Describes how audit reports issued by the General Accounting Office(GAO) can be used to teach internal auditing students not only aboutaudit reports, but the wide subject‐matter…
Abstract
Describes how audit reports issued by the General Accounting Office (GAO) can be used to teach internal auditing students not only about audit reports, but the wide subject‐matter examined by internal auditors. Audit reports are available free from the GAO. Details how students learn by comparing the GAO reports with the recommendations in textbooks and journal articles.
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Dale L. Flesher, Gary John Previts and Andrew D. Sharp
This paper contributes to the literature of accountability and ethics by providing historical perspective by way of archival discovery of original, primary documentation as to…
Abstract
This paper contributes to the literature of accountability and ethics by providing historical perspective by way of archival discovery of original, primary documentation as to corporate practices and behaviors of an early major U.S. corporation during the period 1849–1862. The authors provide the results of examination and analysis of surviving corporate records.
The challenges to appropriate behavior and the application of stewardship principles with regard to the custody of property and the sanctions imposed for transgressions are all identified from primary corporate documents and hand-written minutes books of the board of directors of the Mobile & Ohio Railroad during the period. The de facto development of a corporate code of conduct enumerated by the board provides an early example of explicit corporate governance guidance. This unique discovery informs contemporary understanding of ethical issues identified in the accountability literature by adding the perspective of management experiences from over 150 years ago.
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Most small businesses today could probably benefit from a management audit of the firm's long‐term financial affairs. In large corporations, internal auditors generally have free…
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Most small businesses today could probably benefit from a management audit of the firm's long‐term financial affairs. In large corporations, internal auditors generally have free rein to audit all operations—including the activities of the corporate treasurer and the controller's department. Such audits involve not only the financial aspects of operations, but the day‐to‐day operating aspects as well. Internal audits of operations are typically called operational audits in the United States and value‐for‐money audits in the countries of the British empire. “Value‐for‐money audits” is probably the best name because the objective of the auditors is to point out ways that a department can save money or enhance revenues. Now it would be nice if small businesses had internal auditors to conduct value‐for‐money audits, but such is not the case. Most small companies do not have internal auditors. However, there is another alternative. The owner or manager of a small business can conduct the audit on sort of a do‐it‐yourself basis. Although every department could possibly benefit from such an audit, it is the long‐term financial management of the organization that might profit the most from a value‐for‐money audit.
Alexandra L. Ferrentino, Meghan L. Maliga, Richard A. Bernardi and Susan M. Bosco
This research provides accounting-ethics authors and administrators with a benchmark for accounting-ethics research. While Bernardi and Bean (2010) considered publications in…
Abstract
This research provides accounting-ethics authors and administrators with a benchmark for accounting-ethics research. While Bernardi and Bean (2010) considered publications in business-ethics and accounting’s top-40 journals this study considers research in eight accounting-ethics and public-interest journals, as well as, 34 business-ethics journals. We analyzed the contents of our 42 journals for the 25-year period between 1991 through 2015. This research documents the continued growth (Bernardi & Bean, 2007) of accounting-ethics research in both accounting-ethics and business-ethics journals. We provide data on the top-10 ethics authors in each doctoral year group, the top-50 ethics authors over the most recent 10, 20, and 25 years, and a distribution among ethics scholars for these periods. For the 25-year timeframe, our data indicate that only 665 (274) of the 5,125 accounting PhDs/DBAs (13.0% and 5.4% respectively) in Canada and the United States had authored or co-authored one (more than one) ethics article.
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Dale L. CPA Flesher Ph. and CMA CIA
An operational audit (or value‐for‐money audit) is an organized search for ways of improving efficiency and effectiveness. Although internal auditors have traditionally performed…
Abstract
An operational audit (or value‐for‐money audit) is an organized search for ways of improving efficiency and effectiveness. Although internal auditors have traditionally performed most operational audits, such audits are also conducted by external auditors and by company managers who wish to make self‐audits. Whoever performs an operational audit, the objective is to assist managers in performing their daily functions more effectively and economically. In effect, an operational audit is an early warning system for the detection of potentially destructive problems. Traditionally, operational audits have been conducted by means of a questionnaire interview of departmental employees. Virtually all large companies conduct operational audits in their major production and service departments. However, working capital management has often been ignored in these audits. Perhaps this oversight is caused by the view that the controllership and treasury functions are high level departments that are not susceptible to scrutiny by internal auditors. Alternatively, the oversight may be attributable to the feeling that there is little standardization of duties among controllers and treasurers in the management of working capital. Whatever the reason, this article is intended to end the oversight. An operational audit can lead to better management of working capital in the same way that it can lead to better management of a production area. The questionnaire in Exhibit 1 can be used by internal auditors, or by a treasurer who merely wants to perform a self‐audit of his or her own department's efficiency and effectiveness.
Dale L. Flesher, William D. Samson and Gary John Previts
Evidence of audit committee activity in the formative years of the Baltimore & Ohio (B&O) Railroad indicates that control and reporting activity developed long before the…
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Evidence of audit committee activity in the formative years of the Baltimore & Ohio (B&O) Railroad indicates that control and reporting activity developed long before the existence of regulatory mandate or the external auditing function. This is the earliest example of such an organized and continuing activity in American business history. With no previous business experience to model this enterprise, the organizers of the corporation put in place an audit committee of directors as a control device to safeguard assets and ensure proper handling of cash receipts and disbursements. Research into primary materials establishes that the committee not only performed regular routine audits of the “treasurer’s report,” but also identified and addressed critical problems of control and payment weaknesses. The discovery of the function of value‐for‐money (VFM) auditing by a committee of directors establishes historical context for today’s audit process and audit committee. Because the B&O was such an important entity, it influenced other railroads; and the railroad industry, in turn, greatly influenced the development of modern American businesses during the Industrial Revolution.
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Tommie Singleton and Dale L. Flesher
In 2002, The Institute of Internal Auditors (IIA) observed the 25th anniversary of the publication of its first Systems, Auditability, & Control (SAC) study. This paper reviews…
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In 2002, The Institute of Internal Auditors (IIA) observed the 25th anniversary of the publication of its first Systems, Auditability, & Control (SAC) study. This paper reviews the development of the SAC projects and their impact on Information Systems (IS) auditing in particular. Three different research methodologies were used for collecting the data for this research. First, a rigorous literature review was conducted. Second, an oral‐history methodology was used to collect data via interviews. Third, notes and minutes from many early committee meetings of IIA, including the SAC Committee, were studied. The early years (1954‐1977) saw a dearth of related literature. Thus individual accountants and auditors found it difficult to acquire or gather information on emerging issues. The Systems, Auditability, & Control (SAC) study published in 1977 was one of the major attempts to codify IS auditing knowledge. This study has been followed up by three other SAC projects in 1991, 1994, and 2001. These SAC projects have provided some of the best guidance for IS auditors over these last 25 years. From the beginning of IS auditing, there has been a continued acceleration of technology. In particular, the audit process has been impacted by the proliferation of microcomputers.
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Dale L. Flesher and Jeffrey S. Zanzig
This paper outlines the results of a survey designed to compare the opinions of internal auditors to one class of audit customers – namely management accountants. To function…
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This paper outlines the results of a survey designed to compare the opinions of internal auditors to one class of audit customers – namely management accountants. To function effectively, internal auditors and the customers of audit services should possess a similar understanding of what makes internal auditing a value‐added activity. Failure to reach this understanding could result in the perception that internal audit is simply an obstacle to achieving production objectives. This can result in underutilized audit services and ignored audit recommendations. Fortunately, internal auditors and management accountants have similar views, but there are a few areas of difference that should be addressed by internal auditors.
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John B. Duncan, Dale L. Flesher and Morris H. Stocks
The concept of internal control is just as relevant to churches as it is to profit seeking organizations. Inadequate internal controls can hinder the management responsibilities…
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The concept of internal control is just as relevant to churches as it is to profit seeking organizations. Inadequate internal controls can hinder the management responsibilities of church officers and employees and place them in a position where they may be tempted to engage in questionable activities and accounting practices, or could subject individuals to unwarranted accusations of such activities. This study was designed to evaluate the effects of church size as well as the polity and hierarchical structure of denominations on systems of internal control. A questionnaire was used to collect data regarding internal controls currently in place in churches. The internal control evaluation scores were found to be significantly different based on church size. Three major denominations with different types of church polity and differing hierarchical structures were included in the study. The internal control evaluation scores were found to be significantly different based on denomination. This suggests that the polity and hierarchical structure of a denomination affect the quality of a local church’s system of internal control.