Forthcoming articles


International Journal of Accounting, Auditing and Performance Evaluation


These articles have been peer-reviewed and accepted for publication in IJAAPE, but are pending final changes, are not yet published and may not appear here in their final order of publication until they are assigned to issues. Therefore, the content conforms to our standards but the presentation (e.g. typesetting and proof-reading) is not necessarily up to the Inderscience standard. Additionally, titles, authors, abstracts and keywords may change before publication. Articles will not be published until the final proofs are validated by their authors.


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International Journal of Accounting, Auditing and Performance Evaluation (10 papers in press)


Regular Issues


  • The impacts of multiple large ownership structure on board independence   Order a copy of this article
    by Ismail Adelopo, Olumuyiwa Yinusa 
    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 analyses, 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.
    Keywords: multiple large ownership structure; corporate governance; board independence.

  • Effect of aggregate, mandatory, and voluntary disclosure on firm performance in developing markets: the case of Kuwait   Order a copy of this article
    by Issa Dawd, Lanouar Charfeddine 
    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, while the linear relationship between aggregate, mandatory, and voluntary disclosure and firm performance is not significant, we found strong evidence for a nonlinear relationship between the disclosure types and firm performance proxies. Specifically, we found strong evidence of a 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.
    Keywords: mandatory disclosure; voluntary disclosure; firm performance; Kuwait; disclosure index; regression analysis.

  • Auditors issue contingency of reduced audit quality acts: perceptions of managers and partners   Order a copy of this article
    by Jan Svanberg, Peter Öhman 
    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 acts 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.
    Keywords: auditing; reduced audit quality acts; moral intensity; moral issues; ethical judgements.

  • Corporate governance and risk disclosure: evidence from Saudi Arabia   Order a copy of this article
    by Awad Ibrahim, Murya Habbash, Khaled Hussainey 
    Abstract: This study investigates the potential influence of corporate governance, ownership structure and corporate characteristics on risk disclosure level, in a developing country, Saudi Arabia, in which there is a lack of research in this area. This study examines 408 annual reports of Saudi non-financial-listed firms during 2012-2015. We apply content and multiple regression analyses and use the number of the risk-related sentences as a proxy for risk disclosure level. The results indicate that the mean risk disclosure is 13 sentences with a minimum value of zero and a maximum value of 36 sentences. The results also show that CEO-Chairperson separation, audit committee effectiveness, state ownership, firm complexity, size, and profitability positively affect risk disclosure. However, we find no significant correlations for board independence, institutional ownership, auditor type, leverage, and firm age. This 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.
    Keywords: risk disclosure; corporate governance; ownership structure; content analysis; Saudi Arabia.

  • The association between firm characteristics and the quality characteristics of the internal audit function in the UK: an agency perspective   Order a copy of this article
    by Hazem Ismael 
    Abstract: This study investigates firm characteristics that may affect the internal audit function's (IAF) quality characteristics: size, independence, methodology, and competence. Its motivation is that a firms agency costs and economic costs can affect its way to invest in the quality characteristics of the IAF. Specifically, this study examines the association between the IAFs characteristics and the firms size, complexity, internal and external agency costs, and the existence of an effective audit committee. To do so, the study used two different methods of data collection: (1) sending a postal questionnaire survey to the Head of Internal Audit (HIA) in 213 UK non-financial companies with in-source IAF; and (2) collecting archival data about the survey respondents from their companies annual reports. the survey was completed and returned by 109 HIAs, a response rate of 51%. The associated companies data were collected from the annual reports and matched to each response. The study used univariate tests, multinomial logistic regression, and OLS regression (as a robustness test) to investigate the predicted relationships. The study provides strong evidence that a firms size and the proportion of cash flows from its operations are positively associated with the IAFs 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 quality characteristics. Furthermore, the results from the supporting OLS regression revealed also a positive significant association between the effectiveness of the audit committee and the quality characteristics of the IAF. This result may bring out the importance of having a quality IAF to help the audit committee to meet its governance duties. The results from this study have important implications on both practice and future research on internal auditing. It clarifies the factors that may affect the IAF characteristics, and provides a composite objective measure that can be used by future researchers to assess IAF quality characteristics. In addition, the governance regulations should explicitly focus more on highlighting the required characteristics of the IAF, and the IAFs organisational relationships, because these relationships significantly affect the quality of the IAF and hence its role as an internal governance mechanism.
    Keywords: internal audit; corporate governance; audit committee; risk management; internal control; agency theory.

  • The value of a voluntary audit in debt financing: evidence from small privately held companies   Order a copy of this article
    by Sanna Tervo, Annukka Jokipii 
    Abstract: This study examines the effects of voluntary audits on the quality of financial information and the cost of debt in small privately held companies using a sample of 5,254 observations spanning 2007-2012. Prior studies [see Blackwell et al. (1998), Minnis (2011) and Kim et al. (2011)] suggest that audited firms have a significantly lower cost of debt. In contrast to prior studies, our archival evidence shows that firms opting for a voluntary audit pay a slightly higher interest rate on their debt than do the unaudited firms among the set examined. This result is however supported by Niemi et al. (2012) who found that having a voluntary audit is positively associated with financial distress and by Dedman et al. (2014) who found that riskier companies are more likely to purchase voluntary audits.
    Keywords: voluntary audit; financial distress; financial statement; discretionary accruals; financial information; reliability; privately held companies; debt financing; financial information quality; interest rate; accounting; performance evaluation; Finland.
    DOI: 10.1504/IJAAPE.2018.10015585
  • Chief audit executives' perceptions of drivers of moral courage: Tunisian evidence   Order a copy of this article
    by Imen Khelil, Khaled Hussainey, Hédi Noubbigh 
    Abstract: A string of accounting-related scandals has revealed key shortcomings in internal auditor truthfulness. These scandals have led researchers, professional organisations and institutions to question causes of internal auditor silence and the failure of ethical guidelines. This study responds to these questions by revealing moral courage as the missing ingredient in internal auditor ethical instruction and as the tool needed for internal auditors to preserve their integrity and overcome their fears. Building on what is currently known of internal auditors and moral courage, this study sheds light on professional and ethical requirements placed on internal auditors to tell the truth, and it emphasises the role of moral courage in guiding their ethical behaviours. It also considers what must be known about the development of moral courage among internal auditors and seeks to identify the factors that promote internal auditors' moral courage through 30 structured interviews with chief audit executives.
    Keywords: internal auditor; management fraud; fear; silence; moral courage; ethical behaviour; telling the truth; Tunisia; chief audit executives; drivers of moral courage.
    DOI: 10.1504/IJAAPE.2018.10015586
  • Public perception of the role of accounting in a transition economy: the case of Russia   Order a copy of this article
    by Galina G. Preobragenskaya, Robert W. McGee, Iliya Komarev 
    Abstract: This paper explores the perceived role of accounting in Russia, a country transitioning from a post-socialist to a market economy. A survey was conducted to examine the public views on: 1) the main functions of accounting; 2) the primary role of users of financial statements; 3) the level of demand for financial information; 4) the perceived reliability of financial statements; 5) the importance of reliable financial information. Our results show that the Russian accounting system can be classified as macro-user oriented. Although accounting is perceived to serve chiefly management needs, the main purposes of financial reporting are perceived to be tax calculation and compliance with government reporting requirements, and the primary users of financial statements are supposed to be business owners and government. The public feels that financial statements lack reliability, and companies manage earnings downwards. The study identifies potential reasons for misreporting. The financial reporting reliability is perceived to have greater impact on the country's economy than on the person.
    Keywords: financial reporting; Russia; transition economy; opinion survey; performance evaluation; people perceptions; society; accounting.
    DOI: 10.1504/IJAAPE.2018.10015587
  • Value relevance of earnings and book value in India: significance of accounting reforms and intangible-intensity in an emerging market   Order a copy of this article
    by Pooja Kumari, Chandra Sekhar Mishra 
    Abstract: The study investigates the value relevance of earnings and book value on the Bombay Stock Exchange over 21 years of accounting regulation reforms in India from 1995 to 2015. In developed markets accounting information has lost its relevance due to shift in economies from tangible to intangible intensity. However, the relevance of accounting information in an emerging market increases with the improvements in accounting regulation and market environment. Thus, we also examined the effects of both accounting regulation reforms and intangible intensity on the relevance of earnings and book value in an emerging market. Results indicate that the relevance of the combined and incremental value of both earnings and book value is increased with the improvements in accounting regulation reforms in India. Furthermore, the intangible intensity is positively (negatively) significant to explain the change in the incremental explanatory power of earnings (book value).
    Keywords: accounting information; value relevance; emerging market; accounting regulation reforms; intangible intensity; India.
    DOI: 10.1504/IJAAPE.2018.10015588

Special Issue on: Contemporary Issues in Islamic Accounting and Finance Research

  • Ethical values in auditing from the Islamic perspective   Order a copy of this article
    by Hossein Sayyadi Tooranloo, Pedram Azizi 
    Abstract: This study aims to derive a model of ethical values that concern auditing from the Islam viewpoint using the Interpretative Structural Modelling (ISM) approach. ISM is a systematic and structured method for understanding the relationships between individually or collectively interdependent elements of a complex system. 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. MICMAC analysis facilitates further examination of the domain of effect of each study variable based on the obtained driving and dependence powers. In the MICMAC analysis, the ethical value Independence was found to have a strong driving power (15) and a weak dependence power (6), and is thus recognised as the cornerstone of the audit profession. Auditor independence is an essential element of users trust in the analysis of financial statements, and neglecting it neutralises the effect of many other values. 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. This suggests that neglecting other values severely undermines the objectivity of the audit.
    Keywords: ethical values; audit; Islam; interpretative structural modelling.