Auditor independence

In this paper we empirically examine the relationship of (1) risk assessments and (2) the extent of computerization of accounting systems to the incidence and magnitude of misstatements. The six largest public accounting firms in Norway provided misstatement data from 58 audits. The results show that inherent risk factors related to personnel issues are related to the incidence of misstatements at the financial statement level. These factors plus factors related to management integrity and prior period accounting adjustments are related to the magnitude of the misstatements. Inherent risk assessments at the account level had a marginally significant relationship with both the incidence and magnitude of the detected misstatements. On the contrary, we find that the auditors' CR assessments are not associated with the detected misstatements. All of the sample companies have partial or completely computerized accounting systems. Significantly more misstatements occurred in partially computerized companies due to inadequate segregation of duties and auditor disagreement with management's judgments. The client's internal control system failed to detect more misstatements in partially computerized systems because appropriate controls were missing or not properly applied. Finally, the magnitude of misstatements in a complex EDP environment were less than those in a noncomplex environment.

The objective of our paper is to contribute to the accounting education literature by demonstrating that there are significant differences among final year undergraduate accounting students in the United Kingdom, Australia, India, and Malaysia with respect to an important concept in auditing, namely, perceptions of external auditors’ independence. To attain this objective, we make an original contribution to accounting cross-cultural studies by operationalizing culture in terms ofindependent and interdependent construals of selfhood. These fundamental core cultural differences are important because they play a major role in regulating psychological processes including perceptions. Additionally, to gain insight into the evolving complexities associated with understanding culture in a global economy, the concept of acculturation is invoked in hypothesis formulation. We find support for the hypothesis that students from countries with greater political, economic and socio–cultural inte...

When an auditor receives signi cant fee income from one client it has often been suggested that reappointment concerns may dilute auditors incentives to maintain independence from management. A possible response to this issue could be to mandate the rotation of auditors. However this is costly since new auditors must repeatedly invest in learning a new clients accounting system. In this research we build a model to formally analyze this trade-off. We nd that the desirability of rotation depends critically upon characteristics of the audit market structure and to what extent an individual client dominates an auditors' client portfolio de ned in terms of total fees. We show that although rotation is costly, in audit markets with relatively few large clients (thin markets), the resulting improved incentives for independence outweigh the associated costs. Our research is timely because although historically it may not have been economically desirable to adopt mandatory rotation, currently with increased corporate merger activity taking place, for instance in the oil sector, markets may now have become suf ciently thin to warrant the introduction of rotation.

The continuing and deepening economic reforms in China have brought many changes both socially and economically to the society. The primary function of auditing in China has begun to shift away from the traditional tax compliance assessment towards the credibility lending to financial statements. The economic reforms and the development of the Accounting Standards for Business Enterprises have necessitated the parallel development of auditing standards in China. While some significant differences exist, the new Chinese auditing standards are, in a number of important aspects, similar to the professional standards promulgated by the International Federation of Accountants. The development of a comprehensive body of standards, auditor independence, the role of certain auditing techniques, and certified public accountant (CPA) population are the major areas that China needs to improve. Opening up the Chinese accounting industry will trigger significant advances in the implementation of Chinese standards and the development of the Chinese accounting profession.

This study aims to determine the impact of the 2007 global financial crisis on the integration of the Islamic stock markets. Seven Islamic stock markets are selected based on the countries' level of development and geographical factors. The period of analysis is divided into the pre-crisis period (

The desirability of mandated auditor rotation represents an ongoing debate in the accounting profession. Proponents assert that audit quality (through auditor independence) is threatened by extended auditorclient relationships. Opponents assert that mandatory auditor rotation will actually decrease audit quality, primarily due to the time required for auditors to learn the nuances of a client's business processes. Our research contributes to this important debate by providing empirical evidence regarding the capital markets effects of audit tenure. Specifically, we examine newly issued bonds over the period 1990-2002 and find auditor tenure to be positively related to ratings received. This finding remains consistent across all sample issues regardless of investment grade, firm performance, or time period. We find no evidence that extended auditor-client relationships result in a decrease in the perceptions of audit quality.

Hervormingen met betrekking tot de auditsector hebben altijd veel stof doen opwaaien. Na een jarenlang proces is het nu zover: de EU verplicht kantoorrotatie. In dit artikel vergelijken we de Europese en de Amerikaanse regelgeving inzake partner- en kantoorrotatie. Beide regelgevers hebben een andere weg ingeslagen en we vragen ons bijgevolg af:  wie draait het meest door? (Te verschijnen in Audit, controle & governance, nr. 21)

We examine the association between the provision of non-audit services and earnings quality. Because of concerns regarding the effect of non-audit services on financial reporting credibility, the Securities and Exchange Commission recently issued revised auditor independence rules requiring firms to disclose in their annual proxy statement the amount of fees paid to auditors for audit and non-audit services. Using data collected from proxy statements filed between February 5, 2001 and June 15, 2001, we present evidence that firms purchasing more non-audit services from their auditor are more likely to just meet or beat analysts' forecasts and to report larger absolute discretionary accruals. However, the purchase of non-audit services is not associated with meeting other earnings benchmarks. We also find that the unexpected component of the non-audit to total fee ratio is negatively associated with stock returns on the filing date. These results are consistent with arguments that the provision of non-audit services strengthens an auditor's economic bond with the client and that investors price this effect.

The purpose of this research is to test and investigate The Effects of Work Experience, Independence, and Professional Scepticism on the Audit Quality in 12 public accountant firms. This study uses associative causal research. The technical questionnaire is purposive sampling. Data was obtained firms in East Jakarta a total of 80 sets of quetionnaires and samples are fit for use as much as 72 respondents .In this study the author used SPSS version 23 as a tool to test the normality data, the classical assumption test, descriptive statistics, t test analysis and test F and test the coefficient of determination with a significance level of 5% (0,05) which is an indicator of independently variable in this study is a work experience, independence, and professional scepticism while a dependent variable is Audit Quality.

We review accounting and finance research on corporate governance (CG). In the course of our review, we focus on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and finance scholars, and suggest ways to deal with it. Given the advent of large commercial CG databases, we also stress the importance of how CG is measured and in particular, the construction of CG indices, which should be sensitive to local institutional arrangements, and the need to capture both internal and external aspects of governance. The 'stickiness' of CG characteristics provides an additional challenge to CG scholars. Better theory is required, for example, to explain whether various CG practices substitute for each other or are complements. While a multidisciplinary approach to developing better theory is never without its difficulties, it could enrich the current body of knowledge in CG. Despite the vastness of the existing CG literature, these issues do suggest a number of avenues for future research.

An economic model by DeAngelo shows that the existence of client-specific quasi-rents impairs auditor independence. The provision of non-audit advisory services (NAS) increases quasi-rents, and thus it is a threat to independence. Recently, a number of changes have been made not only to the relevant international and US regulations, but also to the German regulations related to NAS. A large number of empirical studies have investigated the influence of NAS on the perceived auditor independence. Most of these studies were performed in Anglo-Saxon countries, particularly in the US, and a majority found a negative impact. Six studies are based on data from Germany. Most of them failed to find a significant negative impact on auditor's independence.

Bağımsızlık ve objektiflik tüm denetim alanlarında denetçiler için en önemli kavramlardır. Çünkü ekonomik krizler ve şirketlerde yaşanan suiistimaller sebebiyle finansal tablolara ve dolayısıyla bu tabloları kontrol eden ve denetleyen denetçilere olan güven konusunda da tereddütler oluşmaktadır. İşte bu noktada Uluslararası İç Denetim Standartları'nda da (bundan sonra " standartlar " olarak anılacaktır) yer alan bağımsızlık ve objektiflik konularını, denetimlerde edindiğimiz gözlemler üzerinden irdelemek istiyorum.

Purpose -To determine the effect of audit firm rotation and/or audit partner rotation on individuals' confidence in the quality of audited financial statements. Design/methodology/approach -Two separate behavioral studies were conducted with participants from the business and legal community (MBA and law students). In each study, one-way analysis of variance was conducted using a between-subjects approach. The independent measure was auditor rotation; the dependent measure was participants' responses to questions regarding company earnings. Because an experimental approach was utilized, the stimulus materials excluded potentially relevant information for this task. In addition, the participants were not held accountable for their decisions, nor was there any explicit motivation provided. Future research could explore other richer more complex case scenarios that provides some explicit motivation for participants. Findings -Results revealed that even in an environment of strong controls for corporate governance, audit firm rotation incrementally influenced individuals' confidence in financial statements. However, audit partner rotation did not have a similar effect. Originality/value -Little if any research examines both audit firm rotation and audit partner rotation. This research fills this void by addressing both concepts. The results suggest that rotating the audit firm will, contrary to GAO assumptions, better advance the goal to enhance auditor independence and audit quality and to restore investor confidence in the capital markets.

Profesi Auditor Internal sangat dibutuhkan oleh organisasi dimanapun, baik perusahaan swasta, BUMN/BUMD, perusahaan multinasional, perusahaan asing, pemerintahan, lembaga pendidikan dan Organisasi Nir Laba.

Dalam melakukan rekrutmen terhadap tenaga Auditor Internal untuk suatu organisasi, selain dapat diambil dari karyawan/staf dari bagian/divisi lain, juga diperoleh dari pihak luar organisasi, baik yang telah berpengalaman maupun yang baru lulus dari perguruan tinggi (fresh graduate).

Persaingan untuk memperebutkan posisi Auditor Internal ternyata lebih ketat dibandingkan posisi tenaga staf akuntansi (accounting staff) atau auditor untuk Kantor Akuntan Publik (KAP), sebab Auditor Internal dapat diperebutkan oleh lulusan dari berbagai disiplin ilmu serta berbagai pengalaman kerja.

Selain itu, sudah banyak perusahaan yang telah menyadari akan pentingnya peran dari Auditor Internal untuk melakukan pengendalian serta pengawasan yang dapat memberikan manfaat bagi perusahaan terutama terjaganya aset perusahaan dan tercapainya efisiensi dan efektifitas kegiatan perusahaan.

Untuk menjawab tantangan akan kebutuhan akan tenaga Auditor Internal yang meningkat tersebut, perlu adanya suatu referensi yang dapat menjadi panduan terutama bagi Auditor Internal tingkat pemula untuk melakukan penugasan audit dengan baik dan sesuai dengan standar audit yang berlaku serta sesuai dengan keinginan perusahaan.

Buku yang ada di hadapan pembaca ini adalah salah satu buku referensi yang berguna umumnya untuk masyarakat baik akademisi maupun dosen serta masyarakat lainnya yang ingin mengetahui kemampuan apa saja yang harus dipersiapkan oleh auditor pemula sebelum melakukan kegiatan audit serta dapat sebagai referensi penelitian. Secara khusus, buku ini diperuntukkan bagi calon Auditor Internal maupun Auditor Internal tingkat pemula yang akan melakukan penugasan audit agar audit yang dihasilkan dapat bermanfaat dan bernilai bagi perusahaan.

The aim of this research is to assess the relationship between the presumed AI influencing
factors and AI from the standpoint of auditors in Bahrain. Researchers have continuously
identified and assessed several factors that are expected to safeguard AI and objectivity to
mitigate the potential threats faced by the audit profession worldwide. As a result of the
promising Bahrain Economic Vision 2030 that emphasizes on ‘fairness’ as a one of major
principle, the regulators in Bahrain are expected to adopt new measures that enhance the role of auditors in maintaining fairness and transparency. This research hence investigated the subject matter in a way that intended to assess the AI influencing factors in a Bahraini context. The research is quantitative in nature, whereby questionnaires were distributed to a range of auditors representing the audit firms in the Kingdom of Bahrain. Following reliability and validity tests, the responses were analyzed descriptively, along with empirical analysis through using the Multiple Regression Model. The findings signified the substantial role of the audit regulations and related provisions in enhancing AI and impartiality, when compared to other presumed factors. The research recommendations focused on the importance of overseeing the audit firms and accounting professionals through the formation of an independent audit quality board as well as considering the adoption of a joint-audit practice for the listed companies.

The reality and perception of auditor independence is fundamental to public confidence in financial reporting. A new Independence Standards Board was set up in the U.S. in 1997 and the European Union (EU) is currently seeking to establish a common core of independence principles (EC Green Paper 1996). This paper explores, using a questionnaire instrument, U.K. interested parties' perceptions of the influence on auditor independence of a large set of 58 economic and regulatory factors. Forty-six factors have a significant impact on independence perceptions for all groups (finance directors, audit partners, and financial journalists). The principal threat factors relate to economic dependence and non-audit service provision, while the principal enhancement factor is the existence of an audit committee. Exploratory factor analysis reduces the factor set to a smaller number of uncorrelated underlying dimensions. Perceptions regarding many independence factors are found to be contingent upon characteristics of the respondents' ongoing audit relationships (in particular, audit firm type and company size).

We review accounting and finance research on corporate governance (CG). In the course of our review, we focus on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and finance scholars, and suggest ways to deal with it. Given the advent of large commercial CG databases, we also stress the importance of how CG is measured and in particular, the construction of CG indices, which should be sensitive to local institutional arrangements, and the need to capture both internal and external aspects of governance. The 'stickiness' of CG characteristics provides an additional challenge to CG scholars. Better theory is required, for example, to explain whether various CG practices substitute for each other or are complements. While a multidisciplinary approach to developing better theory is never without its difficulties, it could enrich the current body of knowledge in CG. Despite the vastness of the existing CG literature, these issues do suggest a number of avenues for future research.

This paper presents an historical and rhetorical analysis of auditor independence concepts. This analysis is relevant as the newly formed Independence Standards Board in the U.S. is beginning work on a conceptual framework of audit independence to use as a basis for regulation.

This paper reports on an exploratory study of auditor's independence in Barbados. Independence is a function of the mental attitude of auditors, and it affects their decision-making in resolving ethical dilemmas. The interviewees' responses revealed important differences between the auditors and other audit report users in such important areas as the regulatory framework, long-term relationships, provision of non-audit services, independence in appearance versus fact, and the selection of auditors. The preliminary results suggest that whilst auditors and users alike are comfortable with the concept of independence, the reasons for this comfort are more complex.

The financial statements preparation is the responsibility of the management, while auditor responsibility is to lend credibility of the financial statements. This study investigated the audit independence and credibility of financial reporting in the Nigerian banking sector.
Descriptive survey was used for the study. purposive sampling was used to select 250 accounting and auditing department employees of Guarantee Trust Bank, First Bank of Nigeria, Polaris Bank, Zenith Bank, and Diamond Bank, Lagos State, Nigeria.  Fifty (50) respondents was selected from each of the five banks to represent the sample size.
Descriptive statistics was used to analyze the responses from the questionnaire which involves descriptive analysis such as frequencies, percentages, mean and standard deviation.
The results revealed that; Auditor’s independence has significance impact on understandability of financial statement in the banking sectors in Nigeria. The study also reveals that auditor’s independence has positive and significant effects on the relevance of financial statement in the Nigerian Banking sector. The correlation analysis reveals that auditor’s independence is positively related with faithful representation of financial statement.
In line with findings, it was concluded that Auditors’ independence is fundamental to the credibility of the financial statement and Auditors fee are influenced by various economic determinants including the size and complexity of the audit work. The study recommended that auditors should not be allowed to provide audit clients with any other advisory services; There should be rotation of auditors to improve the auditors’ independence; There should be an implementation of peer assessment in order to ensure that audits are carried out with utmost professionalism and mutual respect; An audit committee should be set up by every limited liability company to evaluate the audit work done.
Keywords: Audit, Audit Independence, Banking Sector, Credibility, Financial Reporting.

In this paper I argue that in order for an auditor to be independent both in fact and in appearance, the auditor must also be financially independent from the auditing firm that employs him.

I have proposed to borrow some ideas from the property-owning democracy, which provides a certain degree of financial independence to its citizens. Financial independence might promote independence in fact by making it less important that the auditor retains a client in case of disagreement. It will also provide the individual auditors with an improved opportunity to stand up for their beliefs, and will reduce the risks and costs associated with high moral integrity.

In order to achieve financial independence I have proposed to create a personal savings fund with mandatory monthly contribution for the auditors. Once the fund contains sufficient funds to provide financial independence, the contributions should be made voluntarily. Such a fund will also signal the profession’s focus on auditor independence and integrity to the general public. This might lead to the restoration of trust in the profession, allowing it to continue to exist as a profession.

Our study explores loan officers' perceptions of auditors' independence and audit quality under three experimental audit firm rotation scenarios. We use a case experiment with a between-subjects design to determine whether rotation of the audit firm impacts financial statement users' perceptions of auditor's independence and quality. Findings based on 212 useable responses indicate that loan officers do perceive an increase in independence when the company follows an audit firm rotation policy. However, the length of auditor tenure within rotation fails to significantly change loan officers' perceptions of independence. Findings also indicate that neither the presence of a rotation policy nor the length of the auditor tenure within rotation significantly influences the loan officers' perceptions of audit quality.

Maintaining auditor independence and objectivity has benefits, while violating auditor independence and objectivity carries some costs. In this research, I described these benefits and costs. I then highlighted several main threats to auditor independence and objectivity. I also reviewed possible solutions and critically assessed them. The main conclusion is that, notwithstanding the adoption of some of these solutions by new regulations, many of the threats to auditor independence and objectivity are still very potent.

We review accounting and finance research on corporate governance (CG). In the course of our review, we focus on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and finance scholars, and suggest ways to deal with it. Given the advent of large commercial CG databases, we also stress the importance of how CG is measured and in particular, the construction of CG indices, which should be sensitive to local institutional arrangements, and the need to capture both internal and external aspects of governance. The 'stickiness' of CG characteristics provides an additional challenge to CG scholars. Better theory is required, for example, to explain whether various CG practices substitute for each other or are complements. While a multidisciplinary approach to developing better theory is never without its difficulties, it could enrich the current body of knowledge in CG. Despite the vastness of the existing CG literature, these issues do suggest a number of avenues for future research.

Definisi Audit Internal Audit internal adalah aktivitas asurans dan konsultansi yang independen dan objektif, yang dirancang untuk memberi nilai tambah dan meningkatkan operasi organisasi. Tujuan audit internal menurut IIA adalah Meningkatkan dan melindungi nilai organisasi dengan memberikan asurans, advis dan wawasan yang berbasis risiko dan objektif. wewenang audit internal adalah Akses penuh yang tidak terbatas dan bebas kepada catatan, fisik aset, dan personil perusahaan yang berkaitan dengan penugasan. Tanggung jawab audit internal adalah membantu organisasi dalam mempertahankan pengendalian yang efektif dengan mengevaluasi efektivitas, efisiensi dan mendorong perbaikan yang berkelanjutan

Abstrak Kecurangan atas laporan keuangan membuat kepercayaan masyarakat berkurang terhadap akuntan publik. Berdasarkan permasalahannya,penelitian ini bertujuan untuk menjawab pertanyaan-pertanyaan mengenai kualitas audit menurut auditor,presepsi auditor mengenai ATLAS,penerapan ATLAS untuk meningkatkan kualitas audit dan ATLAS menurut auditor yang minim pengalaman. Jenis penelitian ini adalah kualitatif deskriptif. Pengumpulan data dilakukan dengan cara melakukan wawancara. Responden pada penelitian ini yaitu auditor di Kantor Akuntan Publik Jakarta. Berdasarkan hasil penelitian dapat disimpulkan bahwa auditor selalu melakukan pertimbangan sebelum menerbitkan laporan audit sehingga menghasilkan kualitas audit yang bagus dan auditor sangat setuju dengan adanya ATLAS karena sangat efisien dan terotomatisasi sehingga dapat meningkatkan kualitas audit. Abstract Financial statement fraud usually makes less of societies trust to public accountant. Based on the matters, this research aim to answer many questions of audit quality according to the auditor experts , perception auditors for the ATLAS, application ATLAS to improve quality of audits and ATLAS according to junior auditors. The type of this research is descriptive qualitative. This research are using interview method for data collection tehnique. Respondences of the researches are the auditors expert of public accounting firm. Based on the results, it can conclude that the auditors always consider accurasy before publishing the audit report to gain the best output of audit quality and the auditors expert agree with the ATLAS to make jobs of auditors efficiently and automatically enhance improve audit quality.

Pelaporan audit keuangan meliputi audit atas laporan keuangan dan atas hal-hal yang berkaitan dengan keuangan. Standar audit meliputi tiga pembahasan yaitu: standar umum, standar pekerjaan lapangan audit kinerja dan standar pelaporan audit kinerja.

Earnings management is of great concern to corporate stakeholders. While numerous studies have investigated the effects of various corporate governance and audit quality variables on earnings management, empirical evidence is rather inconsistent. This meta-analysis identifies 12 significant relationships by integrating results from 48 prior studies. For corporate governance, the independence of the board of directors and its expertise have a negative relationship with earnings management. Similar negative relationships exist between earnings management and the audit committee's independence, its size, expertise, and the number of meetings. The audit committee's share ownership has a positive effect on earnings management. For audit quality, auditor tenure, auditor size, and specialization have a negative relationship with earnings management. Auditor independence, as measured by fee ratio and total fee, is also a deterrent to earnings management.

Based on the Capital Market Supervisory Agency (BAPEPAM), the company became a member of the Indonesia Stock Exchange is required to have audit committees. Audit committee in charge and responsible for (1) encourage the formation of an adequate internal control structure, (2) improve the quality of disclosure and financial reporting, (3) assess the scope and timeliness of external audit, external audit fees and the reasonableness of the independence and objectivity of external auditors, and (4) prepare a letter outlining the duties and responsibilities of audit committees during the financial year under review by the external auditor. Numerous studies have tried to analyze the relationship between the role of audit committees and earnings management performance. This study aims to analyze the effect of audit committee independence, competence of the audit committee, and effectiveness of audit committee meetings on earnings management in manufacturing companies in Indonesia. Linear regression method is used as an analytical tool of the research. The results indicate that audit committee independence and audit committee competence affects significantly on earnings management. Meanwhile, the variable effectiveness of audit committee meetings no significant effect on earnings management of manufacturing companies listed on the Stock Exchange. Keywords: audit committee, audit committee independence, audit committee competence, effectiveness of audit committee meetings, earnings management. ABSTRAK Berdasarkan peraturan dari Badan Pengendalian dan Pengawasan Pasar Modal (BAPEPAM), sebuah perusahaan harus memiliki komite audit sebelum dapat mendaftarkan untuk menjadi anggota dari Bursa Efek Indonesia (BEI). Komite audit perusahaan bertanggung jawab untuk (1) meningkatkan perumusan dari struktur/sistem pengendalian internal yang baik, (2) meningkatkan kualitas dari laporan keuangan dan penjelasannya, (3) melakukan evaluasi terhadap ruang lingkup dan periode penugasan dari auditor eksternal, pembayaran jasa auditor eksternal, dan kewajaran dari kemandirian serta obyektifitas dari auditor eksternal, dan (4) menyiapkan surat keputusan mengenai tugas dan tanggung jawab dari komite audit selama tahun fiskal yang sedang dievaluasi oleh auditor eksternal. Penelitian terdahulu sudah melakukan analisa terhadap hubungan antara peran dari komite audit dan manajemen laba perusahaan. Penelitian ini mencoba melakukan analisa terhadap dampak dari kemandirian komite audit, kompentensi dari komite audit, dan efektifitas dari pertemuan komite audit terhadap manajemen laba di perusahaan manufaktur di Indonesia. Regresi linier digunakan sebagai alat analisa di dalam penelitian ini. Hasil analisa menunjukkan bahwa kemandirian komite audit, dan kompetensi komite audit memberikan dampak signifikan terhadap manajemen laba. Disamping itu, efektifitas komite audit tidak memberikan dampak signifikan terhadap manajemen laba di perusahaan manufaktur yang tercatat di BEI.

This study investigates the effect a regime of mandatory audit firm rotation would have on audit quality in an Australian setting. Using two measures of audit quality, being the propensity to issue a going-concern report and the level of discretionary accruals, the study examines the switching patterns of clients in their current voluntary switching capacity, and the levels of audit quality. We find that audit quality increases with audit firm tenure, when proxied by the propensity to issue a going concern opinion, and is unaffected when proxied by the level of discretionary accruals. We conclude that given the additional costs associated with switching auditors there are minimal, if any, benefits of mandatory audit firm rotation. Other initiatives to address concerns about auditor independence and audit quality therefore need be considered before imposing mandatory audit firm rotation.

Independence is the primary justification of the existence, and thus the hallmark of the auditing profession. It is recognized as the primary attribute to be maintained by auditors in all circumstances. This study attempts to explore the determinants of auditor independence as perceived by Malaysian accountants using a self-administered mail survey. It was evidenced from the survey that size of audit fees is the most important factor, followed by competition, size of audit firm, tenure, provision of management advisory service and finally audit committee. More specifically, the study indicates that (1) larger size of audit fees, (2) audit firms operating in a higher level of competitive environments, (3) smaller audit firms, (4) audit firms serving a given client over a longer duration, (5) audit firms providing MAS, and, (6) the non-existence of an audit committee, are perceived as having a higher risk of losing independence. This study provides a basis for the profession to establish policies relating to auditor independence. Also, it may assist policy makers and other relevant international accounting agencies in their attempt towards the international harmonization of auditing standards. The major contribution of this paper is that it supplies recent evidence on factors influencing auditor independence from the viewpoint of Malaysian accountants.

Objective – The purpose of this research is to analyze the effect of growth, leverage, fixed asset turnover, profitability, firm size, firm age, industry, audit quality, and auditor independence toward earnings management. Methodology/Technique – The population of this research consist of various sectors of non-financial companies that were listed on the Indonesian Stock Exchange (IDX) between 2013 and 2015. The research uses three recent years of data and tests variables that have not been used by prior research. The sample was chosen by using a purposive sampling method. The hypothesis is tested using multiple regression with an SPSS program to investigate the influence of each independent variable to earnings management. Findings – The research results show that return on assets influences earnings management and growth, leverage, fixed asset turnover, profitability, firm size, firm age, industry, audit quality, and auditor independence do not influence earnings management. Novelty – The study supports that the manager in a company will engage in earnings management to receive a bonus from investors because they have received a higher profit.

We review accounting and finance research on corporate governance (CG). In the course of our review, we focus on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and finance scholars, and suggest ways to deal with it. Given the advent of large commercial CG databases, we also stress the importance of how CG is measured and in particular, the construction of CG indices, which should be sensitive to local institutional arrangements, and the need to capture both internal and external aspects of governance. The 'stickiness' of CG characteristics provides an additional challenge to CG scholars. Better theory is required, for example, to explain whether various CG practices substitute for each other or are complements. While a multidisciplinary approach to developing better theory is never without its difficulties, it could enrich the current body of knowledge in CG. Despite the vastness of the existing CG literature, these issues do suggest a number of avenues for future research.

We report on a questionnaire survey of audit firms and listed companies in the Kingdom of Bahrain to investigate the perceptions on the issue of auditors' independence with regard to rendering non-audit services (NAS). Our survey results of auditors and client executives support the proposition that independence is impaired if the auditor also renders non-audit services. However, most respondents from both groups indicated that NAS provided by company auditors affects the auditor independence to a limited extent only, and opine that such services should not be prohibited. Most listed companies obtain NAS from their company auditors, but the NAS fee ratio to audit fees is not high. Auditors and listed companies perceive that independence is not at all compromised or tends to be compromised to a limited extent for 15 types of NAS. The perceptions differed based on the size, non-audit fees and foreign operations for some of the NAS.

The present study investigates the determinants of internal audit outsourcing using survey data on 99 companies listed on the Australian Stock Exchange, where 54.5 per cent fully rely on in-house facilities and 45.5 per cent outsource some or all of their internal audit function. Results from logistic regression analyses suggest that internal audit outsourcing is associated with perceived cost savings and the technical competence of the external provider. For a subsample of firms that have previously undertaken internal audit activities before outsourcing, contrary to expectations, the larger the organization the greater the propensity to outsource. In addition, smaller firms are found to be adopting internal audit for the first time, through outsourcing. These results suggest that internal audit outsourcing is an expanding business opportunity for professional accountants; but with 75 per cent of firms outsourcing to their external auditor, there are implications for external auditor independence.

The "Institutions of Accountability" (IOA) are considered as important instruments for ensuring horizontal accountability and of these, the role played by the Supreme Audit Institutions (SAIs) is particularly important. These SAIs are set up based on the constitutional and legal framework of countries and they help the legislatures to enforce accountability, reduce fiduciary risk and measure the outcome of different programs. Even though the SAIs are supposed to be "autonomous" and free from all types of political pressure, while performing their roles and responsibilities, these institutions have to interact with different political actors. As a result of this interaction, the SAIs, through concentrating on measuring the performance of different government programs/ agencies, have started playing an important role in the political/policy arena and this has made the SAIs more relevant in the political realm. Consequently, the SAIs are now facing a unique dilemma- whereas autonomy requires that the SAIs be completely independent from the political actors while performing its duties, relevance requires keeping close connection with these actors so that their recommendations are being implemented. In other words, if the institution concentrates too much on protecting its autonomy by maintaining its distance from the other political actors, it may fail in affecting the policies/programs as per its recommendations. On the other hand, if the institution focuses on being relevant in the policy arena by interacting with the political actor, it may find itself vulnerable to political demand or pressure and thereby, may lose its autonomy. This paper has attempted to capture the dynamics of the autonomy-relevance dilemma faced by the SAIs and explore the strategies adopted by these institutions in dealing with this. While doing that, it has made an effort to develop a theoretical framework as a way to begin unpacking the political relationships and roles played by SAIs throughout the world.

There has been much public, professional, regulatory and scholarly concern about auditor independence in recent times. Th is is because of the high incidence of corporate collapses and the role of the auditor as a watchdog. Although auditor independence depends on both fact and appearances, researchers and regulators focus on examin ing appearances of independence because of the inability to observe the auditors state of mind. These perceptions inform the confidence reposed on financial statements and consequently, efficiency of capital ma rkets. Inconsistencies in measuring auditor independence by using diverse proxies have resulted in conflict ing findings in evaluating the constituents of auditor independence. This paper proposes that auditor independence as defined by fact and appearances can and should be measured by regulatory and informed stakeholders in o rder to determine the confidence to be reposed on financial reports and audit quality. This can be achieved by assessing user perceptions and developing a perceived auditor independence rating (PAI) index based on identified constituents. The paper also proposes that the acceptability of the rating index to stakeholders can be evaluated to assess how stakeholders rate auditors' independence. Nine propositions are made to support and exa mine the proposed framework.