Recent international regulatory reforms have put more responsibility on auditors for detecting financial statement fraud. The recent changes to international auditing standards make it compulsory for members of the audit team to discuss the susceptibility of an entity to fraudulent misstatements at the audit planning stage. These standards do not stipulate the format of these group discussions, nor provide any explicit guidelines on how to carry out effective discussions. This dissertation reports on two studies that examine different discussion techniques which could lead to a better identification of audit fraud risks at the audit planning stage, and may in turn help in fraud detection. Study One tests whether two enhanced forms of interacting group processes (brainstorming guidelines and premortem instructions) have advantages over an interacting group (without brainstorming guidelines). The brainstorming group is provided with Osborn???s (1957) original brainstorming guidelines. Premortem is a variation of the mental simulation idea developed by Klein (1999) invoking a scenario where participants actively search for a flaw in their plans. The auditors in both the brainstorming group treatment and the premortem group treatment generated a larger number of potential frauds than the interacting group treatment. These results were robust across a range of dependent variables used to measure quantity and quality of fraud items. The results also show that more premortem groups listed rare frauds compared to the other two group structures. There was a negative relationship between the number of items listed and the assessed likelihood of fraud. Participants who estimated a higher likelihood of fraud provided a more complete mental simulation of how a fraud could be perpetrated. Study Two focuses on the individual brainstorming phase which may occur before the group brainstorming session. It examines whether giving additional brainstorming guidelines and task decomposing (in addition to the original brainstorming guidelines), improve performance compared to having only the original brainstorming guidelines. Both the additional brainstorming guidelines and the task decomposition treatments generated a larger number of potential frauds than the brainstorming guidelines treatment. Task decomposition helps participants focus equally on all task subcategories leading to a more diverse set of ideas.

Recent international regulatory reforms have put more responsibility on auditors for detecting financial statement fraud. The recent changes to international auditing standards make it compulsory for members of the audit team to discuss the susceptibility of an entity to fraudulent misstatements at the audit planning stage. These standards do not stipulate the format of these group discussions, nor provide any explicit guidelines on how to carry out effective discussions. This dissertation reports on two studies that examine different discussion techniques which could lead to a better identification of audit fraud risks at the audit planning stage, and may in turn help in fraud detection. Study One tests whether two enhanced forms of interacting group processes (brainstorming guidelines and premortem instructions) have advantages over an interacting group (without brainstorming guidelines). The brainstorming group is provided with Osborn???s (1957) original brainstorming guidelines. Premortem is a variation of the mental simulation idea developed by Klein (1999) invoking a scenario where participants actively search for a flaw in their plans. The auditors in both the brainstorming group treatment and the premortem group treatment generated a larger number of potential frauds than the interacting group treatment. These results were robust across a range of dependent variables used to measure quantity and quality of fraud items. The results also show that more premortem groups listed rare frauds compared to the other two group structures. There was a negative relationship between the number of items listed and the assessed likelihood of fraud. Participants who estimated a higher likelihood of fraud provided a more complete mental simulation of how a fraud could be perpetrated. Study Two focuses on the individual brainstorming phase which may occur before the group brainstorming session. It examines whether giving additional brainstorming guidelines and task decomposing (in addition to the original brainstorming guidelines), improve performance compared to having only the original brainstorming guidelines. Both the additional brainstorming guidelines and the task decomposition treatments generated a larger number of potential frauds than the brainstorming guidelines treatment. Task decomposition helps participants focus equally on all task subcategories leading to a more diverse set of ideas.

This study was conducted to generate an in-depth understanding of key internal audit function (IAF) customers’ perceptions of the work performed by the Department of National Treasury’s IAF. This study was further intended to address the absence of any qualitative study of IAF customers’ experiences and expectations, and their perceptions of the challenges the IAF faces. The study had five research objectives, namely: to identify the role of the IAF in the public sector in relation to its customers; to discuss strategies to meet the expectations of IAF customers; to determine the experiences of the identified key IAF customers of the work performed by the IAF in the National Treasury; to determine the expectations of the identified key IAF customers of the IAF in the National Treasury, and to ascertain what the identified key IAF customers perceive to be challenges facing the IAF in the National Treasury. In order to achieve the research objectives, the study implemented a qualitative research design using the National Treasury as a case study. Data were collected through semi-structured interviews with participants selected from the key IAF customers’ categories (comprising the audit committee (AC), executive and senior managers, programme and operating managers, and external auditors). Three main themes emerged from the identified key customers’ views. These were (1) Experiences, which revealed that the participants were reasonably satisfied with the work of the IAF in the National Treasury. Participants from the AC, the executive and senior managers, and the Auditor General of South Africa (AGSA) felt that the IAF does add value, while the programme and operating managers participants indicated that the IAF does not demonstrate a holistic view when it conducts evaluations. (2) Expectations, the AC participants expected the AGSA to be able to rely on the work of the IAF, that the IAF should maintain a findings register, and that it should demonstrate IT skills. Executive and senior managers participants expected the IAF to add value to the strategic direction of the National Treasury. Programme and operating managers participants expected the IAF to be open and consultative, to set realistic audit plans, to provide regular feedback, and to demonstrate knowledge of the business. The AGSA participants called for the IAF to demonstrate technical competencies as well as independence and objectivity. (3) Challenges, participants perceived the IAF’s lack of knowledge of the business, the limited reliance placed on its work by the AGSA, the lack of audit action monitoring processes and the lack of management support for the IAF as its biggest challenges. This study could benefit the National Treasury’s IAF by helping it to understand the changing needs and expectations of its customers, and to identify areas for improvement. It may also benefit professional audit bodies and the newly-established National School of Government by providing them with insights into the training needs of internal auditors, and the necessity of providing continuing professional educational programmes. / Auditing / MCom (Auditing)

This study was conducted to generate an in-depth understanding of key internal audit function (IAF) customers’ perceptions of the work performed by the Department of National Treasury’s IAF. This study was further intended to address the absence of any qualitative study of IAF customers’ experiences and expectations, and their perceptions of the challenges the IAF faces. The study had five research objectives, namely: to identify the role of the IAF in the public sector in relation to its customers; to discuss strategies to meet the expectations of IAF customers; to determine the experiences of the identified key IAF customers of the work performed by the IAF in the National Treasury; to determine the expectations of the identified key IAF customers of the IAF in the National Treasury, and to ascertain what the identified key IAF customers perceive to be challenges facing the IAF in the National Treasury. In order to achieve the research objectives, the study implemented a qualitative research design using the National Treasury as a case study. Data were collected through semi-structured interviews with participants selected from the key IAF customers’ categories (comprising the audit committee (AC), executive and senior managers, programme and operating managers, and external auditors). Three main themes emerged from the identified key customers’ views. These were (1) Experiences, which revealed that the participants were reasonably satisfied with the work of the IAF in the National Treasury. Participants from the AC, the executive and senior managers, and the Auditor General of South Africa (AGSA) felt that the IAF does add value, while the programme and operating managers participants indicated that the IAF does not demonstrate a holistic view when it conducts evaluations. (2) Expectations, the AC participants expected the AGSA to be able to rely on the work of the IAF, that the IAF should maintain a findings register, and that it should demonstrate IT skills. Executive and senior managers participants expected the IAF to add value to the strategic direction of the National Treasury. Programme and operating managers participants expected the IAF to be open and consultative, to set realistic audit plans, to provide regular feedback, and to demonstrate knowledge of the business. The AGSA participants called for the IAF to demonstrate technical competencies as well as independence and objectivity. (3) Challenges, participants perceived the IAF’s lack of knowledge of the business, the limited reliance placed on its work by the AGSA, the lack of audit action monitoring processes and the lack of management support for the IAF as its biggest challenges. This study could benefit the National Treasury’s IAF by helping it to understand the changing needs and expectations of its customers, and to identify areas for improvement. It may also benefit professional audit bodies and the newly-established National School of Government by providing them with insights into the training needs of internal auditors, and the necessity of providing continuing professional educational programmes. / Auditing / MCom (Auditing)

This study explores the flawed procurement and delivery of Learner Teacher Support Materials (LTSM) in East London district at public secondary schools in the Eastern Cape province. Poor management of the procurement of LTSM has the result that some schools in the country have limited access to LTSM because of late delivery, non-delivery, incorrect and, or delivery shortages. These problems have contributed to under-achievement in the affected schools and in turn undermine the learners’ constitutional rights and educational aims and goals. Like many other provinces, the Eastern Cape also encountered difficulties with the procurement and delivery of textbooks to various public schools. To investigate the problem, a qualitative and exploratory study was carried out. The data were collected from a sample of 19 participants involved in the three levels of the procurement process; that is, district officials, school principals and the provincial head office officials. The researcher conducted face-to-face interviews using open-ended questions. The research results showed that although the procurement process of LTSM is centralised at the head office level, the other two levels, namely the district office and the school levels, play a significant part. While these levels play an important role in determining and collating the textbook needs, they require additional communication processes and systems to be in place to avoid prolonged timeframes and follow ups that bring about delays of the overall procurement process. Between communication of the relevant guidelines, and collating and submitting book needs information, delays happen along the way at one or more levels and these ultimately lead to either late procurement, late or non-delivery of books to the relevant schools. The study showed that although there are rules, regulations and various policies that serve as guidelines in the procurement process, the actual implementation and monitoring is flawed. The lack of coherence promotes mistrust and conflict between the relevant stakeholders, which in turn brings about minimal consultation on changes relating to effective management processes during procurement and distribution of LTSM. The study recommends changes that are needed to achieve effective management to alleviate problems encountered during the procurement and distribution of LTSM in the East London district public secondary schools / Entrepreneurship, Supply Chain, Transport, Tourism and Logistics Management / M. Com. (Logistics)