Template-Type: ReDIF-Article 1.0 Author-Name: Ismail Adelopo Author-X-Name-First: Ismail Author-X-Name-Last: Adelopo Author-Name: Yinusa Ganiyu Olumuyiwa Author-X-Name-First: Yinusa Ganiyu Author-X-Name-Last: Olumuyiwa Author-Name: Ibrahim Rufai Author-X-Name-First: Ibrahim Author-X-Name-Last: Rufai Title: The impacts of multiple large ownership structure on board independence Abstract: The determinants of the composition of corporate boards remain inconclusive. This study investigates the impacts of multiple large ownership structure on board independence for a sample of UK listed companies. Using multiple regression analysis, and controlling for endogeneity, the study shows that the larger the difference in shareholding between the first and second largest owners, the less independent is the board. Monitoring efficiency is enhanced the higher the ratio of the shareholding of the second largest shareholder relative to the shareholding of the first largest shareholder. These findings have significant implications for board monitoring and corporate governance regulations. Journal: Int. J. of Accounting, Auditing and Performance Evaluation Pages: 1-30 Issue: 1 Volume: 15 Year: 2019 Keywords: multiple large ownership structure; MLS; corporate governance; board independence. File-URL: http://www.inderscience.com/link.php?id=96732 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:ijaape:v:15:y:2019:i:1:p:1-30 Template-Type: ReDIF-Article 1.0 Author-Name: Issa Dawd Author-X-Name-First: Issa Author-X-Name-Last: Dawd Author-Name: Lanouar Charfeddine Author-X-Name-First: Lanouar Author-X-Name-Last: Charfeddine Title: Effect of aggregate, mandatory and voluntary disclosure on firm performance in a developing market: the case of Kuwait Abstract: This paper examines the relationship between corporate disclosure and firm performance for the case of listed companies in the Kuwait Stock Exchanges (KSE). Our sample contains 51 non-financial firms that represent 42% of the total number of listed companies in Kuwait. The empirical results show that the linear relationship between aggregate, mandatory and voluntary disclosure and firm performance is not significant, while there is strong evidence for nonlinear relationship between the disclosure types and firm performance proxies. Specifically, we found strong evidence of U-shaped relationship between corporate disclosure and firm performance. Moreover, we found that the relationship between disclosure and firm performance is not governed by the firm size variable. Journal: Int. J. of Accounting, Auditing and Performance Evaluation Pages: 31-56 Issue: 1 Volume: 15 Year: 2019 Keywords: aggregate disclosure; mandatory disclosure; voluntary disclosure; firm performance; Kuwait; disclosure index; regression analysis. File-URL: http://www.inderscience.com/link.php?id=96735 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:ijaape:v:15:y:2019:i:1:p:31-56 Template-Type: ReDIF-Article 1.0 Author-Name: Jan Svanberg Author-X-Name-First: Jan Author-X-Name-Last: Svanberg Author-Name: Peter Öhman Author-X-Name-First: Peter Author-X-Name-Last: Öhman Title: Auditors' issue contingency of reduced audit quality acts: perceptions of managers and partners Abstract: This study examines how managers and partners in audit firms perceive the moral intensity of various reduced audit quality (RAQ) acts, and whether perceived moral intensity affects the likelihood of these acts being committed. We surveyed managers and partners employed by audit firms operating in Sweden, measuring their perceptions of the moral intensity of seven RAQ acts using Jones' (1991) moral intensity scale and their self-reported frequencies of these acts. The study finds that managers and partners regard RAQ acts as morally serious, and that the moral intensity of an RAQ act is negatively related to the frequency of the act's occurrence for three of the seven acts. This suggests that managers' and partners' moral intensity perceptions do not unequivocally discourage auditors from committing these offences. Journal: Int. J. of Accounting, Auditing and Performance Evaluation Pages: 57-88 Issue: 1 Volume: 15 Year: 2019 Keywords: auditing; reduced audit quality acts; RAQ; moral intensity; moral issues; ethical judgments. File-URL: http://www.inderscience.com/link.php?id=96740 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:ijaape:v:15:y:2019:i:1:p:57-88 Template-Type: ReDIF-Article 1.0 Author-Name: Awad Ibrahim Author-X-Name-First: Awad Author-X-Name-Last: Ibrahim Author-Name: Murya Habbash Author-X-Name-First: Murya Author-X-Name-Last: Habbash Author-Name: Khaled Hussainey Author-X-Name-First: Khaled Author-X-Name-Last: Hussainey Title: Corporate governance and risk disclosure: evidence from Saudi Arabia Abstract: This study investigates the influence of corporate governance on risk disclosure level, in Saudi Arabia. We examine 408 annual reports of Saudi non-financial-listed firms during 2012-2015. The results show that CEO-Chairperson separation, audit committee effectiveness, state ownership, firm complexity, size and profitability positively affect risk disclosure, while we find no significant correlations for board independence, institutional ownership, auditor type, leverage, and firm age. The study is important because it fills gaps in the disclosure literature, especially in developing and Arab countries, and responds to calls in previous studies, such as Dobler et al. (2011), Ntim et al. (2013) and Moumen et al. (2015), that recommend investigating the corporate governance determinants of risk disclosure in these contexts. The results are of interest to accounting setters and governance regulators. The study also provides an evaluation of the Saudi governance code formally applied in 2007. Journal: Int. J. of Accounting, Auditing and Performance Evaluation Pages: 89-111 Issue: 1 Volume: 15 Year: 2019 Keywords: risk disclosure; corporate governance; ownership structure; content analysis; Saudi Arabia. File-URL: http://www.inderscience.com/link.php?id=96748 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:ijaape:v:15:y:2019:i:1:p:89-111 Template-Type: ReDIF-Article 1.0 Author-Name: Hazem Ramadan Ismael Author-X-Name-First: Hazem Ramadan Author-X-Name-Last: Ismael Title: The association between firm characteristics and the quality characteristics of the internal audit function in the UK: an agency perspective Abstract: This study investigates firm characteristics that may affect the IAF's quality characteristics: size, independence, methodology, and competence. Its motivation is that a firm's agency and economic costs can affect its way to invest in the IAF quality. In this study, a postal questionnaire survey was sent to the head of internal audit (HIA) in 213 UK non-financial companies with in-source IAF, and archival data were collected from the respondent companies' annual reports. The study found that a firm's size and the proportion of cash flows from its operations are positively associated with the IAF's quality characteristics, a suggestion that a high quality IAF is an important way of compensating for the direct loss of control and of managing internal agency risks. In addition, it found evidence that having a high quality IAF is a costly process; the level of debt had a significant negative association with the IAF's quality characteristics. Furthermore, the supporting OLS regression revealed a positive significant association between the effectiveness of the audit committee and the quality characteristics of the IAF. This study has important implications for both practice and future internal auditing research and provides a composite measure that can be used to assess IAF quality. Journal: Int. J. of Accounting, Auditing and Performance Evaluation Pages: 113-143 Issue: 2 Volume: 15 Year: 2019 Keywords: internal audit quality; corporate governance; audit committee; risk management; internal control; agency theory; the UK. File-URL: http://www.inderscience.com/link.php?id=99133 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:ijaape:v:15:y:2019:i:2:p:113-143 Template-Type: ReDIF-Article 1.0 Author-Name: Hsiao-Lun Lin Author-X-Name-First: Hsiao-Lun Author-X-Name-Last: Lin Author-Name: Ai-Ru Yen Author-X-Name-First: Ai-Ru Author-X-Name-Last: Yen Title: Auditor sanctions and the management of riskiness of audit client portfolios Abstract: This study examines the effect of auditor sanctions imposed on the riskiness of auditors' client portfolios. We identify auditors/audit firms that were subject to disciplinary actions by the China Securities Regulatory Commission (CSRC) and empirically examine the change in the riskiness of their client portfolios after the sanctions were imposed. The empirical results suggest a decrease in the overall clientele financial risk, measured by both aggregate bankruptcy measures and individual financial risk measures, after enforcement releases were issued. Moreover, we find that the decrease in client portfolios' risk is greater when a disciplinary action is imposed in the period of higher legal liability than when it is imposed in the period of lower legal liability. This study contributes to prior studies on the effects of audit failure on auditors' behaviour by examining the association between auditor sanctions and the management of audit client portfolios risk. Journal: Int. J. of Accounting, Auditing and Performance Evaluation Pages: 144-167 Issue: 2 Volume: 15 Year: 2019 Keywords: auditor sanction; legal liability; client risk; disciplinary action. File-URL: http://www.inderscience.com/link.php?id=99141 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:ijaape:v:15:y:2019:i:2:p:144-167 Template-Type: ReDIF-Article 1.0 Author-Name: Laurent Lazar Author-X-Name-First: Laurent Author-X-Name-Last: Lazar Title: Manager's misinterpretation of goodwill impairments: evidence from German listed companies Abstract: This study investigates the reported goodwill of German listed companies between 2009 and 2014 and focuses on opportunistic behaviour by managers applying the impairment only approach (IOA) in accordance with IAS 36. Contributing to the literature on goodwill accounting, this investigation examines changes of CEOs and companies' financial situation, showing that the profit trend is an indicator of goodwill impairments. The results also indicate that new CEOs show a tendency for big bath accounting when taking office and therefore write off more goodwill than incumbent CEOs. Moreover, managers are more likely to impair goodwill when current earnings are negative, especially after decreases in earnings above the annual average. On the other hand, managers tend to avoid goodwill impairments when earnings decrease significantly but still remain positive. Journal: Int. J. of Accounting, Auditing and Performance Evaluation Pages: 168-190 Issue: 2 Volume: 15 Year: 2019 Keywords: impairment only approach; IOA; goodwill; big bath accounting; income smoothing; earnings management; IAS 36. File-URL: http://www.inderscience.com/link.php?id=99144 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:ijaape:v:15:y:2019:i:2:p:168-190 Template-Type: ReDIF-Article 1.0 Author-Name: Irina Alexeyeva Author-X-Name-First: Irina Author-X-Name-Last: Alexeyeva Title: Individual auditor competences and the pricing of audit services Abstract: This study examines whether partner special competencies, such as industry expertise, public company expertise and client-specific expertise, are associated with a fee premium. It further investigates whether the association between partner competencies and audit fees is dependent on gender. Using a sample of 225 public Swedish companies audited from 2006-2015 (1461 firm-years) by 182 (33 females and 149 males) partners affiliated to Big 4 audit firms, partner industry expertise and client-specific expertise are found to be associated with higher audit fees. A further finding is that partners with special competencies are predominantly men. However, male public company specialists receive significantly lower audit fees than their female counterparts. Taken together, the results indicate that partner special competence is valued by clients. Journal: Int. J. of Accounting, Auditing and Performance Evaluation Pages: 191-218 Issue: 2 Volume: 15 Year: 2019 Keywords: audit fees; industry expertise; public company expertise; tenure; engagement partner; gender. File-URL: http://www.inderscience.com/link.php?id=99147 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:ijaape:v:15:y:2019:i:2:p:191-218 Template-Type: ReDIF-Article 1.0 Author-Name: Hossein Sayyadi Tooranloo Author-X-Name-First: Hossein Sayyadi Author-X-Name-Last: Tooranloo Author-Name: Pedram Azizi Author-X-Name-First: Pedram Author-X-Name-Last: Azizi Title: Ethical values in auditing from Islamic perspective Abstract: This study aimed to derive the model of ethical values that concern auditing from the Islamic viewpoint using the interpretative structural modelling (ISM) approach. After reviewing the related literature and semi-structured interviews with auditing experts, 15 auditing-related ethical values from the Islamic perspective were identified. The ISM method was then used to determine the levels and priorities of identified values and their relationships with each other. Finally, a MICMAC diagram analysis was performed to determine the driving power and dependence power of the values. In the MICMAC analysis, the ethical value independence was found to have a strong driving power (15) and a weak dependence power (6), and thus recognised as the cornerstone of the audit profession. The value objectivity in investigation and avoiding preconception was found to have a weak driving power (6) and a strong dependence power (15), reflecting a strong dependence on its lower levels. Journal: Int. J. of Accounting, Auditing and Performance Evaluation Pages: 278-312 Issue: 3 Volume: 15 Year: 2019 Keywords: ethical values; audit; Islam; interpretative structural modelling; ISM. File-URL: http://www.inderscience.com/link.php?id=102242 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:ijaape:v:15:y:2019:i:3:p:278-312 Template-Type: ReDIF-Article 1.0 Author-Name: Osama A.E. Mah'd Author-X-Name-First: Osama A.E. Author-X-Name-Last: Mah'd Author-Name: Ghassan H. Mardini Author-X-Name-First: Ghassan H. Author-X-Name-Last: Mardini Author-Name: Manal M. Ali Author-X-Name-First: Manal M. Author-X-Name-Last: Ali Title: The relationship between evidence characteristics and audit efficiency and effectiveness: evidence from Middle Eastern countries Abstract: This paper investigates the relationship between three evidence characteristics (namely, sufficiency, reliability, relevance) and audit quality. We employ a multi-method approach that is broken down into two tools; questionnaires and interviews with 103 external auditors working in Jordan, Saudi Arabia and the United Arab Emirates. The current study adopted the decision usefulness theory as a theoretical framework. The main finding of the study revealed that there is a significant relationship between sufficiency and audit quality (both the efficiency and effectiveness of the audit). Interestingly, the results show that reliability and relevance are associated with audit effectiveness, but did not show significant association with audit efficiency. The contribution of the current study is that it increases awareness of the evidence characteristics and their impact on the audit quality. This kind of awareness aids the decision makers to have a better vision that enables them to take sufficient, relevant and reliable decisions. Journal: Int. J. of Accounting, Auditing and Performance Evaluation Pages: 219-240 Issue: 3 Volume: 15 Year: 2019 Keywords: audit evidence; efficiency; effectiveness; sufficiency; reliability; and relevance; Middle East. File-URL: http://www.inderscience.com/link.php?id=102245 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:ijaape:v:15:y:2019:i:3:p:219-240 Template-Type: ReDIF-Article 1.0 Author-Name: Mohamed Sherif Author-X-Name-First: Mohamed Author-X-Name-Last: Sherif Author-Name: Laura Galloway Author-X-Name-First: Laura Author-X-Name-Last: Galloway Author-Name: Hajer Zarrouk Author-X-Name-First: Hajer Author-X-Name-Last: Zarrouk Title: Performance and entrepreneurial orientation in SMEs: the case of Abu Dhabi Abstract: The paper explores entrepreneurial orientation (EO) in SMEs in the Middle Eastern state of Abu Dhabi in the United Arab Emirates. We hypothesise that emerging market context and unique UAE business structures will impact the expression and effects of the five dimensions of EO. Using OLS and GMM techniques, our study shows that innovation, risk-taking, pro-activeness and competitive aggressiveness do not correlate positively with performance, but autonomy does. By studying EO in a unique region and amongst SMEs we contribute to the implementation and development of theory in alternative business contexts. We suggest the EO dimensions co-depend, with autonomy a capstone dimension in SMEs upon which the others rely. At a local level, we suggest policy might take steps to encourage autonomy by reducing ownership restrictions, and improve the institutional environment to facilitate risk-taking and, in turn, the other EO dimensions. Journal: Int. J. of Accounting, Auditing and Performance Evaluation Pages: 241-261 Issue: 3 Volume: 15 Year: 2019 Keywords: performance evaluation; entrepreneurial orientation; SMEs; emerging economy; Abu Dhabi; business structures. File-URL: http://www.inderscience.com/link.php?id=102247 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:ijaape:v:15:y:2019:i:3:p:241-261 Template-Type: ReDIF-Article 1.0 Author-Name: Javad Izadi Author-X-Name-First: Javad Author-X-Name-Last: Izadi Author-Name: Alireza Nazarian Author-X-Name-First: Alireza Author-X-Name-Last: Nazarian Author-Name: Jinfeng Ye Author-X-Name-First: Jinfeng Author-X-Name-Last: Ye Author-Name: Ali Shahzad Author-X-Name-First: Ali Author-X-Name-Last: Shahzad Title: The association between accruals and stock return following FRS3 Abstract: The purpose of this study is to investigate the correlation between accruals and stock return and further the quality of accounting accruals shown in financial statements for shareholders to predict their future returns. This study uses an inimitable location which is provided by FRS3 in the UK to highlight the well-documented accrual anomaly as important components of financial performance to help the users to understand the archived performance of a firm. Specifically, this paper focuses on the accrual anomaly phenomenon in the UK on the adoption of FRS No. 3 for a period from 2008 to 2017. Our result shows that stock returns can be predicted by accruals attributable to accounting misrepresentations. Generally, our findings support the information disclosure due to FRS No. 3. Also, the results are consistent with increased accounting disclosure to help investors protect themselves from inefficiencies and to encourage them to be aware of accurate stock prices in the market. Journal: Int. J. of Accounting, Auditing and Performance Evaluation Pages: 262-277 Issue: 3 Volume: 15 Year: 2019 Keywords: accruals; stock returns; FRS No. 3. File-URL: http://www.inderscience.com/link.php?id=102249 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:ijaape:v:15:y:2019:i:3:p:262-277