RELATIONSHIP BETWEEN AUDITOR INDEPENDENT, NON AUDIT FEES AND POLITICAL CONNECTION: GOING CONCERN OPINION
CHAPTER ONE
1.0 INTRODUCTION
This paper adds to the literature of auditor independent to examine the role of non-audit services and political connection in going concern opinion. Explicitly, it is constructed to explain the relationship between non-audit fees, political connection and auditor independent during political tsunami which serves as the basic issues also motivation for this paper. The problems statements are listed in align with research gap of prior studies and other factors contributing to the issues. Accordingly, several insights on the importance of this research such as research objectives, contribution of studies, literature
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For this purpose, the political crisis in 2008 Malaysia General Election is selected as the theme of study. The concern of going-concern opinion issued by independent auditors which rooted in some threats of political volatility duplicated with economic insecurity, thus undermine the impartiality of quality audit. Explicitly, I would like to study how the incentives of firm’s management, regulators and accounting institutions and auditors are induced by institutional structure where the firms are operating during “political tsunami” in Malaysia 2008 General Election. This political tsunami offer a unique theme to study the interaction of and impacts of institutional forces on accounting and auditing aspects. The ruling coalition undergo loss of supermajority political landscape in election result thus trigger series of long term uncertainties and impacts to numerous aspects in domestic especially politically connected firms suffered the most. From it, some inducements of concerned parties would like to modify nature of accounting reporting are anticipated so as the auditor’s opinion will be rendered. I expect the overall findings will shed some lights suggest that the non-audit services provided to firms with political connection may jeopardize auditor …show more content…
Yet, there is limited of studies have done in the investigation concerning the impact of non-audit services fee and political connection tremor on auditor independent during general election in developing economy similar to Malaysia.
Therefore, this study is expected will add to the stream of literature in numerous ways. First, this study is taken into consideration the particular variable which is unique to the audit circumstance in Malaysia context explicitly political connections. General election is perceived as one of the remarkable political risks particularly to politically connected firms. In general, various nations have dissimilar structure in resources administrative and allocation and consequently, the magnitude of general election’s effect on the institutional structure may diverge between one and another. Given the longest ruling Malaysia government under parliamentary system, it furnishes a deeper insight to evaluate the impact of Malaysia political connection impact to
Accounting and auditing firm The scandal's consequences would primarily be a professional embarrassment for auditing and accounting firms. The American Institute of Certified Public Accountants quickly altered the auditing standards of the accounting profession in the United States, prompting auditors to become more proactive in combating fraud. The shareholders
However, internal audits show findings and recommendations which act as a tool for department heads to take suitable corrective action and help in plugging the loopholes which would otherwise go undetected for a considerable period of time. The external audit lends credibility to the financial reporting process of state and local governments, and an essential element of that process is the independence of the external auditors from the governments they are auditing. Otherwise, those who use governmental financial statements cannot rely on the integrity and objectivity of the auditors’ report.
Ethical issues should be seen in the organization and they must bring a change when they have discovered that it is not moving as per the rules of the ethical standards, so that the employees have a chance to present their views to solve the issue collectively with their own views and ideas. Independent social auditing which is conducted by an external party regularly or without prior announcement should have been a boon in the case of Lehman Brothers. The audit result which was taken by the external auditors must be exposed to the public square, for further scrutiny so that the public can come to know the performance of the whole organisation without any doubts. This would have showed the effort lessens the opportunity for retaliation from those being audited which was the company’s own board where they manipulated according to their own wants and desires which in the end resulted in the decline of the one of the top listed company in wall street ‘Lehman
Is there a way to predict the country’s achievement in the next few years by looking at how political parties have succeeded in the past? My studies use data from 1948 to show the association between the political party in power and their effects on improving the country’s economy. I decided that, a good, practical way of measuring a country’s economy improvement is by observing how employment rate and inflation is affected over time. In this study, I took a closer look at how these two factors are affected by the most important political representatives. These political representatives being; highest national ranked (president) and the highest at state level (governors).
Citizens elect representatives and the representatives get together to vote for a prime minister. One similarity among these two models, concerning the election process, is that the people don’t directly elect a head of government. Ultimately, party delegates are elected by citizens by popular vote using the voting system of proportional representation, where delegates need a majority vote to become a party delegate. The party delegates are then responsible for the procedure of presidential elections where the delegates vote for who will be the party leader to be legitimate for a presidential candidate. Through this system, it is regarded that an indirect electoral process is used in terms of the presidential elections as the average citizen is not directly responsible in terms of the determining the
This study would be conducted using qualitative and quantitative
Case # 6: 1.9 ZZZZ Best Company, Inc. 1. AS 5.14 AU 316.02-.04 Consideration of fraud in a financial statement. Auditors have responsibility to perform the audit and check the authenticity of the financial statements. Auditor should take into account the risk of fraud in a financial statement from management improper assertions.
What do pro forma financial statements show? There are various things Pro forma financial statement shows but first, let’s understand the word pro forma which means a financial statement based on projection and assumption of what the business future would be to determine what should be happening now. Pro forma financial statement can be thought of as a “Projected results for financial statements in the future, given assumptions about what will happen in the meantime” (Siegel & Yacht, 2009, p. 81).
‘’When person, and the interests of a person should be at the centre of all relationships. People and where appropriate their carers, must be recognized as partners in the planning of services which should be integrated and based on collaborative working across all sectors’’ (Health, Social Services and Public Safety) Multi-agency working involved a number of professionals from different medical services all working together to provide the best holistic care for the individuals using the health and social care services. Multi-agency working within the health and social care setting is very important for both the professionals and the patients because it can provide an overall quick and accurate procedure of care.
The references used in this study will be used to build knowledge on the subject, and to identify
The unrealistic expectations of external users of financial statements to assume that an auditor remains totally impartial to client influence is a conclusion drawn from psychological research. The legal system forms the opposite view and has determined that external users should be able to rely implicitly on an auditor’s determination. Accounting standards have set expectations of auditor independence and neutrality. (Max H. Bazerman, 1997) The entire concept of professional scepticism and its application is the true and fair representation of financial statements to the users of these
Methods: Information sources Both primary and secondary data were used in order to gather information for using in research paper in parts such as context and results. These materials were used to answer research questions in aims. Secondary research: Many information was electronically read in different sites. The available materials such as newspapers, journals, electronic information, news and magazines were reviewed and used. Primary research: There were applied a raw data.
My interest in Accounting stemmed from my optimistic expectation about career development in this field. Accounting is so important in the business world that only on the basis of accounting information, management is able to make investment decisions, and optimize internal operation. Thus, it is widely applied to every business sector. However, due to a strange combination of circumstances, I was matriculated by Biology and Medical Engineering College, instead of the Economic and Management College, in which I could accumulate the knowledge that would allow me to realize my career ambition. Changing major was not easy to operate in our university.
In Malaysia they are several branches of government are created and power is shared between them. The one and other branch can challenge other branch and Executive branch is to mainly focus on how to execute the