Evaluation of Internal Audit Standards as a Foundation for Carrying out and Promoting a Wide Variety of Value-Added Tasks-Evidence from Emerging Market

Shaban, Osama Samih; Barakat, None Abdallah

doi:10.3390/jrfm16030185

Cited by 3 publications

(5 citation statements)

References 19 publications

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“…The researchers did not discuss the disclosure regarding investment risk reserves or profit equalization reserves. Osama Samih and Abdallah Barakat (2023), paper aims to evaluate the effectiveness of internal audit standards as a foundation for carrying out and promoting a wide variety of value added-tasks in emerging markets. Three Jordanian telecommunications firms were the subject of the study.…”

Section: Literature Reviewmentioning

confidence: 99%

Implementation of Aaoifi Standard No.35 by Saudi Islamic Banks: Opportunities and Challenges

Barakat¹,

Samhan²,

Alsouri³

2023

J. Professional Business Review

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Purpose of the study: The research aims to study and analyze the reality of reserves in Islamic banks in light of Financial Accounting Standard No. 35 issued by AAOIFI in 2018. In addition to determining the accounting irregularities or errors, in the practice of accounting and disclosure related to reserves in Saudi Islamic banks. Theoretical Framework: The research is based on the financial standards of the Islamic banks. Recent financial crises have prompted increased attention from the international community on the need for domestic financial institutions to be strengthened in order to better withstand subsequent emergencies. To ensure national and international financial stability, standards have been developed and implemented to encourage better policies and stronger institutional and market foundations. The international standards community's initiatives provide a comprehensive approach to promote the financial standards of the Islamic banks. It is crucial that self-assessments be supplemented with an impartial external check on conformity with standards. Design/Methodology/Population: The researchers applied the inductive analytical approach for evaluating the financial standards of the Islamic banks. The study population consists Islamic banks In Saudi Arabia: Bank Albilad, Al-Rajhi Bank, and Alinma Bank. The research analyzed the financial statements of three Islamic banks. Findings: The research concluded that all Saudi Islamic banks do not apply the accounting standards issued by AAOIFI. These bank's financial statements do not reflect the reality of their financial position, because they only apply traditional accounting standards. The Saudi Islamic banks do not apply the accounting standard issued by AAOIFI Standard No.35. The reasons behind the non-application of Islamic accounting standards issued by the AAOIFI in Saudi Islamic banks are the Saudi Banking Law and the instructions of the Saudi Central Bank. In addition, shareholders in Islamic banks bear all reserves and provisions. Research, Practical and Social Implications: The research suggests that banking supervisory authorities in the Kingdom of Saudi Arabia have to take the necessary measures to amend the laws and instructions related to Islamic banks., and to follow up efforts by AAOIFI with central banks in the countries in which Islamic banks operate to oblige Islamic banks to the accounting standards issued by AAOIFI. Originality/Value: The research is unique in identifying the importance of the AAOIFI standards in improving the financial standards of the Islamic banks.

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Section: Literature Reviewmentioning

confidence: 99%

Implementation of Aaoifi Standard No.35 by Saudi Islamic Banks: Opportunities and Challenges

Barakat¹,

Samhan²,

Alsouri³

2023

J. Professional Business Review

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“…According to Shaban and Abdallah (2023), internal auditing is an impartial, independent assurance and consulting activity that adds value and enhances an organization's operations. By providing a methodical, disciplined approach to assess and enhance the efficacy of risk management, control, and governance procedures, it aids an organisation in achieving its goals.…”

Section: Internal Audit Standardsmentioning

confidence: 99%

“…Being independent means not being subjected to situations that might compromise the internal audit activity's ability to carry out its duties in an unbiased manner. The Chief Audit Executive, who oversees the audit department, has direct and unrestricted access to senior management and the board in order to get the degree of freedom needed to carry out the obligations of the internal audit activity (Shaban & Abdallah, 2023). A relationship of dual reporting can help achieve this.…”

Section: Internal Audit Standardsmentioning

confidence: 99%

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Internal Audit Practices and Financial Reporting Quality of County Governments in Kenya

WANJA,

IBRAHIM, PhD

2023

strategicjournals.com

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The purpose of the study was to establish the effect of audit quality practices on financial reporting quality of county governments. This study was grounded on agency theory, theory of inspired confidence, policeman theory of auditing and upper echelons theory. The study targeted six Coastal counties of Mombasa, Kilifi, Lamu, Kilifi, Tana River and Taita Taveta county governments which formed the unit of analysis for the study. A sample of 120 respondents was chosen using Slovins formula. Stratified sampling technique was used to divide counties in to departments then simple radom sampling technique was used to apportion sample for each department selected. The study utilized both primary data and secondary data. The study conducted pilot test before data collection to test reliability and validity of data collection instruments. The collected data was analysed, summarized and tabulated by use of SPSS software version 26. Descriptive analysis and inferential statistics were the data analysis techniques used. Data was presented in tables for ease of understanding. The correlation results showed that all the internal audit practices constructs in the study had a moderate positive relationship with financial reporting quality in county governments. Regression results showed that coefficient of determination (r2) was 0.523 which means that the constructs employed explained 52.3 per cent variation in financial reporting quality in county governments. ANOVA results showed that the model was significant in explaining the relationship between the study variables. The study concluded that the county governments' audit function objective is well spelled out to the internal auditors prior to audit process and the broad purpose is communicated to the entire county functions. It was concluded the county audit committee members are trained on auditing. Also the audit committee members have notable experience on auditing. The researcher recommends that the county governments should assure independence of audit team. This could be achieved by providing an independent committee which would handle audit team remuneration. The selection of audit team should be through competitive process as this would ensure independence. The study recommends that the counties should establish investigative audit team to shadow conventional audit team which should be autonomous from county leadership.

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“…3) Limited Availability of Expertise and Skilled Professionals: Companies need more expertise and skilled professionals in internal auditing (Shaban & Barakat, 2023). Internal auditing requires professionals with a strong understanding of risk management, controls, and financial processes.…”

Section: Limitations and Further Researchmentioning

confidence: 99%

Research on Voluntary Internal Audit of Irish Business

Zhao,

Zhao

2023

TEL

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Internal audit provides independent assurance regarding corporate risk management, internal control, and compliance and is a crucial component of the corporate governance framework. In contrast to auditing requirements in other nations, voluntary internal auditing has become integral to management decision-making in Irish businesses. The paper examines the internal and external factors and motivations that have contributed to the adoption of voluntary audits by Irish companies, analyses the impact of voluntary internal audits on Irish companies and the current challenges they face, and suggests that domestic companies, whether listed or not, should take the initiative to introduce voluntary internal audit systems.

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Evaluation of Internal Audit Standards as a Foundation for Carrying out and Promoting a Wide Variety of Value-Added Tasks-Evidence from Emerging Market

Cited by 3 publications

References 19 publications

Implementation of Aaoifi Standard No.35 by Saudi Islamic Banks: Opportunities and Challenges

Implementation of Aaoifi Standard No.35 by Saudi Islamic Banks: Opportunities and Challenges

Internal Audit Practices and Financial Reporting Quality of County Governments in Kenya

Research on Voluntary Internal Audit of Irish Business

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