We use an evolutionary game model to study the interplay between corporate environmental compliance and enforcement promoted by the policy maker in a country facing a pollution trap, i.e., a scenario in which the vast majority of firms do not internalize their pollution negative externality and auditors do not inspect firms. The game conflict is due to the trade-off in which firms are better-of...

In 1993 the Auditing Practices Board issued an expanded audit report, SAS 600 Auditors' Reports on Financial Statements, in an attempt to educate users and reduce their misunderstandings in respect of certain matters pertaining to the audit function. In the context of the auditors' reporting environment, this paper investigates the extent to which the new audit report, SAS 600, has been success...

Why are auditors unable to detect fraudulent financial reporting in some audits? Should auditors be able to anticipate when fraud is likely to occur? Various studies have discussed not only the need for experience and supervision of auditors, but also the effect of decision models, and even expert systems, on fraud detection and the study of internal controls. This paper presents a discussion o...

Article history: Received 5 October 2006 Received in revised form 4 May 2008 Accepted 25 May 2008 Available online 16 July 2008 Fraud risk is higher than ever before. Unfortunately, many auditors lack the expertise to deal with the related risks. The objectives of this research are to develop an innovative fraud detection mechanism on the basis of Zipf's Law. The purpose of this technique is to...

While there are many alternative proxies for “earnings quality”, there is little evidence as to what auditors consider to be indicative of high earnings quality. To answer this, we examine the adjustments that auditors require companies to make to earnings during year-end audits. There are three findings. First, audit adjustments serve to increase earnings persistence, smoothness, and accrual q...

There is an overlooked iceberg of problems in end-user computing. Spreadsheets are developed by people who are very skilled in their main job function, be it finance, procurement, or production planning, but often have had no formal training in spreadsheet use. IT auditors focus on mainstream information systems but regard spreadsheets as user problems, outside their concerns. Internal auditors...

The last decade of the 20th century witnessed rapid growth in the adoption of various environmental management systems (EMS) within organisations. Environmental consultants and auditors play an intricate role in the interpretation, implementation and certification of an EMS. This paper presents the experiences of eight leading auditors with respect to the adoption of EMS/ISO 14001 by Australian...

Definitions of election verifiability in the computational model of cryptography are proposed. The definitions formalize notions of voters verifying their own votes, auditors verifying the tally of votes, and auditors verifying that only eligible voters vote. The Helios (Adida et al., 2009) and JCJ (Juels et al., 2010) election schemes are shown to satisfy these definitions. Two previous defini...