Under the going-concern concept, an entity is assumed to be a going concern when it is able and willing to continue operations in the foreseeable future. Although substantial agreement exists as to the meaning and role of the going-concern concept, it is difficult to make going-concern assessments in the course of an audit. In particular, existing auditing guidelines contained in SAS No. 34 are inadequate and existing going-concern prediction models are flawed. In view of this, the objective of the dissertation is to construct a going-concern prediction model (hereafter called the Koh model) that is based upon improved statistical techniques and methodology. A sample of 165 companies that filed for bankruptcy during the period 1980 to 1985 and a matched sample of 165 non-bankrupt companies are used to construct and test the Koh model. Following the lead taken by the proposed SAS on going-concern assessments, a non-going concern is operationalized as a bankrupt company. For each of the sample companies, six financial ratios as specified by the proposed theory of bankruptcy are obtained. Probit analysis with the weighted exogenous sample maximum likelihood procedure is used to estimate the coefficients of the Koh model. Using the Lachenbruch U method, the hold-out accuracy rates of the Koh model are computed. They are 85.45% for non-going concerns, 100.00% for going concerns, and 99.91% overall. With these accuracy rates, the Koh model compares favorably with other going-concern prediction models suggested in the literature and the auditors. The effects of misclassification costs of Type I and Type II errors on the Koh model are also considered. It is found that the optimal cut-off probability for the Koh model is very insensitive to varying relative misclassification costs. Coupled with its high predictive ability and stability, the Koh model can be an effective prediction model, analytical tool, and defensive device for auditors. Further, the methodology developed and employed in the dissertation can contribute to the current state-of-the-art in constructing prediction models such as going-concern or bankruptcy prediction models, takeover/acquisition prediction models, and loan default prediction models. / Ph. D.

Sammanfattning   Titel: Granskning av hållbarhetsredovisning - Granskares kunskap för att erhålla tillförlitlighet i granskningsprocessen   Nivå: Examensarbete på Grundnivå (kandidatexamen) i ämnet företagsekonomi   Författare: Sofia Eriksson och Pauline Ervenhag   Handledare: Tomas Källqvist och Pär Vilhelmson   Datum: 2019 – Juni   Syfte: Enligt tidigare forskning tenderar granskare av hållbarhetsredovisning att sakna tillräckligt med kunskap och utbildning för att bedöma redovisningens tillförlitlighet. Hållbarhetsredovisning är en del av revisionen som anses vara en svår uppgift, och därför är kunskap inom detta område viktigt. Syftet med studien var att öka förståelsen för vilken kunskap granskare av hållbarhetsredovisningar saknar vid granskningsprocessen för att erhålla tillförlitlighet.   Metod: För att kunna belysa och besvara studiens syfte genomfördes en studie baserad på kvalitativ metod. Avsikten var att skapa ökad förståelse och inblick i vilken kunskap granskare av hållbarhetsredovisning behöver och saknar. Studien utgick från ett abduktivt synsätt där den teoretiska referensramen och empirisk datainsamling har analyserats i samverkan med varandra. Uppsatsens syfte undersöktes bland annat med hjälp av semistrukturerade intervjuer med både bestyrkande-, granskande- och finansiella revisorer samt respondenter från FAR.   Resultat & slutsats: Studiens resultat visade att erfarenhet är den centrala källan till kunskap inom granskningsprocessen av hållbarhetsredovisningens tillförlitlighet. Ett exempel som belyser detta är att erfarenhet och lärandet av varandra har haft en inverkan på granskare under deras process att granska hållbarhetsredovisningar.   Examensarbetets bidrag: Vi har i denna studie kommit fram till två teoretiska bidrag då vi fann skillnader mellan vår teoretiska referensram och vårt empiriska material gällande granskares kunskap. Studiens första teoretiska bidrag visade att kunskap inte ses som en saknad vidare att erfarenhet är en viktig faktor för granskare under granskningsprocessen av hållbarhetsredovisningar. Detta relateras till praktisk klokhet och tacit knowledge eftersom kunskap kan uppkomma genom erfarenhet och lärandet av varandra. Studiens andra teoretiska bidrag visade att det finns en bakomliggande efterfrågan på utbildningar inom hållbarhetsredovisningens delar.   Förslag till vidare forskning: Vi finner ett fortsatt intresse av att se hur granskares arbetslivserfarenheter påverkar synen på kunskap utifrån erfarenhet. Därför är ett förslag till vidare forskning att genomföra en liknande studie med fler respondenter där hänsyn tas till arbetslivserfarenhet för att bidra till nya infallsvinklar.

Diploma thesis focuses on internal audit and conditions for this job. At the beginning is some history and development of internal audit. Another part deals with internal audit, relation to the external audit and internal control systems. Other passage look into processing of internal audit and preparing of internal auditor's report. There are some requirements for person of internal auditor and his/her role in company. A part of thesis is devoted to Institute of internal auditors, membership terms and European confederation for institutes of internal auditors. Other part focuses on risks and frauds join with profession of internal auditors. Practical part deals with real situation of internal audit profession in private enterprise and banking sector.

LL.D. / Please refer to full text to view abstract

by Lam Man-ho, Leung Yee-mei, Annie. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1995. / Includes bibliographical references (leaves 68-70). / ABSTRACT --- p.ii / TABLE OF CONTENTS --- p.iii / LIST OF TABLES --- p.v / ACKNOWLEDGEMENT --- p.vi / Chapter / Chapter I. --- INTRODUCTION --- p.1 / Objective of Study --- p.2 / Scope --- p.3 / Limitations --- p.3 / Chapter II. --- THE DEVELOPMENT OF INTERNAL AUDITING --- p.5 / "Nature, Roles and Value" --- p.5 / Historical Development --- p.7 / Audit Committee --- p.8 / Evolution of Audit Approaches --- p.10 / Implications of Behavioural Issues --- p.12 / Chapter III. --- CONCEPTUAL FRAMEWORK --- p.13 / The Need for Behaviouralism in Internal Auditing --- p.13 / Job Satisfaction --- p.14 / Stress --- p.15 / Sources of Stress --- p.15 / Organizational Factors --- p.16 / Organizational Status --- p.16 / Relations with Audit Committee --- p.17 / Career Prospect --- p.17 / Departmental Support --- p.17 / Task and Role Factors --- p.18 / Audit Scope --- p.19 / Internal Auditor Role --- p.21 / Interpersonal Factors --- p.22 / Internal Auditor-Auditee Relations --- p.23 / Working Relationship with External Auditors --- p.27 / Chapter IV. --- METHODOLOGY AND RESULTS --- p.29 / Methodology --- p.29 / Structure of Questionnaire --- p.29 / Organizational Factors on Job Satisfaction --- p.30 / Organizational Status --- p.30 / Audit Committee --- p.34 / Career Prospect --- p.37 / Departmental Support --- p.37 / Task and Role Factors on Job Satisfaction --- p.39 / Audit Scope --- p.39 / Internal Auditor Roles --- p.42 / Interpersonal Factors on Job Satisfaction --- p.43 / Internal Auditor-auditee Relations --- p.46 / Relations with External Auditors --- p.49 / Chapter V. --- CONCLUSIONS AND RECOMMENDATIONS --- p.51 / Summary and Conclusions --- p.52 / Organizational Factors --- p.52 / Task and Role Factors --- p.53 / Interpersonal Factors --- p.53 / Recommendations --- p.54 / APPENDICES / Chapter I. --- The Structure of Hong Kong Banking Industry --- p.60 / Chapter II. --- Survey Questionnaire Sample --- p.63 / BIBLIOGRAPHY --- p.68

This final thesis is focusing on internal audit. The objective of the thesis is to show the process of internal audit in practice and to assess whether the internal audit is effective and serves its purpose. I am describing the process of internal audit on a company providing services. Particular steps of this internal audit are being described in this thesis while the final report of the internal auditor is included. The report describes failures which occurred and the procedure of their resolution. I came to the conclusion that internal audit helps the organization to reduce the failures and mistakes risen up by ignorance, lack of attention or lack of knowledge. Following the results of the thesis I would recommend the companies not doing any internal audit to do so. Performing of the internal audit on the regular basis will allow achieving higher control over the activities and processes. Internal audit helps to gain and renew the quality certifications which are helping to become more competitive at the market.

本研究利用問卷調查內部稽核人員與外部審計人員兩者對於內部稽核功能之認知、雙方互動之情形、以及內部稽核功能與審計公費之關係。研究結果發現外部審計人員對於國內內部稽核功能能否有效發揮，仍有所保留，特別是在獨立性的部分，但對於內部稽核人員的專業能力則表示肯定。另外，大多數的填答者皆有與對方互動之經驗，但互動的程度並不高，以「偶而會」及「偶而詢問」為主。縱使互動程度不高，但是雙方皆認為互動對於外部查核工作或內部稽核工作是有助益的。此外，大多數的外部審計人員認為，內部稽核功能的好壞與審計公費有一定的關係存在，但其影響的比例以5%以下居多，這可能也是間接造成雙方互動不密切的重要因素之一。 / This thesis uses questionnaires to examine the external auditors’ perceptions of the internal auditing function, the level of co-operation between the internal and external auditors, and the relationship between internal audit function and external audit fees. The empirical findings indicate that external auditors expressed concern about the internal auditing function, independence especially. And the questionnaire responses show the lack of a close relationship between the internal and external auditors. They just occasionally co-operate with each other, but they consider that it is helpful to them. In addition, most external auditors are convinced of the existence of a direct link between internal audit function and external audit fees. But the percentage of external audit fee affected by internal audit function is below 5 percent, this may be one of the reasons why they lack a close relationship between each other.

Many external parties such as investors, creditors, and regulatory agencies, use a company’s financial statements in their decision-making. In doing so, they rely on audit opinions on whether financial statements are fairly stated. However, evidence suggests that there are factors in the audit environment that influence auditor judgments. For example, nondiagnostic client information dilutes auditor judgments when compared to judgments based on diagnostic information alone, especially for less experienced auditors (Hackenbrack 1992; Hoffman and Patton 1997; Glover 1994; Shelton 1999). High time pressure conditions mitigate this effect by refocusing auditor attention toward relevant client information, therefore reducing the impact of nondiagnostic information (Glover 1994, 1997). This research study examines other common audit environment factors to determine if they too influence audit judgment results. An online questionnaire of 149 auditors, CPAs and other accounting professionals indicate that the inclusion of nondiagnostic client information results in a significant change in auditor judgments. The direction of this change follows a theorized pattern; risk assessments that were initially high are reduced, while those that were initially low are increased. Significance was not consistently found for a workload and PCAOB effect on auditor judgment. However, a comparison of the absolute value of dilution effect means across conditions reveals some trending for the proposed unwanted effect of high workload, and the beneficial effect of PCAOB guidance. These results have important implications for auditing research and practice. It extends previous archival research on workload effects and uses a unique questionnaire design to reexamine workload pressures in a behavioral setting. The results of hypothesis testing on workload pressure and PCAOB guidance, although lacking consistent statistical significance; exhibit trends that agree with proposed theoretical relationships. Tests on the effects of nondiagnostic information show strong statistical support for previous studies in the area of psychology and audit. This study’s greatest contribution suggests that audit pressures do not produce equivalent effects on auditor judgment; time pressure improves audit judgment, while workload pressure does not (Glover 1994, 1997). These results can be explained by examining the relationship between stress and audit judgment performance (Choo 1995, Yerkes and Dodson 1908). Different types and different degrees of audit pressures may correspond to different levels of audit pressure. Low to moderate levels of audit pressure, such as the level of time pressure used in Glover’s (1994, 1997) study improve audit performance. Higher audit pressures, such as high workload during an auditor’s busy season, may lower audit performance.

Bakgrund: Inom räkenskapsrevisionen är förtroendevalda revisorer ansvariga för granskningen och biträds i sin tur av sakkunniga revisorer. Kombinationen av revisorerna ska säkerställa en revision som är både demokratiskt förankrad och professionellt utförd. De förtroendevalda revisorernas oberoende har dock ifrågasatts och kritiserats, det anses att de har egna politiska intressen att skydda och kan påverka räkenskaperna för att på så sätt kunna förmedla en viss bild av resultat och ekonomisk ställning. Det kan därför anses vara väsentligt att den kritik som sakkunniga revisorer riktar i revisionsrapporterna också beaktas i revisionsberättelsen. Syfte: Syftet med studien är att förklara vilka externa faktorer som påverkar huruvida förtroendevalda revisorer beaktar sakkunniga revisorers kritik i revisionsberättelsen. Metod: Studien utgår från ett deduktivt tillvägagångssätt där hypoteser testas för att kunna förklara faktorer som påverkar de förtroendevalda revisorernas beaktande av de sakkunniga revisorernas kritik i revisionsberättelsen. Studien är en kvantitativ tvärsnittsstudie baserad på revisionsrapporter samt revisionsberättelser från svenska kommuner avseende 2019. Slutsats: Studien indikerar att förtroendevalda revisorers beaktande av sakkunniga revisorers kritik i revisionsberättelsen påverkas av vald revisionsbyrå. Vidare indikerar studien på att sakkunniga revisorers formella kompetens inte påverkar beaktande av kritik. Slutligen visar studiens empiriska resultat att kommunens finansiella styrka påverkar negativt huruvida förtroendevalda revisorer beaktar sakkunniga revisorers kritik i revisionsberättelsen. / Background: In the financial audit, politically appointed auditors are responsible for the audit. Politically appointed auditors are assisted by expert auditors, the combination of the auditors shall ensure an audit that is both democratically based and professionally performed. However, the independence of the politically appointed auditors has been questioned and criticized. It is considered that the politically appointed auditors have their own political interests to protect and can influence the accounts to be able to convey a certain picture of the results and financial position. It can therefore be considered essential that the criticisms given by the expert auditors in the audit memorandum are also considered in the audit report. Purpose: The aim of this study is to explain the external factors that affect whether politically appointed auditors consider expert auditors' criticism in the audit report. Method: The study is based on a deductive approach where hypotheses are tested to be able to explain factors that affect the politically appointed auditors' consideration of the expert auditors' criticism in the audit report. The study is a quantitative cross-sectional study based on audit memorandum and audit reports from Swedish municipalities regarding 2019. Conclusion: The study indicates that the elected auditors' consideration of expert auditors' criticisms in the auditor's report is affected by the chosen audit firm, while the consideration is not affected by the expert competence of the expert auditors. Furthermore, the elected auditors' consideration of the expert auditors' criticism in the audit report is negatively affected by the municipality's financial strength.

Informationsteknik är ett expanderande område som utvecklas i takt med den teknologiska utvecklingen. Allt eftersom samhället blir mer digitaliserat har det en betydande påverkan på den finansiella revisorn och dess revisionsarbete. Det finns tidigare forskningar och diskussioner kring hur viktigt IT-kompetens är för den finansiella revisorn på grund av den växande IT-miljön. Syftet med denna studie var att undersöka om den finansiella revisorn har tillräckligt med IT-kompetens för att granska affärssystem, förstå om eller när den finansiella revisorn tar hjälp av en IT-revisor samt undersöka vilka förväntningar som finns på finansiella revisorer. För att besvara studiens syfte och frågeställningar har en kvalitativ forskningsmetod med semistrukturerade intervjuer genomförts. Respondenterna som deltog i undersökningen var revisorer från olika revisionsbyråer samt en VD, vilket la grunden för den empiriska data som därefter analyserades med hjälp av studiens teoretiska referensram. De centrala slutsatserna som tagits fram i studien är att den finansiella revisorn anser sig själva ha tillräckligt med IT-kompetens för att utföra deras arbetsuppgifter och för att kunna utföra granskningar av ett affärssystem. Studien påvisar att om en finansiell revisor ska kunna göra granskningar av ett affärssystem krävs det grundläggande kunskaper om hur affärssystem fungerar. Studien visar även att en finansiell revisor kan ta hjälp IT-revisorer när deras kunskaper inte är tillräckliga. Det förekommer främst vid granskning av komplexa och specialanpassade affärssystem. Till sist visar studiens resultat att förväntningarna som finns på finansiella revisorer överensstämmer med kundens förväntningar. / Information technology is an expanding area that is evolving in step with technological development. As the society becomes more digital, it has a significant impact on the financial auditor and its audit work. There is previous research and discussions about how important IT competence is for the financial auditor due to the growing IT environment. The purpose of this study was to investigate whether the financial auditor has sufficient IT competence to audit information systems, to understand if or when the financial auditor engages the help of an IT auditor and examine the expectations that exist for the financial auditors. To answer the studies purpose and the formulated questions, a qualitative research method with semi-structured interviews was conducted. The respondents who participated in the study were auditors from various auditing firms and a CEO, they formed the empirical data which were then analyzed by using the studies theoretical framework. The key conclusions in the study are that the financial auditor considers themselves to have sufficient IT competence to perform their tasks and to be able to audit an information system. The study indicates that basic knowledge of how information systems work is required from a financial auditor to perform an audit of the system. The study also indicates that a financial auditor can engage the help of IT auditors when their knowledge is not sufficient. It appears mainly in audits of complex and special adapted information systems. Lastly the result of the study shows that the expectation of the financial auditor is in line with the customer’s expectations.