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The aim of this contribution is to present managers and owners of SMEs with a comprehensive concept for the preparation and implementation of a systemic approach to management auditing. The concept is presented in the form of a model called the “Systemic Approach to Management Audits”, as developed by the author. The principle behind the model is to conduct individual audit activities according to a predetermined order, as represented by a sub-model called “Advised Activities during Management Audits”. The model, or the application of a purposeful, standardized and, above all, systemic approach, was compiled on the basis of a two-phase questionnaire survey conducted in 2015/2016 and 2018/2019 among managers of SMEs, as well as guided interviews with professional auditors. The partial aim is to also highlight the relatively poor knowledge and implementation of management auditing in SMEs, and to encourage the use of the presented methodology by them.

We examine whether and how individual auditors affect audit outcomes using a large set of archival Chinese data. We analyze approximately 800 individual auditors and find that they exhibit significant variation in audit quality. The effects that individual auditors have on audit quality are both economically and statistically significant, and are pronounced in both large and small audit firms. We also find that the individual auditor effects on audit quality can be partially explained by auditor characteristics, such as educational background, Big N audit firm experience, rank in the audit firm, and political affiliation. Our findings highlight the importance of scrutinizing and understanding audit quality at the individual auditor level.

Purpose The two aims of this study were first to analyse the feasibility and utility (to improve the care process) of implementing a new real time random safety tool and second to explore the efficacy of this tool in core hospitals (those participating in tool design) versus non-core hospitals. Methods This was a prospective study conducted over a period of 4 months in six adult intensive care units (two of which were core hospitals). Safety audits were conducted 3 days per week during the entire study period to determine the efficacy of the 37 safety measures (grouped into ten blocks). In each audit, 50 % of patients and 50 % of measures were randomized. Feasibility was calculated as the proportion of audits completed over those scheduled and time spent, and utility was defined as the changes in the care process resulting from tool application. Results A total of 1323 patient-days were analysed. In terms of feasibility, 87.6 % of the scheduled audits were completed. The average time spent per audit was 34.5 ± 29 min. Globally, changes in the care process occurred in 5.4 % of the measures analysed. In core hospitals, utility was significantly higher in 16 of the 37 measures, all of which were included in good clinical practice guidelines. Most of the clinical changes brought about by the tool occurred in the mechanical ventilation and haemodynamics blocks. Multivariate analyses demonstrated that changes in the care process in each block were associated with the core hospital variable, staffing ratios and severity of patient disease. Conclusions Real time safety audits improved the care process and adherence to the clinical practice guidelines and proved to be most useful in situations of high care load and in patients with more severe disease. The effect was greater in core hospitals.

Not all Islamic higher education in Indonesia have references for conducting an internal audit. Moreover, not all of them have internal auditors. In fact, the latest ministerial regulation has required each Islamic higher education to have an internal audit team. It overwhelms Islamic higher education to form and operate internal auditor teams because there are no fixed standards. However, several Islamic higher education institutions have formed and run an internal audit function. Thus, this study aims to determine the pattern of internal audit management in Islamic higher education. This study used a qualitative approach to figure out the pattern of internal audit management in two Islamic higher education institutions that had already had internal auditors before the latest regulations were published. As a result, there were similarities and differences between the two patterns. These similarities and differences will be used as a reference standard for internal audits in Islamic Higher Education.

With the current shift toward real-time audit review, subordinates become aware of supervisors' views earlier in the audit process. I use an experiment to examine whether earlier knowledge of supervisors' views increases subordinates' tendencies to agree with those views because subordinates predecisionally distort evidence. In a going-concern task, I find that auditors who learn the partner's view before evaluating evidence (1) evaluate individual evidence items as more consistent with the partner's view, and (2) make going-concern judgments that are more consistent with the partner's view, than do auditors who learn the same partner's view after evaluating evidence. In a second experiment, I examine whether auditors anticipate the distortion's effect on subordinates' judgments. I find that auditors expect subordinates to make judgments that agree with supervisors' views, but auditors do not expect subordinates to agree even more with those views when subordinates learn those views earlier in the audit process.

Opponents of mandatory rotation argue that a change of partner is bad for audit quality, as it results in a loss of client-specific knowledge. On the other hand, proponents argue that a change of partner is beneficial, as it results in a positive peer review effect and a fresh perspective on the audit. We test the impact of mandatory partner rotation on audit quality using a unique dataset of audit adjustments in China. Our results suggest that mandatory rotation of engagement partners results in higher quality audits in the years immediately surrounding rotation. Specifically, we find a significantly higher frequency of audit adjustments during the departing partner's final year of tenure prior to mandatory rotation and during the incoming partner's first year of tenure following mandatory rotation.

We develop a contingency approach to explain how firm ownership influences the monitoring function of the board—measured as the magnitude of external audit fees contracted by the board—by extending agency theory to incorporate the resource dependence notion that boards have distinct incentives and abilities to monitor management. Analyses of data on Continental European companies reveal that while board independence and audit services are complementary when ownership is dispersed, this is not the case when ownership is concentrated—suggesting that ownership concentration and board composition become substitutes in terms of monitoring management. Additional analysis shows that the relationship between board composition and external audit fees is also contingent upon the type of the controlling shareholder.

The spread of the principles and techniques of financial accounting into new systems for measuring, ranking, and auditing performance represents one of the most important and defining features of contemporary governance. Audit procedures are redefining accountability, transparency, and good governance and reshaping the way organizations and individuals have to operate. They also undermine professional autonomy and have unanticipated and dysfunctional consequences. Taking up the concept of audit culture as an analytical framework, we examine the origins, spread, and rationality driving these new financialized techniques of governance, not least through the work of the Big Four accountancy firms, and trace their impact across a number of fields, from administration and the military to business corporations and universities. We ask, what new kinds of ethics of accountability does audit produce? Building on Mitchell (1999), Strathern (2000a), Trouillot (2001), and Merry (2011), we identify how the techniques and logics of financial accountancy have five audit effects. These are “domaining,” “classificatory,” “individualizing and totalizing,” “governance,” and “perverse” effects. We conclude by reflecting on the problems of audit culture and suggest ways to reclaim the professional values and democratic spaces that are being eroded by these new systems of governing by numbers.

Although regulation makes audit committees responsible for determining and negotiating audit fees, researchers and practitioners express concerns that CFOs continue to control these negotiations. Thus, regulation may give investors a false sense of security regarding auditor independence. We utilize the recent financial crisis and economic recession as an exogenous shock that allows us to shed light on the relative influence of the audit committee and the CFO on fee negotiations. During the recession, we find larger fee reductions in the presence of more powerful CFOs, and smaller fee reductions in the presence of more powerful audit committees. We also find the CFO or the audit committee primarily influences fees when their counterpart is less powerful. Our findings suggest a more complex relationship between the CFO and the audit committee than current regulations recognize and cast doubt on the ability of regulation to force one structure on the negotiation process.

To ensure that audit committees provide sufficient oversight over the auditing process and quality of financial reporting, legislators have imposed stricter requirements on the independence of audit committe members. Although many audit committees appear to be \"fully\" independent, anecdotal evidence suggests that CEOs often appoint directors from their social networks. Based on a 2004 to 2008 sample of U.S.-listed companies after the Sarbanes-Oxley Act, we find that these social ties have a negative effect on variables that proxy for oversight quality. In particular, we find that firms whose audit committees have \"friendship\" ties to the CEO purchase fewer audit services and engage more in earnings management. Auditors are also less likely to issue going-concern opinions or to report internal control weaknesses when friendship ties are present. On the other hand, social ties formed through \"advice networks\" do not seem to hamper the quality of audit committee oversight.