Search Results for external-auditing

Abstract

The research aims to identify the role and procedures of external auditing in developing and enhancing the work of internal control in governmental institutions. It also seeks to determine the extent to which the adherence of government units to internal control components according to COSO contributes to strengthening their effectiveness. Furthermore, it explores the role of the external auditor in examining and evaluating internal control within governmental units and the extent to which external auditing relies on it.

To achieve the research objective, questionnaire data were analyzed using statistical methods, specifically Factor Analysis, to determine the relative importance of each factor. Weighted data were then obtained based on the importance determined by factor analysis, followed by structural equation modeling (SEM) analysis, incorporating the mediator variable (internal control components according to COSO).

The research population was defined as the Federal Board of Supreme Audit employees working in the Ministry of Electricity under the Iraqi Federal Financial Supervisory Board. The research sample was limited to a governmental unit subject to the audit of the research population, specifically the headquarters of the Iraqi Ministry of Electricity, due to the availability of the necessary data and their cooperation in scientific research.

The theoretical part of the research relied on collecting data from books, articles, theses, dissertations, scientific studies, and all research related to the topic, whether in Arabic or English, as well as online resources. The practical part depended on creating a questionnaire distributed to the sample individuals.

The research reached several conclusions, the most notable being the lack of awareness among government units and their staff, especially the sample, regarding professional publications related to internal control, such as international and local auditing standards. It also highlighted the failure to keep up with guidelines issued by the Federal Financial Supervisory Board (e.g., the 2007 Internal Audit Units Guidance Manual, Audit Manual No. 4, and the 2024 Internal Control Manual). This was confirmed by practical findings, where respondents agreed on the existence of a relationship and influence between external auditing and the effectiveness of internal control. This influence could be negative if external auditors fail to develop and update audit mechanisms. Additionally, relying on COSO internal control components in external auditing helps enhance the effectiveness of internal control, as shown by the analysis results, especially with the presence of the mediator variable. However, the lack of knowledge about these components has led to weak attention to internal control elements, ultimately weakening internal control in public sector units.

Among the key recommendations of the research is the need to familiarize employees within the unit with professional publications related to internal control, particularly the 2024 Internal Control Manual issued by the Federal Financial Supervisory Board. This manual emphasizes the importance of adhering to internal control components and principles and their impact on enhancing the effectiveness of internal control. This can be achieved through seminars, workshops, and conferences conducted by specialists, in addition to those organized by the Federal Financial Supervisory Board. Furthermore, it is essential to distribute all professional publications related to internal control to employees for review and awareness of their key provisions.

Abstract

This research aims to analyze the role of integrating artificial intelligence (AI) technologies in promoting digital transformation in the banking sector. This is of great importance due to its significant impact on monetary policy. Through the application of digital technologies, banks and financial institutions can greatly improve their procedures, leading to changes in banking liquidity. Digital transformation can contribute to increased cash flows and improved liquidity management, thus affecting the central bank's ability to implement monetary policy effectively. Thanks to big data analytics and AI, banks can better identify economic needs, influencing interest rate decisions. Therefore, it can be said that digital transformation plays a significant role in shaping monetary policy and opens the door to significant improvements in the management of fiscal and monetary policies and creative thinking skills. Traditional reliance on auditing methods does not keep pace with rapid technological developments, and auditors' weak adoption of creative thinking methods in addressing audit problems negatively affects the quality of audits and the accuracy of their results. The importance of this research lies in its aim to provide a comprehensive framework that combines modern technological tools and creative approaches to digital work, thereby contributing to the development of critical practices and enhancing the quality of its results according to standards of efficiency and effectiveness. The advanced statistical software Smart Pals and appropriate statistical methods were used to test the hypotheses. The results showed a statistically significant effect of using artificial intelligence technologies (expert systems, machine learning, continuous auditing, natural language processing, and robotic process automation) across all dimensions. This indicates the importance of AI applications in improving the quality of external auditing. Furthermore, the use of AI technologies has a positive impact on investor decisions through the quality of external auditing. Based on these findings, the researcher recommends that all accountants and auditors keep pace with technological developments and respond to changes in the surrounding environment by developing their AI skills. Audit firms should also be encouraged to adopt AI technologies in their work by replacing manual systems with computerized systems. The study aimed to analyze the impact of digital transformation indicators (ATMs, electronic payment cards, electronic point-of-sale systems, and instant settlement transfers). Adopting digital technologies has contributed to reducing reliance on cash and increasing the efficiency of monetary policy. However, in Iraq, limited effects were observed due to structural challenges such as weak infrastructure and economic instability.

Abstract

Digital markets have undergone significant transformations, creating opportunities for growth but also presenting challenges related to the reliability of information and the emergence of "information manipulation" practices that negatively impact investors' decisions. This research aims to analyze the role of financial accounting in mitigating this phenomenon by highlighting the relationship between the quality of accounting information and the level of transparency in digital markets. The study adopted a descriptive-analytical approach to review previous literature, alongside a survey method through a questionnaire distributed to a sample of 112 individuals, including accountants, auditors, and investors. The research focused on specialized tools and techniques in digital financial accounting, such as the implementation of International Financial Reporting Standards (IFRS), which aim to standardize and regulate financial disclosure globally. The study also addressed electronic accounting information systems, relying on cloud-based software like QuickBooks and Xero, which help improve financial transparency and facilitate precise tracking of financial transactions. Additionally, the study emphasized the role of external independent auditing, which contributes to ensuring the credibility of financial data and reducing manipulation, as well as the importance of corporate governance through the application of strict rules to ensure transparent financial disclosure, thereby enhancing trust in digital markets. The results revealed a noticeable prevalence of information manipulation in digital markets, such as inflated indicators and exaggerated advertisements. The study also found a statistically significant inverse relationship between the quality of accounting information and information manipulation, where the application of international standards, electronic accounting systems, external auditing, and corporate governance significantly contribute to reducing manipulation and enhancing the reliability of information.

Abstract

The research aims to study and analyze the risks associated with the adoption of accounting information systems, particularly human, technological, environmental, and legal risks. It also addresses the literature related to the reliability of the external auditor’s report by highlighting the nature of these risks and explaining the extent to which they affect the quality and credibility of audit reports issued by local audit firms.

The research is based on the hypothesis that identifying the risks of adopting and operating accounting information systems by regulatory bodies, and relying on auditors who possess the professional capability to disclose such risks, will positively reflect on the reliability of the final audit report for stakeholders who rely on accounting information. To achieve the objectives of the study, a conceptual framework was developed that covers the accounting information system, its internal structure, and the risks associated with its adoption. In addition, the framework analyzes the dependent variable represented by the reliability of the external auditor’s report and the characteristics that this report must include. The study also clarifies the role that risk identification can play, especially risks related to human factors involving system designers and operators, and technological risks related to the information infrastructure of business organizations.The researcher concluded that the level of disclosure regarding the risks of adopting accounting information systems in audit reports is still limited and incomplete. A significant portion of audit outputs continues to focus on traditional financial tests, without expanding into the evaluation of risks associated with modern systems. It was also found that the lack of systematic identification of these risks directly affects the reliability of the audit report and reduces the ability of users of financial statements to rely on it.

The researcher recommends that audit reports should include an annex or a dedicated section addressing risks related to accounting information systems, and that an evaluation methodology should be adopted encompassing human, technological, environmental, and legal risks, in addition to determining the impact of these risks on the fairness and credibility of financial data. The study further recommends enhancing the training of regulatory staff on mechanisms for evaluating risks associated with modern systems and integrating the results of such evaluations into the contents of the external auditor’s report, in a manner that strengthens its reliability and transparency for all stakeholders.