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In 2001, the US moved to regulate internal control reporting by management and auditors. While some jurisdictions have followed the lead of the US, many others have not. An important question, therefore, is the relevance of internal control to stakeholders. The more specific issue of the benefits of US-style regulation of internal control reporting is also topical. We review studies on the determinants of internal control quality and its economic consequences for stakeholders including investors, creditors, managers, auditors and financial analysts. We extend previous reviews by focusing on US studies published since 2013 as well as all non-US studies investigating IC quality including countries regulating IC disclosure as well as unregulated settings and both developed and developing economies. In doing so, we identify research questions where evidence remains mixed and new directions in which there are research opportunities.

Three main insights arise from our analysis. First, evidence on the economic consequences of internal control quality suggests that the quality of internal control can have a significant effect on decision making by users of financial information. Second, the results of research on the empirical association between ownership structure, certain board characteristics and internal control quality is generally mixed. Empirical evidence concerning the association between audit committee characteristics and internal control quality generally supports a positive and significant association. Finally, while studies in non-US jurisdictions are increasing, opportunities remain to explore the determinants and consequences of internal control in other jurisdictions. Our review provides evidence for policy makers of whether there are benefits from requiring management and auditors to report on internal control over financial reporting.

The purpose of this paper is to explain and develop a classification of cognitive structures (or typologies of thought), previously designated as spoke, chain and network thinking by Kinchin et al.

The paper shows how concept mapping can be used to reveal these conceptual typologies and endeavours to place the concept‐mapping method in the broader context of learning styles and learning theory.

The findings suggest that spoke structures are indicative of a naïve epistemology, or of “learning‐readiness”; chain structures are indicators of “goal‐orientation” and networks are indicators of expertise. Furthermore, change that comprises simple elaboration of existing spokes or chains is likely to be the result of surface learning styles and the emergence of networks indicative of deep learning. The utility of these different cognitive approaches is discussed.

The work is limited by the general lack of empirical testing, but the approach is presented as an important source of hypotheses for future research.

The practical implications of the research are considerable. First, concept mapping provides a framework for documenting and assessing understanding at “novice” and “expert” levels. Second, where definitive criteria can be developed from the learning styles literature, cognitive change in the course of learning can be evaluated to distinguish between deep versus surface or holist versus serialist approaches, for example.

The papers original and comprises a synthetic approach to the study of learning style and learning theory through the use of the concept‐mapping method. It has both practical and theoretical value because it suggests a new approach and is an important source of testable hypotheses.

This paper explores the value of financial statement auditing in the public sector. The study applies theory about auditing from the private sector as well as the public sector to explore ways in which public sector auditing can be expected to be valuable. It shows that there are a number of complementary explanations that can be applied to examine the value of public audit, including agency, signaling, insurance, management control, governance and confirmation explanations. The evidence from research and history is generally consistent with the agency and management control explanations. There is some support for the signaling and insurance explanations, while research evidence suggests that governance has differing impact in the public sector compared to the private. The confirmation hypothesis is also potentially relevant. Reviewing the history of the development of public sector auditing functions shows that at least some developments were consistent with explanations such as agency theory and management control. Auditing in the public sector is an area where more research is valuable. The paper concludes with a discussion of issues for further investigation.

New public management (NPM) has transformed the public sector auditing context, although in quite different ways. Further, investigations into NPM’s impact on public sector auditors and audit institutions have been largely unconnected, with the exception of the critical examination of performance audits. We investigate the question of how public sector auditors’ roles and activities have changed as a result of NPM and later reforms.

We examine and synthesise public sector audit research examining reforms since the year 2000. The research presented considers changes to external and internal public sector audits as well as the development of public sector audit institutions – known as supreme audit institutions (SAIs).

Considerable changes have occurred. Many were influenced by NPM, but others have evolved from the eco-system of accounting, auditing and public sector management. External auditors have responded to an increase in demand for accountability. Additional management and governance techniques have been introduced from the private sector, such as internal auditing and audit committees. NPM has also led to conflicting trends, particularly when governments introduced competition to public sector auditing by contracting out but then chose to centralise to improve accountability. There is also greater international influence now through bodies like the International Organisation of Supreme Audit Institutions (INTOSAI) and similar regional bodies.

NPM reforms and the eco-system have impacted public sector auditing. Sustainability reporting is emerging as an area requiring more auditing attention; auditors also need to continue to develop better ways to communicate with citizens. Further, research into auditing in non-Western nations and emerging technologies is also required, especially where it provides learnings around more valuable audit practices. Empirical evidence is required of the strengths and weaknesses of SAIs’ structural variety.

The purpose of this study is to examine the effect of internal audit function (IAF) use on earnings quality and external audit fees using empirical data collected from the New Zealand (NZ) setting.

Applying institutional theory as the underlying framework, this study examines an IAF’s ability to demonstrate legitimacy, which will shed light to the functions long-term survival. Using a unique data set from the NZ setting, which combines information obtained from “The Institute of Internal Auditors of New Zealand” with empirical firm data collected from publicly available sources, multivariate analysis is performed to test the prediction that IAF use is associated with earnings quality, measured using discretionary accruals, and external audit fees.

There is strong positive association between IAF use and external audit fees, which supports the complementary controls view, where better internal controls increase audit fees by increasing the demand for scope of external audit work. The authors find no significant relationship between IAF use and earnings quality, which is not entirely surprising.

The aim is to empirically test the IAF value proposition and to delve deeper into the black box of IAF value drivers. Given the size of the NZ economy and limitations of data availability, total sample size used in this study is relatively modest. However, the analysis does yield significant results. Apart from academic contribution to knowledge, this study offers a profound list of practical contributions. Practitioners will be interested to learn about the IAF value proposition from an empirical viewpoint. Senior management (SM) will obtain value from the outcomes when contemplating IAF investment and sourcing decisions. Regulators will be inherently interested in whether IAFs should be mandated.

The aim is to empirically test IAF value proposition and to delve deeper into the black box of IAF value drivers. To the best of the authors’ knowledge, this is the first NZ-based academic investigation which examines the relationship between IAF use and earnings quality. Apart from academic contribution to knowledge, this study offers a profound list of practical contributions. Practitioners will be interested to learn about the IAF value proposition from an empirical viewpoint. SM will obtain value from the outcomes when contemplating IAF investment and sourcing decisions. Regulators will be inherently interested in whether IAFs should be mandated.

This paper aims to describe a method of teaching that is based on Novak's concept‐mapping technique.

The paper shows how concept mapping can be used to measure prior knowledge and how simple mapping exercises can promote the integration of teachers' and students' understandings in ways that are meaningful.

The concept‐mapping method facilitates quick and easy measures of student knowledge‐change so that teachers can identify the parts of the curriculum that are being understood and those that are not. This is possible even among very large student groups in the 50‐minute slots that are allocated to so much teaching in higher education.

Concept mapping is discussed in the wider context of student learning style. The styles literature has been criticised because it tends to encourage undue labelling of people or behaviours. The approach described here also uses “labels” to typify learning (using the terms non‐learning and rote or meaningful learning to identify different qualities of change).

The difference in this approach is that terms are attached to empirical measures of learning outcome, not to personal or psychological styles. Concept mapping makes learning visible so that the actual quality of the learning that has occurred can be seen and explored. Using concept mapping in the course of teaching means that learning is no longer a complex and intractable process, measurable only by proxy, but an observable phenomenon.

Changes to the auditor’s report have been proposed and issued internationally to provide more relevant information to users and enhance the perceived value of financial statement audits. This paper aims to investigate the impact of audit reporting changes on audit quality and audit fees in the New Zealand context.

The authors examined audit quality measured by absolute abnormal accruals and audit fees for New Zealand listed companies.

The evidence suggests the enhanced audit reports were followed by an improvement in audit quality as proxied by a reduction in absolute abnormal accruals upon the adoption of the new audit reporting requirements. There was also a significant increase in audit fees.

Although the new auditor reporting requirements are associated with improvements in audit quality, such benefit does not come without cost.

The study provides evidence about the impact of this recent substantial reform to auditing.

The purpose of this paper is to discuss the increasing potential demand for meta-analysis studies in auditing. The paper includes a review of a new technique and meta-regression analysis, and explains its advantages in comparison to meta-analysis techniques used in prior auditing research. It also discusses opportunities for applying meta-analysis to auditing topics and potential pitfalls.

The paper provides a review and commentary on meta-analysis techniques used in auditing research, especially for meta-analyses of empirical archival studies that use regression models.

There is now considerable potential for meta-analysis to have an impact on auditing policy and regulation. Researchers using meta-analysis should make use of the most current techniques (e.g. meta-regression), which are more reliable and allow researchers to explore more issues about the research.

The paper informs auditing researchers about methods to advance their research and increase its usefulness.

This study examines the accuracy and bias of profit forecasts disclosed in prospectuses by New Zealand companies for initial public offerings during the period 1987 to 1994. The results show that profit forecasts in this period are, on average, more accurate titan those disclosed prior to 1987, which were examined in prior studies. However, the results reject the null hypothesis that profit forecasts are accurate. In examining forecast bias, the evidence shows that the forecasts are, on average, somewhat pessimistic, but not sufficiently to reject the hypothesis that profit forecasts are unbiased. Tests of the determinants of error show that larger companies make more accurate forecasts, and forecasts made in the year 1987 are less accurate than in other years. Tests of the determinants of bias show that forecasts made in 1987 are also more optimistic, and that companies with longer trading histories and pessimistic forecasts make less biased forecasts. Forecast period and industry type are not significantly related to error or bias.

This study compares the strategies and impact of six British activist groups, as documented in 1997, with data gathered on the same groups in 2000. These groups, Voice of the Listener and Viewer, Campaign for Quality Television, Deaf Broadcasting Council, Consumers Association, National Consumers Council and National Listeners and Viewers Association, attempted to build a public sphere for generating debate around and catalysing changes to broadcasting policies and programming. They were tracked in 2000 in order to identify those issues, relationships and groups that had endured. The research design provided a telescopic look at their interactions with their targets and with each other during a period of rapid technological and industry change. In a multichannel broadcasting environment where convergence and globalisation are buzzwords, activists used public relations to create a broader public forum for a wide range of significant issues with which to engage demographically, psychographically and geographically diverse publics. The ensuing media education, media advocacy and relationship building, although elite in origins, strengthened democratic discourse, thus reaffirming broadcasting’s invaluable role in civil society.