In response to investor and public concerns about harm to the environment, companies are increasingly disclosing environmental information. To enhance the quality of corporate environmental disclosures in a largely voluntary context, various stakeholders are also demanding independent assurance. This study uses a stakeholder-agency theoretical perspective to examine whether the quality of voluntary environmental disclosures is enhanced when assured. This study also examines the difference in the quality of voluntary environmental disclosures when assurance is provided by either professional accountant assurers or private consultants. Our sample comprises listed companies voluntarily disclosing environmental information in stand-alone reports, annual reports, and websites. We use an index based upon the Global Reporting Initiative (GRI) to measure the quality of company environmental reporting. Results of this matched pairs study show that the quality of voluntary environmental disclosures scores significantly higher for assured companies than unassured companies. For assured companies, the quality is no different when assured by accountants or consultants. Additional analysis provides preliminary evidence that experience improves the quality of environmental disclosures.

No abstract

In recent years, the importance of good corporate governance has received significant public and regulatory attention. A crucial part of an entity's corporate governance is its internal audit function. At the same time, there has been significant public concern about the level of fraud within organizations. The purpose of this study is to assess whether organizations with an internal audit function are more likely to detect and self-report fraud than those without. In this study, we use a unique self-reported measure of misappropriation of assets fraud for the first time. The fraud data are from the 2004 KPMG Fraud Survey, which reported fraud from 491 organizations in the private and public sector across Australia and New Zealand. The internal audit data are from a separate mail survey sent to the respondents of the KPMG Fraud Survey. We find that organizations with an internal audit function are more likely than those without such a function to detect and self-report fraud. Furthermore, organizations that rely solely on outsourcing for their internal audit function are less likely to detect and self-report fraud than those that undertake at least part of their internal audit function themselves. These findings suggest that internal audit adds value through improving the control and monitoring environment within organizations to detect and self-report fraud. These results also suggest that keeping the internal audit function within the organization is more effective than completely outsourcing that function. Copyright (c) 2008 The Authors. Journal compilation (c) 2008 AFAANZ.

This study uses the slippery-slope framework to understand how an oversight regulator's enforcement style influences audit firm compliance. Using data from interviews with audit regulators and audit partners, we find that partners perceive the regulator's enforcement style has shifted from being more collaborative to being more coercive. A consequence of this shift is that partners believe the development of trust between the two parties has been inhibited and a forced compliance climate has emerged. In response, firms have mandated strategies to increase the visibility of compliance, such as increasing mandatory use of checklists. Audit partners express some concern that oversight of the profession has resulted in firms adapting their audit process in ways aimed at minimizing inspection risk and not necessarily improving audit quality.

Independent, competent boards of directors and audit committees are said to be important mechanisms of corporate governance. The purpose of the present study is to empirically examine the association between audit committee composition and audit quality. Specifically, the link between the proportion of non-executive directors on an audit committee, financial qualifications of directors and the number of audit committee meetings held in a year are investigated and expected to have a positive association with the quality of the audit firm used. Audit quality is proxied by industry specialization. The results support the link between a higher proportion of non-executive directors on an audit committee and use of an industry specialist audit firm. Other measures of audit committee quality (those with a higher proportion of directors with financial qualifications and those that meet more frequently) are not significantly associated with the use of an industry specialist audit firm. Sensitivity analysis shows that the presence of an audit committee is linked to use of an industry specialist audit firm. Copyright 2005 Accounting and Finance Association of Australia and New Zealand..