Evaluating the Perceptions of Investment Banks on the Effectiveness of Financial Audit Report: Evidence from Kingdomof Bahrain (original) (raw)

The Impact of the Audit Committees' Properties on the Quality of the Information in the Banking Financial Reports: A Survey on Saudi Commercial Banks

International Business Research, 2017

This study aims to identify the impact of the audit committees' properties on the quality of the information of the banking financial reports in the Saudi commercial banks by identifying the effect of identifying tasks and duties, independence, accounting and banking experience and efficiency of the audit committee on achieving the quality of the Saudi banking and financial reports. 110 questionnaires were distributed on the research sample and 105 questionnaires were received and analyzed through ANOVA. Results indicate that the availability of the audit committees' properties affect increasing the quality of the financial reports in the Saudi banking at the level of properties as a whole where the (P) probable value was (0.000), which is less than 0.05. It represents the functions and duties of the audit committee, the committee's independence in banks, the availability of the accounting and banking experience for the members of the audit committee and the efficiency of the audit committees at banks. The study recommends more emphasis on the diversity of the experiences of the members of the audit team and thus; the committee can performs its functions in a more efficient and effective way.

Factors affecting the quality of Auditing: The Case of Jordanian Commercial Banks

This paper focuses on identifying the most important factors affecting audit quality in Jordanian Commercial Banks (JCBs). The perceptions of JCBs' internal and external auditor's in addition to financial managers have been investigated. In general it was found that the respondents believe that audit quality in the Jordanian banking sector ranges from satisfactory to very good. The results indicate a positive and significant correlation between audit quality and audit efficiency, the reputation of auditing office, auditing fees, the size of audit firm, and the proficiency of auditor. The results of this study make a contribution to existing literature in the area of factors affecting audit quality in eastern developing countries such as Jordan. In addition, this research adds further evidence to the value of studying auditing efficiency, the reputation of audit firm, auditing fees, the size of auditing office, and the proficiency of auditor on the quality of auditing.

Audit firm, corporate governance, and audit quality: Evidence from Bahrain

Advances in Accounting, 2009

The aim of this research is to document the perceptions of credit and financial analysts with regard to the relationship between the effectiveness of audit committee, size of the auditing firm and audit quality in the context of Bahrain, which is characterized by a developed financial sector, low-liquidity stock market, low turnover in board of directors of listed firms, an inactive merger and acquisitions market and almost non-extent litigation. A survey of 300 credit and financial analysts shows that analysts considered auditors' opinion useful. Both credit and financial analysts see the credibility of financial statements to be a function of the size of the auditing firm. Both groups assume that the characteristics of Big-Four firms allow them to produce better-quality reports than non-Big firms. Non-audit services were found to affect auditor's independence and hence impair audit quality. Both the groups of analysts believe that effective audit committee enhances the quality of audit reports. Financial analysts perceive financial statements to be more credible than do credit analysts.

Internal Audit and its Impact on Risk Management at the Islamic Banks Listed in Amman Stock Exchange

International Journal of Academic Research in Business and Social Sciences, 2017

This study aims to explain the impact of internal audit on the management of risks at the Islamic banks listed in Amman Stock Exchange, The population of the study consists of financial managers and accountants working at the Islamic banks listed in Amman stock exchange, which are three in number, according the report of ASE for the year 2016. Due to the small number of banks of the population of the study, all of them were included in the sample. (100) questionnaires were distributed among the participants of the study sample, of which (87) were recovered. The main conclusions of the current study can be summarized as the commitment of Islamic Banks listed in Amman Stock Exchange to the standards of internal audit related to attributes as a whole is (3.86). Results showed also that managements of internal audit at Islamic banks are committed to the standards of Purpose, authority and responsibility; the standard of independence and objectivity; the standard of proficiency and due professional care; and the standard of Quality Assurance and Improvement Program to a high degree. The highest commitment is to the standard of independence and objectivity, while the lowest level of commitment was directed to the standard of Quality Assurance and Improvement Program among the managements of internal audit at Islamic banks. Based on these conclusions, the analysis of data and testing the hypotheses, the researchers recommends .Increasing the attention paid to internal audit, due to its importance in supporting the function of risk management, through the relevant specialized training courses, and the provision of support to the managements of internal audit in terms of human resources, which are trained and qualified, academically and practically.

Factors Associated with Audit Reports in Saudi Arabia

Global Journal of Management and Business Research, 2015

Considering audit reports as the results of any audit task and their importance in communicating an auditor’s opinion about the credibility of financial statements, this study aims to investigate the effect of firm-related factors and auditor-related factors on the kinds of audit reports in Saudi Arabia, which is considered one of the biggest markets in the MENA region. Data for 153 listed companies are employed in the analysis, collected as at the end of 2013. A multiple regression model is developed taking audit reports as the dependent variable. The results indicate that the auditor’s size, firm size, and leverage significantly affect audit reports, with large auditors tending to issue modified audit reports more than smaller auditors, and small companies and leveraged companies being more likely to receive modified audit reports. Neither profitability nor the age of the company (as a listed company) affects audit reports. These results are consisted with the literature and t...

Features of an effective audit committee, and its role in strengthening the financial reporting: Evidence from Amman Stock Exchange

Purpose: This study aims to understand the features of an effective audit committee and its role in strengthening financial reporting. Design/methodology/approach: A questionnaire based survey was circulated to public listed companies on the Amman Stock Exchange (Banking, insurance, and financial institutions). The study was aimed at internal audit managers and finance managers. Out of 156 questionnaires, we received 110 back which represents a 71% response rate. Findings: The study results show that the research respondents have a good level of education and experience. In addition, there is a relationship between internal controls, international standards on auditing, institute of internal audit; Jordan securities commission requirements, external audit, understanding of audit committee functions, and financial reporting. Further more, the internal control, international standard on auditing and institute of internal audit, Jordan securities commission requirements, External audit, understanding of audit committee functions can explain a significant amount of the variability in financial reporting. Finally, the research results also show that age and gender make a difference for our respondents when they evaluate financial reporting.

A study of compliance with international auditing standards by auditors in Bahrain

International Journal of Applied Decision Sciences, 2010

Corporations in Bahrain are required to prepare their financial statements using international financial reporting standards (IFRSs), and the external auditors are required to follow international standards on auditing (ISAs). This study investigates the extent to which external auditors in Bahrain comply with the 32 ISAs, and also the problems encountered by them in complying with these standards. All the audit firms located in the Kingdom of Bahrain were surveyed using a pre-tested questionnaire. The results indicate that although the auditors comply with all the standards, their degree of compliance varies with respect to various standards and also by the size of the audit firms. The Big Four firms had a higher level of compliance with the ISAs. The qualitative responses that explained the difficulties in complying with ISAs are also listed in the paper. These results are also compared with the results of a similar study from Jordan. The ISA compliance levels in Bahrain and Jordan are comparable. The study suggests that for a more-effective compliance with the ISAs, regulatory agencies in Bahrain should be strengthened, and training and continuing education of auditors, especially from non-Big Four firms, should be improved.

Measuring the quality of financial reports of banks listed on the Iraq Stock Exchange

Zenodo (CERN European Organization for Nuclear Research), 2023

The study aims to measure the level of quality of financial reports according to a set of characteristics related to the quality of profits. The study includes a sample of (13) Iraqi companies. These companies belong to an important group of different sectors represented by (banks, industry, insurance, agriculture, and tourism). The study dealt with the concept of measuring the quality of financial reports and the determinants and methods of measurement, according to a scientific theoretical framework based on a group of Arab and foreign scientific research. The study reached a set of conclusions, the most important of which is that the quality of financial reports is low in Iraqi companies. The reason is due to the high optional accruals, and that the continuity of profits is the most influential among the agents of the Iraqi companies. The quality of the financial reports. Enhance credibility and reliability.

The Determinants of Audit Expectation Gap: An Empirical Study from Kingdom of Bahrain

Accounting and Finance Research, 2018

The research aims at identifying the determinants of audit expectation gap between the auditors and the users of financial statements in the Kingdom of Bahrain. This issue is noticed in many frauds or errors or illegal matters by the general public after every scam whether Enron and WorldCom from United States or Satyam and Punjab National Bank from India or Tesco and BHS from United Kingdom or Mobily from Kingdom of Saudi Arabia. As per International Standards on Auditing (ISAs), auditors are not responsible to detect each and every fraud or error or illegal act as it is the responsibility of management. However, auditors are expected to assess the possibility of an error or fraud to occur and assess risks of material misstatement due to error or fraud and they are supposed to express their independent and objective opinion on financial statements whether financial statements are prepared in accordance to suitable criteria (International Financial Reporting Standards in the case of...

The Impact of the Opinions of the Independent Auditors on the Investor Decisions in Banking Sector: An Empirical Study on the Banks Operating in Turkey

The opinion of the independent audit has significant importance in decreasing the information risk and increasing the reliability of the information submitted in the financial tables that form the basis of the decisions reached by financial information users. This study is focused on at which degree the individual and institutional investors with whom the banks are in trading relationship is be affected by the opinions of the auditors given as a result of an independent audit. Whether the deposits imbursed by the people and institutions to the banks as the processes reflecting the trading relations of the banks, the credits they get and the total assets that are affected depending on them, net interest income, trading profit/loss and net profit/loss items and the prices of equity share are affected from these opinions has been examined in the study, The scope of data includes activities of 10 different banks operating in Turkey between the years 2006-2014 have been examined and dynamic panel data model has been used. In the study, it is shown that the independent audit report opinions reinforce the investor decision in the same direction based on given variables. 1. Introduction The banking sector is one of the basic elements of the financial system. Banks mediate the relationship between fund demanders and fund suppliers by means of the existent payments system and undertake a very important function in economic terms by taking charge in the process of converting the savings into investment within the financial system. Banks should establish a relation based on mutual trust with all its shareholders on the condition that it will start with their customers whose deposits they collect for the purpose of creating resources to be able to sustain their activities. Assuring the public in regards to the operations as well as profits of the banks is of high importance since it assigns more responsibility to bank auditing as a whole. Auditor's opinion carries much significance in the eye of both the investors and the stakeholders. This is due to the fact that auditor's reports have a positive effect on the confidence degree of the stakeholders in the financial statements. Investor's process ofmaking a decision is influenced by the report provided by the independent auditors. The final outcome of an auditor's report, which may be unqualified/qualified/adverse/ disclaimer may either attract or defer the investor, which is a powerful influence that is taken into consideration by the investors. In the developed markets, the opinion of the independent auditor is one of the elements that affect the decisions of the investor. Significant changes are experienced in the field of audit in recent years in Turkey. Together with these changes, it is aimed that the institutions and organizations with activities in Turkey should be more transparent with the information they make public. In this regard accountability and reliability is highly important. The issue of whether the independent auditor opinion given to the banks that are subject to the independent audit and that issues financial tables in accordance with International Financial Reporting Standards as of 2005 in our country affect the decisions of the investors could be accepted as the indicator of the trust for the audit results. Before proceeding to the literature and research part of the study, the definitions of these changes taking place in the banking literature are