Interdependencies between Auditing and Corporate Governance — Evidence from Germany

Voeller, Dennis; Bremert, Michael; Zein, Nicole

doi:10.1007/bf03396855

Cited by 8 publications

(5 citation statements)

References 59 publications

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“…Hence, most prior studies measure EAQ by the size of the audit companies because bigger companies hire qualified and skilled staff, they have more resources and better techniques, since most of previous studies suppose Big-4 audit firms which have better EAQ compared to non-top 4 (Lawrence et al, 2011). There are many studies which have investigated the effect of audit fees on EAQ and they found that audit fees are considered an EAQ indicator (Hoitash et al, 2007), this is supported by previous research that have used audit fees as EAQ indicator (O'Sullivan, 2000; Kane and Velury, 2004;Voeller et al, 2013;Kikhia, 2014), thus, the definition should be based on the main aim of the audit which focused on discovering the material misstatements, ensuring the financial transactions and statements present the real condition of the company and report the results of the audit work to the shareholders, in achieving these objective the external audit need to interact with the ICGM.…”

Section: The Description Of External Audit Qualitymentioning

confidence: 74%

“…Reviewing literature on the relationship between ICGM and EAQ shows that recent studies have examined the relationship between on ICGMs and EAQ. These studies on ICGM and EAQ have focused on the relationship between some characteristics of board of directors, and EAQ (Kane and Velury, 2004;Voeller et al, 2013;Kikhia, 2014). Moreover, many publications on the relationship between ICGMs and EAQ specifically focus on ownership structure, audit committee and EAQ.…”

Section: Introductionmentioning

confidence: 99%

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Corporate Governance and the Quality of Audit Process: An Exploratory Analysis Considering Internal Audit, Audit Committee and Board of Directors

Almasria

2022

EJBMR

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This research aims to offer a better understanding concerning the relationships between Internal Corporate Governance Mechanisms and quality of the external audit process and what are the governance mechanisms that can influence some aspects of the quality of the external audit process. Semi-structured interviews were employed in order to get detail views of the external auditors to explain and clarify how the Internal Corporate Governance Mechanisms can influence the quality of the external audit process as well as offer a better understanding of the relationships between the governance mechanisms and the quality of the external audit process. Adopting this research design (exploratory) was mainly as a response to the recent calls as there is a lack of this kind of study that investigate the relationship between the Internal Corporate Governance Mechanisms can influence the quality of the external audit process. This research focuses on the perception/insight of the Jordanian external auditors regarding the influence of Internal Corporate Governance Mechanisms on quality of the external audit process. Thus, this study uses a sample of 206 Jordanian external auditors for the survey and 13 participants from this sample for the interview. The qualitative study employed the thematic analysis to analyse the interview data. The interview results highlighted that there are different ways and stages that the ICGMs can influence the EAQ, for example, through holding effective regular meeting, ensuring the auditor compliance with the audit requirements “regular monitoring”, discussing the initial and significant audit results “draft of discussion”, taking necessary follow-up actions “feedback” as well as requesting the auditor to conduct additional tests which can in turn enhance the EAQ. The results also suggest that ICGM can assist improving different aspects of EAQ such as the quality of the evidence that are collected by the ICGM and the valuable guidance from the ICGM to the external auditor. The communication between the ICGM and external auditor can be focused on different issues related to the audit process such as auditors’ findings, the effectiveness of internal control, scope limitations and material misstatements which allow improving the effectiveness of audit process. This indicates that, the auditor must be aware of the dynamic deciding of the role of particular mechanisms in improving the external audit process. The results have implications for the practitioners and regulators who are assessing the role of ICGM in improving the reliability of the financial report and auditor’s report. The empirical findings demonstrate that different ICGM can influence different aspects of the EAQ. More importantly, the results reveal that audit practice in Jordan is experiencing some difficulties in terms of the independence of the auditor especially, for the small local firms and providing non-audit service. In addition, there is no professional body for board of director; internal audit and audit committee like Jordanian association of certified public accountant (JACPA) for the external auditor, thus, responsibilities of these mechanisms need to be formally overseen by a higher authority. For the policymakers, this study offers a unique proposition to improve the effectiveness of the ICGM to achieve EAQ. These empirical findings of this study also highlight the importance of improving EAQ as a solution for the agency problems through reducing information asymmetry, improving the disclosure practice, level of confidence and assurance of the financial reporting as well as deterring the opportunistic behaviour from different parties. This research extended the existing empirical evidence that investigated the role of the internal governance mechanisms in the audit process.

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Section: The Description Of External Audit Qualitymentioning

confidence: 74%

Section: Introductionmentioning

confidence: 99%

Corporate Governance and the Quality of Audit Process: An Exploratory Analysis Considering Internal Audit, Audit Committee and Board of Directors

Almasria

2022

EJBMR

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“…The consideration of auditing holds great importance within corporate governance procedures, particularly among the various committees present within an organization. In addition to its mandated status by regulatory entities, it can also be perceived as a facilitator and mitigator of disputes within the agency problem, specifically in relation to information asymmetries (Fera et al, 2022;Koutoupis et al, 2018;Voeller et al, 2013). The inclusion of an audit committee is a fundamental component of the internal control mechanisms employed by firms to establish and maintain effective corporate governance.…”

Section: Literature Review and Hypotheses Development Audit Committee...mentioning

confidence: 99%

Audit Committee Characteristics and Firm Performance with the Moderating Role of Political Connections

Salameh Alkhazaleh,

Ibrahim,

Ali

2024

IJARAFMS

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This study introduces a theoretical framework that examines how a company's performance is influenced by the audit committee, and how this relationship is influenced by political connections. The research sample will comprise 75 non-financial public companies that were listed on the Amman Stock Exchange from 2017 to 2022. This study anticipates a favorable impact of the audit committee on the performance of the company. Moreover, it is expected that the presence of political links will enhance the relationship between the audit committee and corporate performance. This study aims to examine the moderating impact of political connections on relationships. The findings of this study can be partially extrapolated to the circumstances of other emerging economies owing to the shared characteristics of the commercial landscape. This study is the inaugural research undertaken in Jordan after the modification of corporate governance rules in 2017, which featured specific mandates for audit committees.

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“…Corporate governance deal with the manner the custodian of finance of corporation guarantees themselves of getting returns on their investments (Morck, Shleifer, & Vishny, 2001;Voeller, Bremert, & Nicole, 2013) corporate governance has been designed to explain the mechanism that ensures management performance in an efficient and effective manner. This governance mechanism are designed to reduce agency problem between actors in business (Kamardin & Haron, 2011;Latif, Kamardin, Nisham, Mohd, & Adam, 2013).…”

Section: Corporate Governance Code In Nigeriamentioning

confidence: 99%

“…Apart from compulsory or regulatory requirements, it could be considered a way to mediate and moderate agency conflicts and information asymmetries (Cohen, Holder-Webb, Nath, & Wood, 2011;Voeller et al, 2013;Watts & Zimmerman, 2014). Internal audit function is one of the pillars of corporate governance (Abiola, 2012), he found out that is significant relationship between audit committee and performance.…”

Section: Audit Committeementioning

confidence: 99%

The Relationship between Audit and Risk Management Committees on Financial Performance of Non-financial Companies in Nigeria: A Conceptual Review

Edogbanya¹,

Kamardin²

2015

MJSS

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Interdependencies between Auditing and Corporate Governance — Evidence from Germany

Cited by 8 publications

References 59 publications

Corporate Governance and the Quality of Audit Process: An Exploratory Analysis Considering Internal Audit, Audit Committee and Board of Directors

Corporate Governance and the Quality of Audit Process: An Exploratory Analysis Considering Internal Audit, Audit Committee and Board of Directors

Audit Committee Characteristics and Firm Performance with the Moderating Role of Political Connections

The Relationship between Audit and Risk Management Committees on Financial Performance of Non-financial Companies in Nigeria: A Conceptual Review

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