scholarly journals External VS. Internal Audit in the Accounting of Complex Contractual Instruments: A Survey on EU Firms

2016 ◽  
Vol 11 (5) ◽  
pp. 22
Author(s):  
Massimiliano Celli
Keyword(s):  
Internal Audit ◽  
Financial Statements ◽  
Faithful Representation ◽  
Financial Instrument ◽  
Ias 39 ◽  
Ifrs 9 ◽  
Swing Contract ◽  
Corporate Practice ◽  
Independent Audit

<p>This article aims at ascertain if external and independent audit can improve the reliability of IAS/IFRS financial statements with regard to the accounting of complex contractual instruments such as swing contracts for the sale and purchase of energy commodities. To this end, first of all the standard contents of the contracts at stake will be identified, based on those usually recurring in corporate practice. Then, it will be ascertained whether such contracts subtend an industrial usage only, so that the pertinent arrangement has to be accounted as a standard purchase/sale transaction, or whether the counterparts are pursuing financial intendments, since in such assumption the swing contract must be accounted as a financial instrument in accordance with IFRS 9/IAS 39. Conclusively, the modalities will be analysed which are used by a number of European companies whose typical activity is the purchase/sale of energy commodities, to account such kind of contracts. The survey aims at verify if the accounting modalities chosen by companies whose financial statements are subject to an external and independent audit (voluntarily or mandatorily pursuant to the applicable laws) are more compliant with the principle of faithful representation than those which are not subject to an external and independent audit.</p>

Disclosures in Audit Committee Charters and Reports

2002 ◽  
Vol 16 (4) ◽  
pp. 291-304 ◽  
Author(s):  
Joseph V. Carcello ◽  
Dana R. Hermanson ◽  
Terry L. Neal
Keyword(s):  
Voluntary Disclosure ◽  
Audit Committee ◽  
Stock Exchange ◽  
Internal Audit ◽  
Financial Statements ◽  
Audit Committees ◽  
Future Research ◽  
Depository Institutions ◽  
High Level ◽  
Independent Audit

In response to recent criticisms of audit committee performance, new SEC and stock exchange rules require companies to prepare an audit committee charter and to publish the charter in their proxy statement at least once every three years. Audit committees also must disclose how they discharged their responsibilities during the year. We study the disclosures in audit committee charters and reports by examining a random sample of 150 proxy statements filed in Spring 2001. The primary purposes of this analysis are to understand audit committee activities and to identify possible areas for further audit committee reform. We find that what audit committees say they are doing in their reports differs from what their charters say the committee should be doing. There is a generally high level of compliance with mandated audit committee disclosures, such as disclosures related to reviewing and discussing the financial statements with management. However, voluntary disclosure of audit committee activities was more common for depository institutions, larger companies, NYSE-listed companies, and companies with more independent audit committees. These results indicate either more active audit committees in such companies, or a greater commitment to audit committee disclosure in such companies. In addition, some of the disclosure levels suggest the need for additional reforms regarding audit committee oversight of interim reports, number of audit committee meetings, and audit committee oversight of internal audit. We also suggest directions for future research.

scholarly journals IFRS 9 Single Impairment Model: Semantics and Circularity? A Study in the Airline Industry

2021 ◽  
Vol 16 (12) ◽  
pp. 41
Author(s):  
Francesco Bellandi
Keyword(s):  
Financial Reporting ◽  
Airline Industry ◽  
Financial Statements ◽  
International Accounting Standards ◽  
Single Model ◽  
Financial Reporting Standards ◽  
Strong Indicator ◽  
Ias 39 ◽  
Ifrs 9 ◽  
Credit Losses

This paper studies a sample of airlines reporting under International Financial Reporting Standards (IFRS) about three specific challenges in implementing International Accounting Standards Board (IASB) (2019), IFRS 9 requirements for impairment versus IASB, 2014, IAS 39: 1) expected versus incurred credit losses; 2) impairment scoping and elective simplifications; and 3) definition and use of default. First, there appears to be a strong indicator that the way airline companies have drawn the line between what future conditions should or should not be considered in estimating expected versus incurred credit losses has maintained the fundamental tenet in IFRS of representing the condition existing as of the end of the reporting period. Second, evidence of companies quests for IASB (2019), IFRS 9 impairment simplifications attests to the criticism that the alleged single model of impairment is in effect a complex collection of different techniques. Finally, the degree of specific application that IASB (2019), IFRS 9 requires for the definition and use of default, as well as the customization of what triggers a significant change in the risk of default since initial recognition, does not appear to have been fully received, and sufficiently disclosed in the financial statements.

scholarly journals The Improving Model of the Quality of Financial Statements and Successful Implementation of Local Financial Information Systems

2020 ◽  
Vol 1 (2) ◽  
pp. 128-144
Author(s):  
Irfan Irfan ◽  
◽  
Eka Nurmala Sari ◽  
Muhyarsyah Muhyarsyah ◽  
Siti Irafah ◽  
...  
Keyword(s):  
Information System ◽  
Internal Audit ◽  
Financial Statements ◽  
Financial Information ◽  
Successful Implementation ◽  
City Governments ◽  
Financial Reports ◽  
Financial Report

his study aims to (1) examine and analyze the influence of Human Resource (SDM) competence and the role of internal audit on the successful implementation of the Local Financial Information System (SKID) partially and simultaneously, (2) examine and analyze the competence of SDM and the role of internal audit on the quality of financial report partially and simultaneously,(3) examine and analyze the influence of SDM competence and the role of internal audit on the quality of financial reports on the successful implementation of the SKID. The object of this study is all provincials and district / city governments throughout North Sumatera. The sample of this study was 34 (thirty four). The data was collected by questionnaire, documentation, and interview methods. The analysis method used was path analysis using SPSS Program. The results of this study indicate that (1) SDM competence and the role of internal audit have no partial effect on the successful implementation of SKID (2) SDM competence, the role of internal audit doesn’t simultaneously affect the successful implementation of SKID (3) SDM competence and the role of internal audit have a significant effect partially to the quality of financial reports (4) the successful implementation of SKID has no effect on the quality of financial reports (5) SDM competence, the role of internal audit, the successful implementation of SKID simultaneously affects the quality of financial reports (6) SDM competence and the role of internal audit have no effect on quality financial reports through the successful implementation of the local financial information system.

scholarly journals Common Characteristics and Differences in External and Internal Auditing

2018 ◽  
Vol 4 (1) ◽  
pp. 261-267
Author(s):  
Fatmir Mehmeti
Keyword(s):  
Internal Control ◽  
Value Added ◽  
Internal Audit ◽  
Daily Practice ◽  
Financial Statements ◽  
Financial Information ◽  
Financial Reports ◽  
External Auditors ◽  
Logical Concept ◽  
Public Company

Abstract Many scholars have shown that failure in leading big companies as well as the latest financial crises have led the auditing market to perceive traditional auditing more as a legal requirement rather than as a value added for the company. There are others that do not completely agree to this, but they all accept that the auditing as a profession should accept changes which will affect the value added for the company from auditing. Nowadays the companies are required more accountability rather that it was required before, perversely only financial reports were reported by the companies. Auditing is a process which confirms the statement provided by the company management regarding the information in financial statements that are real and accurate. Auditing has to be based on evidences and logical concept for better understanding. For companies that operate in the market, it is important to provide financial information that is consistent, reliable and complete for all users of the financial statements (banks, potential shareholders and the international community). In daily practice of entities we have two kinds audit, the internal and external audits. Usually, these are interlinked and complementary, with the ultimate aim that the (overall) audit is more effective and the reports that will emerge are fully arguable and meaningful. The internal audit has an important role which is to increase the effectiveness of internal control in private or public company. Internal audit has the responsibility of informing the management of the institution of deficiencies or weaknesses in the internal control system. External auditors are the fist line of the front for companies liadership. They play a key role in verifying the financial information provided to shareholders. External auditors inspect the financial statements prepared by the entity and provide assurance and independent opinion if these statements represent a true and fair view of the entity's condition for the year under review.

scholarly journals The Impact of the Application of International Standard for Financial Reporting No (9) on the Faithful Representation of Financial Accounting Information in Jordanian Commercial Banks

2019 ◽  
Vol 14 (3) ◽  
pp. 88
Author(s):  
Amer Sulaiman Alkhresat ◽  
Tareq Hammad Almubaydeen
Keyword(s):  
Financial Reporting ◽  
Commercial Banks ◽  
Stock Exchange ◽  
Accounting Information ◽  
Correlation Coefficients ◽  
Study Data ◽  
Financial Accounting ◽  
Faithful Representation ◽  
Ifrs 9 ◽  
The Impact

The purpose of this study is to demonstrate the impact of the application of IFRS 9 on the faithful representation of financial accounting information in Jordanian commercial banks. To achieve this objective, the study used the descriptive analytical approach to analyze a questionnaire that was answered by the managers of 13 commercial banks, which are listed in Amman stock exchange. The researchers distributed 78 questionnaires, while 76 were retrieved with a percentage of 97%. Additionally, the study relied on the descriptive statistics, correlation coefficients, and the simple regression to analyze the study data, and hypotheses. As a result, the study found a significant impact for the application of IFRS 9 to the faithful representation of financial accounting information. Relied on the aforementioned consequence, the study recommended that there is a necessity for financial departments to focus on measuring their financial obligations, as well as focusing on the development of accounting policies during the application of the standard. In addition, the study concludes that it is important for these banks to have an adequate knowledge of accounting standards in general, while standard No &ldquo;9&rdquo; specifically.

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