auditors with greater experience of the client’s industry and greater access to the client’s accounting system. Additionally, such an arrangement was considered to enhance audit quality, but simultaneously it was also believed that a separation of NAS from audit services was desirable since auditors are perceived to have greater credibility when the demarcation is clear. A questionnaire was used to collect data. To confirm and support the questionnaire findings semi-structured interviews were conducted the data used for this study was collected from two sources: the demand side (Libyan oil companies) and the supply side (audit firms working in Libya)

The Harmonising of Auditing Standards in Emerging Economies from The Stakeholders’ Perspectives

The literature has highlighted the increased pressure on the auditing profession to achieve global harmony in auditing practice (i.e. Humphrey et al., 2009; Michas, 2011; Holm & Zaman, 2012), thereby requiring auditing regulators and standards-setters to revise and improve auditing standards in their own local contexts. This study seeks to determine the contemporary conduct and determinants of local auditing practice and offers an analysis of how Libyan audit stakeholders perceive the prospect of adopting harmonised auditing standards or developing such a set of standards for local use. A survey was completed by 196 respondents, representing five stakeholder groups in the Libyan auditing arena. Statistical analysis, via the SPSS, was performed. The outcomes are deemed to be generalizable given the size of the sample. This study has found that the Libyan Accounting and Auditing practice have varied according to variable concerning the personnel involved. And that the result is an overall poor quality of audit work in the country. This needs to be raised, and the harmonisation of audit standards is one way to achieve not only this but a greater degree of credibility in the country’s financial reporting. The study contributes to the body of literature in respect of the Libyan accountancy environment by specifically exploring the perception of stakeholders towards the adoption of harmonised audit standards. By implication, it makes a contribution to the wider body of knowledge about auditing in the Arab countries, where similar cultural conventions and attitudes exist