This study examines the relationship between internal and external auditors, with particular emphasis on the co-operation between internal and external auditors, and the reliance of external auditors on the internal audit work, in local authorities. Previous studies indicate that some work has been undertaken to determine the factors that affecting external auditors' reliance on internal auditors' work. However, studies on the relationship between internal and external auditors, in terms of their co-operation,. and the impact of such a relationship on the external audit fees are still limited. In addition, all of the previous studies were conducted in the private sector context and so far nothing is known about the relationship between internal and external auditors in the public sector. Thus, the aim of this study is to fill this g~p by examining the relationship between two corporate governance mechanisms, namely, internal audit and external audit, and the factors that affect external auditors' reliance on internal auditors' work in two different countries, England and Malaysia. A mixed method approach, using both quantitative and qualitative methods, has been adopted in this study. Two different surveys of internal and external auditors concerned with their perceptions of the relationship between internal and external auditors were carried out in England and Malaysia. A total of 387 questionnaires were mailed to the Heads of Internal Audit in each of the English local authorities. Another 142 questionnaires were mailed to all the appointed auditors of the local authorities. Similarly, two different questionnaires were used for the Malaysian data collection. A total of 28 questionnaires were mailed to the Head of the Internal Audit Department and another 11 questionnaires were sent to the Directors of National Audit Department (external auditors) of local authorities. The survey findings indicate that the internal and external auditors in Malaysia perceived that they have a moderate level of co-operation between them, while the internal and external auditors in England perceived their level of co-operation as high. The external auditors in England were able to place reliance on the internal audit work. However, in Malaysia there was no reliance on internal . auditors' work by the external auditors, because the internal auditors did not perform work relevant to financial statement audits. The size of the internal audit department, the internal auditors' knowledge of the local authority, and top management support of the internal auditors' work were the significant factors perceived by the internal and external auditors of local authorities in England as affecting the level of external auditors' reliance on internal auditors' work. This study contributes to the extant literature by providing evidence using primary data from English and Malaysian local authorities. From a practical perspective this study could provide feedback to the relevant government departments and audit bodies on the need for policies that support and enhance the relationship between internal and external auditors.

Purpose: The main purpose of this study is to investigate from the users' perspective the influence of adopting IAS 36 'impairment of assets' on accounting information in Jordan and to ascertain the extent to which impairment application can affect users’ decisions. In other words, this study aims to elicit perceptions regarding the motivations and techniques of using impairment loss to discover its effect and role in improving the quality (qualitative characteristics) of accounting information and its impact on the financial statements of users, to assist them in the decision-making process; it also aims to discover whether impairment loss is considered a tool for increasing the credibility of accounting information or a tool for manipulation. To explore the relevance (applicability) of international accounting standards to developing countries such as Jordan is a topic of significant interest amongst accounting information users. Methodology/Approach/Research Questions: This thesis uses a multi-method approach; quantitative and qualitative approaches are both used to collect primary data concerning the 'impairment of assets' phenomenon. Questionnaire and interview surveys are used to explore the motivations and techniques of 'impairment of assets' in Jordan by obtaining the perceptions of respondents. Semi-structured interviews are used to elicit a better understanding of the research questions, confirming and elaborating on the questionnaire survey findings and supporting the development of the hypotheses. The triangulation of findings enables a comprehensive appreciation of the research topic and minimises the possibility of bias resulting from the use of a single method. Analysis and Findings: The first findings are the agreement of the six groups of accounting information users regarding the importance of IAS 36 application, also indicate that there is a significant statistical difference among the respondents' opinions particularly between academics and other groups which indicates that academics were more aware of the importance of applying 'impairment of assets' than the other five groups. A plausible explanation for this result is that academics are more aware that impairment loss depends on market value (fair) instead of historic value, which is more convenient but less reliable. The main conclusion reached through questionnaire and interview survey is the positive impact of 'impairment of assets' on the quality of accounting information according to users' perspective in Jordan. which means there is an impact of impairment on the quality of accounting information, and we assert this finding through correlation that impairment loss depend on market value (fair) instead of historic value, which is more convenient but less reliable . The second finding reveals that two groups of respondents (Accountants and Investors) see impairment as a tool for manipulation. These two groups have similar views that impairment application is considered a technique used to manipulate illegally, in order for managers to achieve their own goals, such as increased compensation (salary), to declare a reasonable profit and avoid a loss, to obtain loans, and to raise share prices. These results can be attributed to scientific knowledge they have about advantages of the application of this standard. Furthermore, interview findings indicate that 68% of all respondents amongst all groups agreed that impairment improves the reliability and credibility of financial reports in Jordan. One of the most important results from the respondents’ views is that impairment announcements provide new information to the market and assist the users to change or modify their decisions. However, interviews showed that investors and accountants have a different view of impairment application, considering it as bad news (weak company), all of these findings will be generalized for developing countries, also will be helpful for developed countries. Research limitations/implications: These findings could be fruitful and helpful for external users of accounting reports and also for regulators and legislators in their attempts to constrain the incidence of earnings management and to enhance the quality of accounting information. The interview sample was quite small (only 14) since some interviewees in developing countries do not like to have their opinions tape-recorded or become worried if notes are taken by devices during the interview as it appears like an interrogation to them. Moreover, in the questionnaire survey, only 324 out of 749 were returned, since access to respondents (Elements sample) was very difficult as they do not stay in the same place. In terms of secondary data, a lack of disclosure limited this study regarding the variables. Contribution: Very few studies concerned with 'impairment of assets' have been conducted on data obtained from financial reports in developed countries. Thus, a different perspective could be obtained from developing countries such as Jordan, which is different in numerous respects, and this will enhance IAS application and provide an accurate picture of impairment practices. Moreover, this study contributes to the literature by employing qualitative and quantitative methods that have not received attention in relation to the effect of monitoring mechanisms.

The thesis consists of two main parts. First, the thesis is examining the level of voluntary corporate disclosure of the Egyptian companies' annual reports during the period of 2004-2005 and 2005-2006. The examined level is justified by the impact of two groups of· determinants; firm characteristics, including firm size, firm profitability, and industrial membership, and corporate governance characteristics, including board size and role duality. The findings of this part of the thesis indicate a relatively low level of voluntary corporate disclosure. Moreover, it is found that firm characteristics have a significant impact of the level of voluntary disclosure, while corporate governance characteristics have an in significant impact on the level of this sort of disclosure. In addition, the thesis examined these relationships not only on the total level of voluntary disclosure, but also for each category of this examined disclosure. Second, the thesis is examining the existence of the auditing expectations gap in Egypt through the different stakeholders' perceptions. The findings indicate the existence of this sort of gap in Egypt. Therefore, the thesis is investigating the usefulness and effectiveness of the traditional methods, including audit report fOrni, user's education, and standards settings, in comparison to each other in reducing the existing gap. In addition, the thesis provides the theoretical bases for selecting the voluntary corporate disclosure auditing as an effective method of reducing such existing gap. Therefore, the thesis is investigating the usefulness and effectiveness of voluntary corporate disclosure 'auditing, as a proposed method of reducing the existing expectations gap, in comparison to the traditional methods. The findings of this part of the thesis indicate that voluntary disclosure auditing is an effective method of reducing the auditing expectations gap in comparison to the traditional methods. Furthermore, the thesis points the most important categories of voluntary disclosure that would be worth it to begin with as have a countable impact on reducing the expectations gap. However, it is noted that the relatively important categories of voluntary disclosure that would effectively contribute to the reduction of the auditing expectations gap are characterized by scoring a relatively low level of disclosure. Therefore, the thesis is suggesting two stages to reduce the auditing expectations gap through voluntary disclosure auditing. First, is to increase the level of voluntary disclosure of these categories in the Egyptian companies' annual reports. Second, is auditing these categories of voluntary disclosure as an introductory stage of launching the concept of voluntary disclosure auditing. Finally, it is recommended by the thesis to introduce this new area of auditing of voluntary disclosure. However, this new area of auditing needs further research concerning the qualifications and procedures required to apply this new paradigm to make it ready to be in action. Moreover, auditing voluntary disclosure does not mean that it would be obligatory for the companies to have this sort of disclosure, as this would affect the voluntary nature of these disclosures, but if the companies have chosen to disclose this sort of information voluntarily, so it is obligated to audit these disclosures as a matter of securing the stakeholders against any manipulated information that may direct them towards making wrong decisions.

The recent global financial crisis has added fuel to the heated debate on whether boards of directors in general and audit committees in particular are effective in curtailing aggressive financial reporting practices and maintaining a transparent audit process. Specifically, UK regulators raised widespread concerns about the criteria of revenue recognition and the role of external auditors during and after the crisis, and re-emphasize the crucial role that audit committees could play in ameliorating financial reporting quality and safeguarding the quality of external audit. Despite this intense emphasis on the financial reporting and external audit oversight roles of internal governance mechanisms, there is still no empirical evidence confirming the effectiveness of these roles after the financial crisis. As such, this thesis contributes to the literature by using a sample of FTSE 350 firms listed on the London Stock of Exchange during the period between 2008 and 2010 to address two main empirical questions in two investigations. The first empirical investigation deals with the impact of audit committee and board characteristics on financial reporting quality. Two measures are employed to serve as surrogates for financial reporting quality. The first measure, which contributes to the uniqueness of this study, is discretionary revenues used to address misleading revenue recognition concerns by UK regulators, and discretionary accruals employed to account for the possibility of firms shifting from one earnings management method to another. The results reveal significant associations between a number of governance characteristics and discretionary revenues, but not discretionary accruals. This suggests that in response to UK intense regulatory scrutiny over the criteria of revenue recognition, firms’ revenue recognition process was subject to increased monitoring by boards in general and audit committees in particular, leading to better quality financial reporting. The second empirical investigation of this thesis examines the association between audit committee and board characteristics on the one hand and audit fees and non-audit fees on the other. The findings reveal that audit fees are positively related to governance mechanisms indicating that the oversight roles of audit committees and boards have positive impact on enhancing audit quality through demanding wider audit scope from external auditors. However, non-audit fees are also found to be positively related to audit committee meetings and board size, suggesting that the committee and the board support the simultaneous provision of audit services and non-audit services to facilitate a beneficial knowledge spill-over between the two services which in turn results in a better audit quality. Comparing the main results with those obtained from an additional analysis of a sample of firms listed in the pre-financial crisis period between 2005 and 2007 indicates that the effectiveness of governance mechanisms in enhancing financial reporting quality differs between regular and recession periods. Overall, most of the findings are consistent with the agency perspective. Those which are not consistent open avenues for future research to explore a multi-theoretical approach which takes into consideration the complexities of firms and their environmental circumstances.

No description available.

Many accounting researchers in recent decades have come to realise the importance of recognising that accounting is more than a purely technical phenomenon divorced from the wider context in which it operates. Accounting should be viewed as a social practice intertwined with the social, political and economic environments in which it is functioning. Previous studies have established that the emergence and the development of the accountancy profession in former colonised countries did not always follow the same track as in developed countries for many reasons. Therefore, the need for further research in the context of Libya is justifiable as previous studies of the Libyan accountancy profession have generally ignored the influence of socio-political and historical factors. The primary aim of this thesis is to examine the emergence and the development of professional accountancy in the context of Libya during three different periods: the colonial eras (1551-1951), post-independence (1951-1969) and in the aftermath of the military coup (1969-2003). The secondary aim of this research is to investigate the conditions of possibility which lead towards the emergence of the accountancy profession in Libya, and link the outcomes of professionalization endeavours to the wider social context in which they occurred. To achieve the objectives of this research, this study relies on the ideas of power and knowledge relations introduced by Michel Foucault. Foucault’s ideas provide a better understanding of the emergence and the development of the accountancy profession, as ‘events’ and ‘discourses’ are central to understanding the emergence and the functioning of particular phenomena. Foucault explored how disciplinary knowledge functioned and how power was exercised. Thus, the professional body is viewed as a body of knowledge which emerged as a result of power relations. The study explores the multiple discourses which led to the emergence of the accountancy profession. The auditing profession started to emerge during the British administration which indicates that the British contributed to the evolution of the accountancy profession in Libya. The findings of this research provide an alternative view to the professionalization process in Libya. Also the findings of this research suggest that the accountancy profession was emerged and developed through banks during the 1950s and not through oil companies. Finally, the emergence of the Libyan Association of Auditors and Accountants LAAA is the outcome of the interplay between individuals (Libyan accountants) and institutions (the RCC and the FM) after the military coup in 1969.

This work has been primarily concerned with the testing of the hypothesis that the investment performance of small firms is impaired as a result of capital expenditure being motivated more by reaction to events than by conscious strategy. If small firms were intent upon optimum performance then they would presumably seek to achieve this by sound investment programming. But the results of researching 65 small firms in the wider Plymouth area between 1970 and 1975 indicated that firms chose to ignore, and even avoid, certain opportunities to optimise returns on net assets. For example, survival or satisfactory profits only, emerged as fundamental goals. Investment strategies were negative or defensive even if apparent, and capital spending was determined in the majority of cases by the "necessity criterion". Firms clearly preferred to use their own funds for investment purposes and external finance was generally avoided despite profit potential. Companies were mainly indifferent to discounted cash flow and although returns on net assets were superior in the firms employing "operations research" methods, very few respondents were convinced of the benefits of certain management techniques, including D.C.F. Significantly, on an average basis, just over 60% of the sample firms actually failed to reach the target returns on investment which they had set themselves. Hardly any firms had employed consultants and were obviously prejudiced against them despite the absence of actual experience and the fact that rates of return on net assets of the pro-management consultant firms were impressive both in the Plymouth Survey and in the literature. Pricing was based upon rigid criteria, and any flexibility depended upon circumstances rather than policy. Yet flexible pricing did produce superior rates of return. Similarly, outputs were also rigidly determined and levels were rarely manipulated to achieve optimisation of overall performance. Despite an average level of 17% excess capacity, there was negligible market research, market seeking, or advertising, even though sales growth appeared to pay dividends. Finally, there was a significant correlation between returns on net assets and the adoption of a 12 point plan aimed at increasing profitablity. Unfortunately, the 12 point plan was by no means comprehensively employed by the sample firms. In short, the evidence strongly suggested that the firms' overall investment behaviour was generally inconsistent with the goal of optimisation, and in this respect the hypothesis was principally substantiated. Alan Hankinson School of Management Summer 1977.

No description available.

Since the recent accounting scandals, policy makers and regulators have been developing strict measures coupled with continuous improvements in corporate governance practices to protect the economy from corruption and fraudulent acts. Forensic accounting has emerged in an effort to detect and prevent these financial crimes. This research focuses on investigating the practice of forensic accounting in the UK and the role of the accounting profession in the professionalisation of forensic accounting. Drawing from Abbott’s (1988) thesis of a system of professions, the study sets out to examine the problem that has initiated the need for this professional work; how the accounting profession’s subjective interpretation of this problem has impacted their legitimation of the forensic accounting practice; the professional work that the accounting profession has managed to legitimise through such subjective interpretation; the abstract and professional knowledge needed to legitimise, strengthen and extend the accounting profession’s expertise into new jurisdictions of the forensic accounting practice; and the regulatory role to protect the boundaries of professional work from competitors; and, the internal and external disturbances that have shaped the forensic accounting practice. Those disturbances result in professional rivalry, competition and eventual jurisdictional settlement, areas also investigated in this study. Although recent studies in the field of forensic accounting have focused on issues relating to the emergence of its practice, much literature remains silent with respect to the role of the accounting profession in the professionalisation process of forensic accounting, which has lead to the emergence and recent boom of this area of expertise. Furthermore, the role of social actors such as the big four accounting firms in the professionalisation process is invisible in the accounting literature. This is because very little mainstream accounting research focuses on the social construction of the accounting practice. Therefore, the contribution of this study is two-fold. First, it adds to the rare forensic accounting literature by providing in-depth account of the features and functions of forensic accounting. Second, it provides empirical evidence on the role of the accounting profession in the professionalisation process of forensic accounting. The author has, therefore, employed an interpretive approach that considers the political and social factors influencing the current outlook of the forensic accounting practice. A multiple case study design was employed, where three subjects of investigation were chosen, namely Big Four firms, specialist forensic investigative firms, and accounting professional bodies. Employing a mix of qualitative and quantitative approaches; interviews, documentation analysis and postal-survey questionnaires were chosen as the appropriate methods for an in-depth investigation of the development of forensic accounting. The findings of this study highlight that forensic accounting professionalisation has been greatly influenced by the subjective interpretation of the accounting profession, where powerful legitimacy and marketing strategies have been employed by the accounting profession to legitimise the forensic accounting practice. The accounting profession was able to claim, strengthen and extend its legitimacy in almost all practice areas of forensic accounting, thus becoming the main provider of forensic accounting services. The study finds that state regulation, the technological explosion, globalisation and the economic downturn have all contributed to the accounting profession success in claiming such status. The study further finds that intra-professional competition plays a major role in shaping the dynamics of the forensic accounting practice. Such competition, together with the relative lack of regulating standards within the forensic accounting practice, had shed light on a new form of professionalisation, where the big four accounting firms had a major role in regulating the market. This latter point is of importance to policy makers and standard setters.

This study views conflict of interests in professional accounting firms through the lens of behavioural risk management. The research problem driving this study is the accounting professionals’ deviant decision-making behaviour due to conflict of interests. Extant literature suggests that the prevalence of said problem is attributable to the ineffective management of conflicting interests – the existing procedures do not account, sufficiently, for the accounting professionals’ independence in fact. This research builds, primarily, on the work of Moore, Tanlu and Bazerman (2010) and Guiral, Rodgers, Ruiz and Gonzalo (2010). Although they attempted to address the professionals’ independence in fact by examining the psychological and cognitive impacts of conflict of interests, there still is a lack of understanding about the interaction of conflict of interests with decision-making. Consequently, there have been repeated calls for more research to understand how conflict of interests operates at the level of an individual accounting professional. Accordingly, this study is aimed at examining the process through which conflict of interests affects accounting professionals’ decision-making behaviour. To achieve this aim, a cognitive approach has been developed through integration of social cognitive theory and throughput model of decision-making. This research adopts a quantitative approach to investigation and the data have been collected by conducting a quasi-experiment with 105 professionals from the Big Four accounting firms in the UK. Likert-type items/scales are used to record data as the professionals’ self-reports on their perceptions and behaviour. Partial Least Squares-Path Analysis has been implemented for data analysis and hypotheses testing. Following the post-positivists stance, the concern is ‘failure to reject’ a hypothesis rather than ‘proving’ it. The empirical results provide that the professionals’ positive outcome expectancy of compliant decision-making (POE), perceived difficulty in making compliant decisions (PD) and ethical judgements (EJ) play mediating role in the relationship between conflict of interests (CoI) and the likelihood of deviant decision-making behaviour (DD). The low POE, high PD and less EJ are evidenced to be the situational cognitive predictors and the high propensity to morally disengage (PMD) the dispositional cognitive predictor of DD. Decision-making behaviour is evidenced to be prone to bias due to the significant role of POE and PD in the decision-making process. These results suggest that the process through which CoI affects accounting professionals’ decision-making behaviour is governed through the agency of their POE, PD and EJ. During this process, CoI plays biasing role and due to which the deviations from compliant behaviour might occur even undesirably. Therefore, DD is high in case of the professionals who perceive the negative outcomes of compliant decision-making to outweigh its positive outcomes, perceive high difficulty in making the given compliant decision, form a judgement that deviant decision choice is the most ethical and have high propensity of considering unethical behaviour as acceptable. Thus, in the events of conflict of interests, the likelihood of deviant behaviour can be reduced through encouraging amongst professionals the high POE, low PD, high EJ and low PMD. This study holds significance since it provides the much-needed empirical evidence for the role of accounting professionals’ cognitive processes in the relationship between conflict of interests and their decision-making behaviour. The cognitive approach adopted in this study provides a novel perspective for investigating the decision-making process. Moreover, the robust experiment employed for data collection adds to the extant research that lacks in experimental scenarios for addressing conflict of interests. Since all the insights revealed by this study’s results are relevant to the professionals’ state of mind, these insights can be combined to strengthen their independence in fact – to this end, I have proposed a behavioural framework to complement the accounting firms’ current efforts for managing conflict of interests. On a practical level, the professional accounting firms, the accounting professionals, the regulators and the other relevant professions can use this study’s findings and the new knowledge for making better decisions and to improve their policies.