Universiti Tun Abdul Razak (UNIRAZAK), MalaysiaCorporate governance mandates and listing rules identify internal audit functions (IAF) as a central internal control mechanism. External auditors are expected to assess the quality of IAF before placing reliance on its work. We provide evidence on the effect of IAF quality and IAF contribution to external audit on audit fees. Using data from a matched survey of both external and internal auditors, we extend prior research which is based mainly on internal auditors' assessment and conducted predominantly in highly developed markets. We find a positive relationship between IAF quality and audit fees as well as a reduction in audit fees as a result of external auditors' reliance on IAF. The interaction between IAF quality and IAF contribution to external audit suggests that higher quality IAF induces greater external auditor reliance on internal auditors' work and thus result in lower external audit fees.
This study aims to examine two aspects of internal audit quality, namely internal audit competency and internal audit contribution to financial statement audits. Consistent with the substitution view, this study predicts a negative relationship between the competency aspects of internal audit (the tenure of the existence of internal audit in the organization, internal audit staff expertise in IT and computer skills, training hours, internal audit staff professional certifications in accounting and auditing, and internal audit staff experience in auditing) and audit fees. Second, this study tests whether the contribution of internal auditors to financial statement audit reduces audit fees. The data analysis is based on a cross‐sectional regression model with observations of 73 public‐listed firms in Malaysia, which include publicly available data matched with survey responses from their internal and external auditors. The results of the study suggest that the competency of internal audit, namely the tenure of the existence of internal audit in the organization, training, internal audit staff prior experience in auditing and accounting, and certifications are associated with lower audit fees. Our findings for both aspects of internal audit quality (competency and internal audit contribution) lend support to the substitution view for explaining the links between internal audit quality and audit fees.
<p>This paper investigates the ability of logistic regression in anticipating corporate failures in Malaysia over a ten year period covering the economic cycles of boom, the Asian financial crisis of 1997 and economic recovery. 64 companies were analyzed with an initial 16 financial ratios. A strong logit model was developed with four ratios found to be significant in its predictive power and classification results showed very high average accuracy rates of 88% and 90% for the analysis and the hold-out samples respectively and for each of the five years preceding the actual failure. This study also showed it does not need many ratios to be able to anticipate potential company failures and that even with more advanced statistical models used recently, logistic regression is still a very effective and reliable statistical tool.</p>
In agri-food supply chains (ASC), consumers purchase agri-food goods from farmers. During this process, customers emphasize the need for agri-food safety, while producers hope to enhance their revenues. Due to the dynamism and complexity of the Bangladesh ASC, the traceability and control of agri-food goods encounter formidable obstacles. Due to their reliance on intermediaries, legal financial hurdles, Ethereum-based financial solutions, etc., however, most existing solutions cannot adequately meet the traceability and management needs of Bangladesh ASC. To solve these issues, the authors proposed an integrated Agri-food supply chain (IASC) model. In this study, a systematic review of the literature was conducted using a thematic analysis method. In a portion of the model, the authors depicted a linear physical flow to illustrate the relationship and function of intermediaries and to explain Bangladesh ASC's dependence on intermediaries. The approach incorporates Blockchain technology and IoT to promote transparency, minimize mistake, prevent product delays, remove unethical and illegal actions, improve supply chain (SC) management, track the whereabouts of the goods, and eventually increase consumer and supplier trust. The article also mentions that crypto currency-based financial transactions between stakeholders in the supply chain are now unlawful in Bangladesh. For blockchain API, a mobile banking and digital payment-based solution has been proposed. Finally, the blockchain-based Hyperledger Sawtooth API has been suggested so that clients can trace the entire history of a product by scanning the QR code on the packaging. Since Bangladesh's economy is primarily based on agriculture, this research can assist in boosting Bangladesh's economy. The paper would also contribute to the reduction of corruption and the improvement of firmer/ grower and consumer satisfaction. The findings also pave the way for future studies to implement blockchain technology in ASC without relying on Ethereum-based financial flow solutions.
There are few industries more crucial to the global economy than agriculture. The economic well-being, security, and health of a nation's population all depend on its agricultural economy. These days, people are paying a lot more attention than ever before to issues related to food insecurity. Few industries are profitable as the global food supply chain. Unfortunately, the data illustrates that there are problems in the food supply chain. The failure rate of the Agri-food Supply Chain (ASC) is much higher because of the information gap caused by the difficulty of end-to-end traceability. Therefore, it is now crucially important to monitor ASC with the components. Literature review concludes that consumers' health can be significantly improved by using Blockchain database and Internet of Things (IoT) technologies to track the provenance of their food in real-time. With the help of these innovations, the entire agricultural product supply chain, beginning with the farmers and ending with the retailers, can be handled with complete transparency. Through the use of IoT, food can be traced, verified, inspected for quality and security, inventoried, food waste managed, and eventually, the data may be secured in a database and made available to all through blockchain. The price of the product and the supply of a safe and transparent payment chain for all parties involved in the agri-food supply chain are other crucial elements. Therefore, Agri-Food Supply Chain (ASC) transparency may be ensured with the help of IoT technology, a blockchain database system, and safe and automated financial flow.
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