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In this dissertation, I examine the effects of regulatory changes that affect the auditor's loss function on investors' perceptions of audit effectiveness. Specifically, I examine two changes intended (1) to improve audit efficiency and (2) to reduce auditor liability exposure. The first regulatory change, which was recently enacted, is the replacement of Auditing Standard 2 (AS2) with Auditing Standard 5 (AS5). The second regulatory change, which is currently a hypothetical change, is the passage of litigation reform aimed at limiting the auditor's liability exposure following an alleged audit failure. I examine perceived audit effectiveness rather than actual effectiveness because actual audit effectiveness is unobservable by investors. In an experiment using 101 MBA students as proxies for individual investors, I find that both changes are perceived by investors as reducing the amount of testing performed by the auditor when performing the internal control audit. I also find that both regulatory changes negatively affect investors' perceptions of audit effectiveness. Following the change in the auditing standard, experienced and inexperienced investors predict opposite stock price movement and, as a result, make different investment allocation decisions. In performing supplemental analyses, I find significant gender differences in predicted future stock prices, but not in perceptions of audit effectiveness or in perceptions of internal control quality.

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Audit committees are an integral part of good corporate governance and their establishment strengthens the credibility of governments. As a foundation of good governance, audit committees are positioned to provide an objective assessment of whether or not public resources are responsibly and effectively managed. They also promote accountability and integrity, as well as improvement in the operations of governments and municipalities. The establishment of audit committees in the local sphere of government came with the advent of modernisation in terms of the budget and financial management, which was intended to strengthen accountability. The requirement for effective utilisation of resources by local government is critical for the support and empowerment of local communities and delivery of effective services. The audit committee framework for local government, which is provided by the Municipal Finance Management Act (56 of 2003), is underpinned by principles of good governance and accountability, which promote the effective functioning of audit committees. However, there are perceptions and arguments advanced in the literature regarding the effectiveness of audit committees as an accountability structure. This was brought about by the recurring reported incidences of the failure of businesses, which took place despite the existence of rules and laws regulating the function. As a result, trends of leading best practices were established, which enhanced audit committees' performance and were adopted as a proxy for the measurement of audit committees’ effectiveness. The focus of the study is on validating the perception by management that the audit committee of the Westonaria Local Municipality (WLM) is effective in the execution of its oversight role. A literature study on the functioning of audit committees have been undertaken, official municipal documents were analysed and a questionnaire has been developed and utilised as a means for gathering data, in order to prove the hypothesis to be either true or false. The areas investigated in this study demonstrate that the audit committee of WLM is generally effective in the execution of its oversight function. The findings of the study also identified certain areas in the audit function which require the attention of both management and the audit committee of the municipality. More specifically, the observations made in the study include the following: (i) that audit committee members are not provided with the agendas and reports in sufficient time for them to adequately prepare for meetings; (ii) that a productive relationship between the audit committee and the management of the local government has to be maintained; (iii) that there is a lack of informal meetings between the audit committee and the external and internal auditors; (iv) that no appropriate training of the audit committee on existing and potential audit risks in local government is in place; (v) that there is an absence of continuous learning programmes for the members of the audit committee; and (vi) that audit committee members do not evaluate themselves in terms of their level of knowledge regarding the functioning and activities of their audit committee. Attending to these aspects, as identified through this study, will further improve the audit committee’s activities in the WLM. These aspects are therefore not viewed in a negative light, but are rather regarded as a positive venture to be addressed by municipal management and the audit committee, in order to improve the functioning of the audit committee. These aspects should therefore be added to the many positives aspects that are identified concerning the WLM audit committee, as discussed in this study. / M Public Administration (Development and Management), North-West University, Potchefstroom Campus, 2014

Although auditors engage in considerable social interaction (Gibbins & Mason, 1988; Solomon, 1987), little is known about how social interaction influences an auditor's moral reasoning process. In order to address this gap, this study used an experiment to examine the effect of social influence on 288 auditors' moral reasoning on realistic moral dilemmas. The results of this study indicate that social interaction influences the moral reasoning of auditors. Auditors' level of prescriptive reasoning appears to increase after engaging in discussion of a realistic moral dilemma, particularly for those which discuss dilemmas with others at high levels of moral development, while auditors' level of deliberative reasoning appears to decrease after engaging in discussion of a realistic moral dilemma. At a practical level, these findings suggest that auditors should be encouraged to prescriptively discuss moral dilemmas with others of high levels of moral development as this tends to result in the use of more principled moral reasoning. In contrast, auditors should avoid deliberative discussion of moral dilemmas, as this tends to result in the use of less principled moral reasoning than would be used in the absence of discussion.

The East Asian financial crisis and the failures of Enron and Worldcom in the United States of America have put corporate governance and risk management in the forefront of the corporate scenes. McKinsey's global investor opinion survey on corporate governance carried out in 2000 indicated that majority of investors were prepared to pay a premium for companies exhibiting high governance standards. Central to corporate governance is risk management as can be seen from the various codes on corporate governance, namely, Malaysian Code on Corporate Governance and the United Kingdom's Combined Code on Corporate Governance. / Thesis (DBA(DoctorateofBusinessAdministration))--University of South Australia, 2005.

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There has long been concern that rating the thermal performance of buildings on the basis of predicted normalized energy requirement (MJ/m2) is inappropriate for achieving overall energy efficient design of houses, mainly due to the inability of such schemes to deal with the evaluation of passive architectural design in the form of free running buildings. This study, investigating the shortcomings in the current rating schemes, hypothesizes that the main reason for that inability is due to significant differences between efficient design for free running and conditioned houses. It also suggests that a multiple occupancy scenario, involving variable occupation times and zones, is an important parameter for improving the accuracy of any building evaluation system. The study aims to propose a new method for House Rating Schemes in which the efficiency of a house design will be evaluated with reference to its thermal performance in both free running and conditioned operation modes. By attributing more value to the performance of houses in the free running than the conditioned operation, it is assumed that policy objectives for reducing energy demand for space heating and cooling in the residential building sector are more likely to be achieved. Simulation was used to compare the predicted thermal performances of houses in free running and conditioned operation modes for the moderate climates of Sydney and Canberra. Parametric sensitivity analysis and multivariate regression analysis have been employed and point to the following results. The reliability of a free running rating scheme, in terms of addressing energy efficient aspects, as compared to the current energy based rating schemes, is demonstrated. The research illustrates significant differences between efficient design for conditioned houses and for free running houses. The findings strongly suggest the necessity of developing a new regulatory framework for reducing energy demand in the housing sector. Utilizing these findings, an aggregation of two rating systems for the purpose of creating a new house rating framework has been developed. It is assumed that this research approach is likely to deliver significant benefits in terms of reduction in energy demand and increased sustainability, if it is employed as a basis for House Ratings Schemes.

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