Thursday, April 21, 2011
Some Colour to Fraud Investigation
Sunday, April 17, 2011
Week-end: Audit Commercials
If you know any other TV ads on YouTube related with audit and as cute as the one above, then please share with me information in comments. Have a nice week-end!
Friday, April 15, 2011
Group Audit: Practice Considerations
Friday, April 8, 2011
Event Study: Audit Report Announcements
Sunday, April 3, 2011
Week-end: Comrade's Blog - Audit is Fun!
I have found in internet one more enthusiast-auditor, s.wardrop. At least, there are not to many people out there writing and popularizing audit and accounting with love and passion ;) That is why it always pleasure to meet comrades :)е, приятно встретить товарищей.
Link to his blog, pls click.
I liked his post: Audit is fun:
I can hear the cries of derision from here - how sad, must be nuts. But listen up folks, audit is not what it used to be - just columns of endless figures, ticking and bashing, checking invoices; I am sure many out there have already twigged to this, but how often do we say it?
And maybe I am letting the best kept secret of the profession out of the bag - but as I see it, audit is about business, which is about people - customers, suppliers, staff, managers, directors, shareholders, stakeholders, charitable beneficiaries. For those who have a smidgeon of latin, you only have to think about the term "audit" and you know that talking to people and listening to them is as important as sticking your head in a room full of invoices and never coming out.
In what other profession do you have total access to ask whatever questions you like, to learn about how business operates, fails or suceeds, to learn about management, about people.... and about life. And I dont know about you, but I enjoy it!
And since I am here - I am tired of listening to the media and others, including some fairly close to home, bashing auditors and saying how little value we add, and how we are to blame for.... well, just about anything. We are not all "big" firms, we dont all audit BT or Shell or (heaven forbid) banks (not that I am decrying what they do, I wouldn't want the job), but a lot of us work year in and year out auditing smaller clients, charities, family companies and adding value to what they do. Over the past 4 years, we have helped our clients to over £100,000 in actual cash in bank savings - now tell me that audit doesnt add value!
Photo is taken from here: http://www.goodbyecobber.com/?page_id=3
Text from blog: http://www.accountingweb.co.uk/blogs/sw
Thursday, March 31, 2011
Ethical Auditor: Being Holier than the Pope
- Integrity
- Objectivity
- Professional Competence and Due Care
- Confidentiality
- Professional Behavior
Thursday, March 17, 2011
New Audit Order: Take 2. Remodeling audit services
Tuesday, March 8, 2011
New Audit Order: Take 1
Tuesday, March 1, 2011
New Regulations for Auditors: European Revolt
Sunday, February 27, 2011
ACCA
Congratulation to everybody who passed at least one paper ) You deserve it for your hard work and ability to communicate an idea.
Preparation for next session have to be started as soon as possible.
I am going to start reading study text in coming week. Good luck to your preparation!
PS If any US CPA candidate is reading this blog, good luck to you also! ))) I have been doing CPA exams and know what you fill )
Thursday, February 17, 2011
Goodwill vs Business Reputation
Saturday, February 5, 2011
Audit Opinion and Share Prices
Actually, there is the value of audited company at the stake! To keep our clients from such comments, we can now offer scientific dispute :)
Nowadays I am busy with preparation of my research proposal in the audit area. I have reviewed and read sufficient number of research articles dedicated to subject of relationship between share price and audit opinion announcement effect.
It is interesting that while working in audit firm I was not aware that there were lots of researches in this area. Of course, my colleagues and I assumed that audit opinions are able to communicate additional valuable information to investors, public, and regulatory authorities, but I could not imagine that topic is rather popular among researchers in economics and statistics.
So, the main questions which researchers ask: “Is there any information content in audit opinion announcement for investors?”; “Do audit opinions really influence share prices?”. The researches in this area started in 1970-s and still are carried out. There are different research methods are applied: event study statistics with models, sociological interviews, modeling situation based on group of investors.
Based on what I have already read I can say that the results are controversial.
Number of studies (pls. see Firth (1978); Dopuch et al (1986); Chen et al. (2000); Menon and Williams (2010)) present sufficient evidence that share prices significantly decrease after announcement of qualified (modified) opinions as oppose to non-modified. Chen et al. (2000) illustrated his research with interesting figure showing distribution of share returns as a result of reaction on clean and modified audit opinion (MAO) in Shanghai Stock Exchange.
On the other hand there are number of researches that do not prove hypothesis that investor reaction towards audit opinion is statistically significant. Studies are carried out by Chow and Rice[different results for API and types of qulafications] (1982); Martinez et al (2004); Ogneva and Subramanyam (2007); Al-Thuneibat and Nedal (2008)). Probably figure provided by Al-Thuneibat who tested same idea in
As seen from the figure above behavior of returns on shares of companies’ which have received qualified audit opinions is rather controversial and does not maintains single pattern.
Conclusion
Finally, I personally think that statistical research depend on quality of data you get and appropriateness of method applied. For example, in event study researches it is important to pick up right date. Moreover, attitude of investors towards audit opinion varies from country to country depending on development of markets, institutes, legal relations and culture. Probably cross country research needed to be carried out based on the unified elaborated methodology by group of scientists. So, I would not be much creative if I say: “further researches to be carried out in this area” ;)
Articles mentioned in post:
Ali A. Al-Thuneibat, Basheer Ahmad Khamees, Nedal A. Al-Fayoumi, (2007) "The effect of qualified auditors' opinions on share prices: evidence from
Chen, C.J.P., Su, X. and Zhao, R. (2000), “An emerging market’s reaction to initial modified audit opinions: evidence from the Shanghai Stock Exchange”, Contemporary Accounting Research, Vol. 17, pp. 429-55.
Chow, C. W., and S, J, Rice. 1982. Qualified audit opinions and share prices — An investigation. Auditing: A Journal of Practice and Theory 1 (Wmter): 35-53.
Dopuch, N., R. Holthausen, and R. Leftwich. 1986. Abnormal stock returns associated with media disclosures of “subject to” qualified audit opinions. Journal of Accounting and Economics 8 _June_: 93–117.
Firth, M, A. (1978). Qualified audit reports: Their impact on investment decisions. Accounting Review 53 (3): 642-50.
Menon, Krishnagopal; Williams, David D (2010). Investor Reaction to Going Concern Audit Reports. Accounting Review, Nov2010, Vol. 85 Issue 6, p2075-2105, 31p
Ogneva, M., and K. R. Subramanyam. 2007. Does the stock market under-react to going concern opinions? The evidence from the