Zoom Snowboards Incorporated: Understanding the Impact of Management Decisions on the Audit Plan

2012 ◽  
Vol 27 (4) ◽  
pp. 1193-1213 ◽  
Author(s):  
Joanne C. Jones
Keyword(s):  
Business Strategy ◽  
Audit Committee ◽  
Financial Statement ◽  
Rigorous Analysis ◽  
Private Company ◽  
Audit Planning ◽  
Financial Statement Audit ◽  
Multiple Issues ◽  
The Impact

ABSTRACT Zoom Snowboards Incorporated is a fictitious Canadian private company in the snowboard industry. While the company is fictitious, many of the facts are adopted from actual snowboard companies. The overall goal of this case is to give the students an opportunity to develop their ability to perform a rigorous analysis of an assurance case with multiple issues. Students assume the role of audit senior and are asked to prepare an audit planning memo for the partner. In order to perform a rigorous analysis, students will need to consider the broader issues related to business strategy, risk management, and corporate governance, as well as the regular components of an audit planning memo. Students will also need to consider how the various requests from client management, the bank, and the audit committee impact the financial statement audit as they are preparing their planning memo.

scholarly journals Planning for Substantive Testing at the Assertion Level: A Training Activity and Mini Case

2020 ◽  
Author(s):  
Janice E. Rummell ◽  
Andrea B. Weickgenannt
Keyword(s):  
Planning Process ◽  
Critical Role ◽  
Financial Statement ◽  
Student Survey ◽  
Training Activity ◽  
Audit Planning ◽  
Financial Statement Audit ◽  
Students First ◽  
Survey Responses

This two-part educational resource was developed to enhance students’ understanding of a key aspect of the audit guidance concerning financial statement audit planning for substantive testing at the assertion level. Assuming the role of audit associates at a CPA firm, students first engage in a training activity in which they deconstruct substantive audit tasks into significant financial statement accounts, management assertions, and types of audit procedures related to each task. Then students consider inherent risk factors for a client engagement in a mini case and apply relevant accounts, management assertions, and detailed substantive audit procedures. These resources are easy to implement and require little advanced preparation, yet they provide a rich instructional resource for either new or experienced auditing faculty. Assessment results and student survey responses reveal the effectiveness of these resources in promoting students’ comprehension of the critical role of management assertions in the audit planning process.

Comprehensive Income: which potential effects on firms' performance evaluation and users' decision process?

2016 ◽  
pp. 55-94
Author(s):  
Pier Luigi Marchini ◽  
Carlotta D'Este
Keyword(s):  
Performance Evaluation ◽  
Decision Process ◽  
Financial Analysts ◽  
Listed Companies ◽  
Financial Statement ◽  
Comprehensive Income ◽  
Other Comprehensive Income ◽  
Gains And Losses ◽  
The Impact

The reporting of comprehensive income is becoming increasingly important. After the introduction of Other Comprehensive Income (OCI) reporting, as required by the 2007 IAS 1-revised, the IASB is currently seeking inputs from investors on the usefulness of unrealized gains and losses and on the role of comprehensive income. This circumstance is of particular relevance in code law countries, as local pre-IFRS accounting models influence financial statement preparers and users. This study aims at investigating the role played by unrealized gains and losses reporting on users' decision process, by examining the impact of OCI on the Italian listed companies RoE ratio and by surveying a sample of financial analysts, also content analysing their formal reports. The results show that the reporting of comprehensive income does not affect the financial statement users' decision process, although it statistically affects Italian listed entities' performance.

The role of audit committees in mitigating earnings management: evidence from Jordan

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Taha Almarayeh ◽  
Modar Abdullatif ◽  
Beatriz Aibar-Guzmán
Keyword(s):  
Developing Countries ◽  
Earnings Management ◽  
Audit Committee ◽  
Discretionary Accruals ◽  
Least Square ◽  
Audit Committees ◽  
Institutional Setting ◽  
Content Type ◽  
The Impact

PurposeThis study examines the relationship between audit committees (ACs) and earnings management (EM) in the developing country context of Jordan. In particular, it investigates whether audit committee attributes, including their size, independence, expertise and meetings, are able to restrict discretionary accruals as a proxy for EM.Design/methodology/approachThe generalized least square (GLS) regression was used to study the association between audit committee attributes and discretionary accruals, as a proxy of EM, for a sample of industrial firms listed on the Amman Stock Exchange (ASE) during the period 2012–2020. Data were obtained from the firms' annual reports.FindingsThe regression results indicate that audit committee independence is the only audit committee attribute that seems to improve the effectiveness of ACs, in that it is significantly associated with less EM, while other audit committee attributes that were tested do not show statistically significant associations.Research limitations/implicationsIn emerging markets, like Jordan, ACs may not be an efficient monitoring mechanism; therefore, it can be argued that the prediction made by the agency theory about the role of ACs in mitigating opportunistic EM activities does not necessarily apply to all contexts.Practical implicationsA better understanding of audit committee effectiveness in developing countries could help regulators in these countries assess the impact of planned corporate governance (CG) reforms and to better monitor and enhance the performance of ACs.Social implicationsIn a setting characterized by closely held companies, high power distance and low demand for high-quality CG mechanisms, this study contributes to understanding how this business system operates, and how improving CG mechanisms could be successful in such cultures.Originality/valueThis study investigates the under-researched relationship between audit committee characteristics and EM in developing countries. In so doing, it aims to provide new insights into this relationship within the developing context case of Jordan, including if and how the institutional setting influences this relationship.

scholarly journals Audit committee quality and audit report lag: the role of mandatory adoption of IFRS in Saudi companies

Accounting ◽  
2021 ◽  
pp. 167-178
Author(s):  
Mahfod Mobarak Aldoseri ◽  
Nasr Taha Hassan ◽  
Magdy Melegy Abd El Hakim Melegy
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Audit Committees ◽  
Strong Impact ◽  
Audit Report ◽  
Before And After ◽  
Mandatory Adoption ◽  
The Impact ◽  
Weak Influence

This paper aims to examine the effect of audit committee characteristics on audit report lag, and also explores whether this effect will vary between before and after mandatory adoption of IFRS in Saudi listed companies. Based on a Saudi sample of 388 firm-year observations from 2015 to 2018, the Poisson regression analysis shows that among audit committee characteristics, only audit committee financial experience significantly influences the timing of financial reporting. The result indicates a weak influence of audit committees on timeliness of financial reporting, which is consistent with the results of most of previous studies. On the other hand, the results show a strong impact of the adoption of IFRS on the context of that relationship, where the results show the impact of IFRS on audit report lag, audit committee quality and the association between them.

scholarly journals The Impact of Audit Committee Characteristics on Environmental and Social Disclosures

2019 ◽  
Vol 8 (3) ◽  
pp. 111-121 ◽  
Author(s):  
Ali Altuğ Biçer ◽  
Imad Mohamed Feneir
Keyword(s):  
Board Of Directors ◽  
Financial Reporting ◽  
Audit Committee ◽  
Good Image ◽  
The Board Of Directors ◽  
Important Means ◽  
Societal Impacts ◽  
The Impact

The main reasons for corporate participation in environmental and social disclosure are stability, development, and continuity through participation in protecting the environment and optimizing the use of available resources. As well as the company practices and participation in society of the most important means to create a good image of the company in the community. There is a rise demand for companies to take accountability for their environmental and societal impacts. A core role of the Audit Committee (AC) is to help the board of directors in overseeing the company's reporting policy and oversees the quality of financial reporting in the company. This study examined the impact of audit committee characteristics on the level of environmental and social disclosures in listed banks in Borsa Istanbul. The results of the study showed that there is no statistically significant relationship between the characteristics of the audit committee and the environmental and social disclosures. Consequently, these characteristics have no effect on the volume or type of disclosure and their inability to predict them.

scholarly journals Exploring Changing Requirements of Financial Statement Audit Reports via a Morphogenetic Approach

2021 ◽  
Vol 15 (2) ◽  
pp. 38-55
Author(s):  
Ying Deng ◽  
Graham Bowrey ◽  
Greg Jones
Keyword(s):  
Financial Statement ◽  
Public Accounting ◽  
Accounting Firms ◽  
The Public ◽  
Financial Statement Audit ◽  
Audit Regulation ◽  
Financial Audit ◽  
Proposed Regulation ◽  
Audit Reports ◽  
The Impact

There has been an ongoing concern with the quality of financial audit reports issued by registered public accounting firms in relation to financial accountability and transparency of the financial statements. In July 2009 the Public Accounting Oversight Board (PCAOB) released a concept paper outlining changes to the requirements of financial audit activities such as the inclusion of the engagement partner’s signature on the financial audit reports. The aim of these new requirements was to improve the accountability of engagement partners as well as enhance the perception of transparency of the audit reports. However, the contribution and effectiveness of these requirements to improve accountability and transparency of audit reports for various stakeholders relying on the audited financial information is questionable. This study explores the impact and effectiveness of changes to auditing regulation and processes through the application of Archer’s (1995) morphogenetic approach which is based on social conditioning, social interaction, and social elaboration where the structural influences provides the environment for agents to differentiate themselves. In addition, this study demonstrates how proposed regulation changes mould the qualities of audit regulation, the profession and the auditor whose perspectives deserved to be noticed from the dominant constituencies structured by the propositions of a morphogenetic analysis.

scholarly journals The Moderating Role of CSR On the Antecedents And Out Come of Earnings Management in The Iraqi Firm

2021 ◽  
Author(s):  
Mohammed Ghanim Ahmed ◽  
Yuvaraj Ganesan ◽  
Fathyah Hashim
Keyword(s):  
Earnings Management ◽  
Stakeholder Theory ◽  
Audit Committee ◽  
Secondary Data ◽  
Annual Reports ◽  
Financial Reports ◽  
Csr Disclosure ◽  
The Impact ◽  
Moderating Role

The increase in the number of firms manipulating financial reports has misled shareholders' investment decisions and resulted in an indelible blot on foreign investors’ trust. Due to earnings management (EM) practice, managers' inefficiency, and lack of transparency in Iraq companies. This study tested the influence of the corporate governance mechanisms (CG), (board independence, audit committee, meeting frequency) on EM based on agency theory, as well, to link between EM and firm's performance (FP) in Iraqi listed companies and the impact of moderating role of corporate social responsibility (CSR) based on the Stakeholder Theory. The study's sample consists of 65 companies for the 2013-2018 financial years. Data were collected mainly from the annual reports (secondary data) of the Iraqi listed firms. This study uses the M-score model to detect EM practices as practical techniques in detecting earnings manipulation practices. The panel static model estimators. Hence, this paper adds to the CG literature from the perspective of stakeholder theory using Iraq's unique industrial environment. Based on the research results, policy-makers might use the study‘s findings to recognize the essential roles of several CG mechanisms in alleviating the opportunistic practices in Iraq. Further, companies should also be encouraged to enhance the CSR disclosure quality.

scholarly journals The Impact of Audit Committee and Internal Audit towards Financial Statement Quality: External Audit and Corporate Governance as Intervening Variables

2018 ◽  
Vol 7 (4.34) ◽  
pp. 208
Author(s):  
Islahuzzaman . ◽  
Syafdinal . ◽  
Syakieb Arsalan ◽  
Maya Lisa Aryanti
Keyword(s):  
Corporate Governance ◽  
Theoretical Model ◽  
Audit Committee ◽  
Internal Audit ◽  
Financial Statements ◽  
Financial Statement ◽  
External Audit ◽  
The Impact ◽  
Intervening Variables

A financial statement is a crucial matter since its quality is declining. This research developed and tested a theoretical model which identified factors directly or indirectly contributing to the financial statement quality, namely audit committee and internal audit; meanwhile, external audit and corporate governance were considered as antecedent factors having impact on the report. The objective of the research is to gain insight on such factors. The objective of the research is to gain insights on factors that affect such reports. The findings showed consistent evidence supporting the theoretical model. They also showed how AC and IA simultaneously and partially impacted the quality of financial statements (QFS). AC and IA directly or indirectly affect the quality of the financial statement. They also have indirect effects through CG and EA in enhancing the quality to 77%. 

Factors Determining the Role and Tasks of HR Business Partnering in Enterprises

2021 ◽  
Vol 138-139 (1-2) ◽  
pp. 65-84
Author(s):  
Maria Wanda Kopertyńska ◽  
Natalia Dernowska
Keyword(s):  
Organizational Culture ◽  
Organizational Structure ◽  
Organizational Development ◽  
Business Strategy ◽  
Research Method ◽  
Structured Interview ◽  
The Other ◽  
Development Phase ◽  
The Impact

The article presents the results of research on the impact of selected factors, such as business strategy, organizational culture, the stage of organizational development, the location of HR in the organizational structure, the type of activity, and the sector to which the company belongs, on the role and scope of the tasks of HR Business Partnering (HR BP). The research method employed was an in–depth, partially structured interview conducted on a group of HR BPs from twenty companies belonging to various sectors. In the interview, the respondents rated the impact of each factor on a scale from 1 to 5, where 1 means definitely has no impact and 5 means there positively is an impact. On the basis of the research, it was shown that the company’s business strategy, organizational culture, and the location of HR in the organizational structure have the greatest impact on the shape and role of HR BP in the surveyed organizations. The organizational development phase is slightly less important. On the other hand, the type of activity of the organization as well as the sector to which the company belongs has only a slight impact on the role and scope of tasks of HR BP in the company.

The Role of Intellectual Property Protection in the Business Strategy of University Spin-Off Biotech Companies in a Small Transition Economy

2007 ◽  
Vol 32 (1) ◽  
pp. 19-40 ◽  
Author(s):  
Tõnis Mets ◽  
Merike Leego ◽  
Tiit Talpsep ◽  
Urmas Varblane
Keyword(s):  
Intellectual Property ◽  
Business Strategy ◽  
Transition Economy ◽  
Intellectual Property Protection ◽  
Transition Country ◽  
Low Costs ◽  
Break Even Point ◽  
The Impact ◽  
Selection Of

AbstractSpin-off biotech companies often have difficulties in creating competitive advantage through protection of their intellectual property, due to their limited human and financial resources. Having considered the value of the intellectual property and questions of enforceability, spin-off companies should use patenting only for inventions with a high market value and high patent enforceability; otherwise, publishing early or keeping the invention a trade secret should be preferred. This allows the inventor to benefit from operational freedom while maintaining low costs. The impact of the protected intellectual property on the success of the firm depends on its speed of entry into the market and when it reaches break-even point. In a transition country with a poorly developed entrepreneurial environment, patents may expire before the spin-off company has produced any profit from its expenditures on the protection of the intellectual property. It should also be remembered that their products may contain modules which are already protected by other inventors. Consequently, a strategically fundamental issue for the success of spin-off firms is the careful selection of the markets in which to operate, and the choice of the proper degree and method of intellectual property protection.

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