Showing papers on "Audit published in 1979"
TL;DR: The auditor's report is a major vehicle of communication between the auditor and those who use his work as discussed by the authors, and the emphasis in this communication process is upon reporting circumstances which result in departures from the auditor's standard report.
Abstract: The auditor's report is a major vehicle of communication between the auditor and those who use his work. In the report, the auditor indicates the scope of his examination and the conclusions he has drawn about the appropriateness of the financial statement presentations. The emphasis in this communication process is upon reporting circumstances which result in departures from the auditor's standard report. This orientation is strongly evidenced in both the auditing literature' and the literature of various user groups.2 Although the message intended by different audit reports has been the subject of little systematic study, the consensus in the literature is that: "The basis for reporting deficiencies is presumably to inhibit. . . behavior in one or more respects. What other reason should there be for making such exceptions than to caution against some anticipated use of the audited information.... " (American Accounting Association [1972, p. 68]). Clients', auditors', users', and regulatory agencies' interest in the type of report which is issued is exhibited by (1) the large number of references
185 citations
TL;DR: In this paper, the authors report the results of two statistical tests for association between the positions taken by the Financial Accounting Standards Board (FASB) and individual accounting firms with regard to accounting standards and the positions expressed by the interest groups with which each deals.
Abstract: Certified public accounting involves the expression of an "opinion" that corporate financial statements present fairly the financial positions of firms in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Accounting (as opposed to auditing) standards are promulgated by the Financial Accounting Standards Board (FASB) and help define what information must be revealed in audited financial reports of public corporations. The FASB is operated by the Financial Accounting Foundation, a nonprofit corporation organized by the American Institute of Certified Public Accountants (AICPA) and cosponsored by five other private interest groups. The Securities and Exchange Commission (SEC) has generally recognized and endorsed the determinations of the FASB and predecessor organizations. The process by which accounting rules are established has recurrently been and is now the object of intense public scrutiny. In its recent staff report (1976),' the Senate Government Operations Subcommittee on Reports, AccountThis paper reports the results of two statistical tests for association between the positions taken by the Financial Accounting Standards Board (FASB) and individual accounting firms with regard to accounting standards and the positions expressed by the interest groups with which each deals. We find a positive, although statistically insignificant, association between client preferences and the likelihood that an auditor will support a rule. The likelihood of FASB support for a rule is found to vary directly and significantly with the strength of FASB sponsoring-organization and accounting-firm preferences.
95 citations
TL;DR: In this article, the Flesch Reading Ease Formula was used to measure the readability of selected accounting and auditing messages in annual reports, and the results showed that most notes to financial statements and reports of independent auditors have unsatisfactory difficulty levels.
Abstract: Readability research has resulted in the development of formulas to esti mate the relative success of comprehension of written messages without requiring the reader to actually read it and be tested. In this paper, the readability of selected accounting and auditing messages in annual reports is measured using the Flesch Reading Ease Formula. Based upon these measurements, notes to financial statements and reports of independent auditors are found to be at unsatisfactory difficulty levels. Additionally, evidence provided indicates that the readability level of recent financial statement notes is significantly lower than that of 1969 statements.
81 citations
69 citations
TL;DR: The degree to which accounting messages contained in financial reports are understood and convey the exact meanings which were intended by their senders seems a natural issue of interest as discussed by the authors, and some justification for studying the problem, as well as some empirical evidence, was provided by Haried [1972; 1973] and Oliver [1974].
Abstract: The degree to which accounting messages contained in financial reports are understood and convey the exact meanings which were intended by their senders seems a natural issue of interest. Some justification for studying the problem, as well as some empirical evidence, was provided by Haried [1972; 1973] and Oliver [1974]. More recent results, based upon a study of meaning within a specific context of auditing, were provided by Libby [1979]. A fundamental issue in such research is whether expressions of agreement or disagreement with an intended message by sender and receiver do, in fact, lead to distortions in the intended decisions the messages were designed to induce. To illustrate, a receiver of an audit report containing a particular "subject-to" opinion may have a different conception of the implications of the opinion relative to the issuing auditor's conception and yet still may make a decision consistent with the issuing auditor's conception (e.g., seek additional information on asset realizations). Nev-
67 citations
TL;DR: In this paper, the authors examined the behavior of many statistical procedures commonly used in auditing, based on simulated audit populations constructed by extrapolating characteristics of errors found in audits of four actual populations.
Abstract: Most modeling and analysis of audit populations has been based on surprisingly little formal study of actual empirical evidence. The single major empirical investigation to date has been the pioneering work of Neter and Loebbecke [1975; 1977]. This study examined the behavior of many statistical procedures commonly used in auditing, based on simulated audit populations constructed by extrapolating characteristics of errors found in audits of four actual populations. Neter and Loebbecke made a thorough examination of the four audit populations and reported on both the shapes of the book value distributions and error characteristics including error rate, magnitude, and changes in both rate and magnitude as a function of book value. In spite of their limited number, these four populations represented considerable variety in terms of type of account, degree of skewness, error rate, and balance of errors between underand overstatements. The effective size of the empirical data base was greatly expanded by the authors' careful control of these error characteristics in creating simulated populations with varying error rates. A major conclusion of the study was that a number of widely used statistical procedures, particularly those adopted from the sample survey literature, can be seriously misleading in the auditing context. This conclusion concurs with that of Kaplan [1973], who based his analysis on
39 citations
TL;DR: The ICA Communication Audit as discussed by the authors was developed and tested by ICA (International Communication Association) Division IV, between 1974 and 1977, and it has been used for evaluation of organizational communication processes and outcomes.
Abstract: This study brings to light evidence on the benefits of a methodology for evaluation of organizational communication processes and outcomes—the ICA Communication Audit. The audit procedure was developed and tested by ICA (International Communication Association) Division IV, between 1974–1974. Sixteen field tests of the audit have been conducted from 1974–1977. This study undertook an “after” survey of the 16 audited organizations to determine the degree to which the audit was perceived to improve organizational communication effectiveness as well as overall organizational effectiveness. The findings confirmed the ICA Communication Audit as a valid diagnostic methodology and organization development intervention technique which improved both communication awareness and processes in a majority of audited organizations.
24 citations
TL;DR: In this paper, the authors present the results of a nationwide audit of racial discrimination in housing, which is used as a baseline for measuring changes in the extent and nature of housing discrimintion and as a means of implementing social change on local and national levels.
Abstract: Ten years ago, competent scholars thought it was impossible to measure racial discrimination directly. In 1977, HUD spent $1 million to measure the nature and extent of racial discrimination in housing. This nationwide Audit was the culmination of seven years of prior auditing conducted by local volunteer community organizations across the country. The Audit is a quasi-experimental field survey, which is used not only as a baseline for measuring changes in the extent and nature of housing discrimintion, but also as a means of implementing social change on local and national levels. Four action approaches have used Audit findings to expand equal housing opportunities for blacks: Legislation, Negotiation, Remuneration, and Litigation. These are illustrated in six local case studies. The nationwide Audit differed from prior community Audits in five ways, indicating rigorous controls and standardization. Results of the HUD Audit, though incomplete, reveal persistent massive racial discrimination in housing, w...
23 citations
TL;DR: The greatest correspondence between recall and record is for the local authority meals-on-wheels and home help services and the least for the more sporadic medical services and appliances.
TL;DR: The results from both audits indicate that while there is evidence of a strong hospital-type of physician interaction for many of the diagnoses, there was no significant overall difference in performance between USMG and FMG attending physicians.
Abstract: To determine whether patterns of differences in performance exist between United States Medical Graduate and Foreign Medical Graduate attending Physicians, two types of inpatient hospital audits (Payne Process Audit and the Joint Committee on Accreditation of Hospitals' Performance Evaluation Program-P.E.P. Audit) were conducted in 22 Maryland and Pennsylvania non-federal, short-term hospitals. A total of 6,980 medical records were abstracted from eight diagnostic categories for 1,321 attending physicians; 985 of which were USMGs and 331 were FMGs. The results from both audits indicate that while there is evidence of a strong hospital-type of physician interaction for many of the diagnoses, there was no significant overall difference in performance between USMG and FMG attending physicians. The largest and most consistent differences in physician performance were associated with hospital characteristics, not physician characteristics.
TL;DR: The audit of patients' records did not show a significant correlation between recorded care processes and treatment outcomes, but it did reveal the extent to which the Extended Care Unit's goals were reflected in the care process.
Abstract: To assess whether the objectives of a new Extended Care Unit were reflected in the care of the patients and in the outcome of that care, an audit of the patients' records was performed. The audit sample involved 101 geriatric patients who had been admitted to the Unit for rehabilitation therapy, and then discharged. The study included assessment of the records for compliance with individual audit criteria, examination of the records in terms of a composite audit score, and analysis of the relationship between these scores and three outcome indices. Although the audit did not show a significant correlation between recorded care processes and treatment outcomes, it did reveal the extent to which the Unit's goals were reflected in the care process.
Journal Article•
TL;DR: It is suggested that the continuous use of encounter forms can accurately reveal the prescribing habits of general practitioners and self-audit can be performed on a continuing basis with little disruption of the general practitioner's normal routine.
Abstract: General practitioners' prescribing habits were studied using encounter forms during a period of three years. Analysis of the first year's forms revealed examples of inappropriate prescribing, so an audit was undertaken on the treatment of fungal skin infections and coughs and colds in children. Data collection was continued for a further year to measure any changes in prescribing. Analysis after audit showed that more appropriate prescribing had reduced the number of drugs prescribed as well as the number of repeat consultations needed before resolution of the problem. These findings suggest that the continuous use of encounter forms can accurately reveal the prescribing habits of general practitioners. Self-audit can then be performed on a continuing basis with little disruption of the general practitioner's normal routine.
TL;DR: In this article, the authors proposed a more systematic approach to audit planning using the concept of materiality allocation to plan the assignment of audit effort to various phases of the audit, with the ultimate goal of making possible more efficient audits.
Abstract: The purpose of the research described in this paper was to develop and test the feasibility of a new and more systematic approach to audit planning. The focal point of the proposed approach is the use of the concept of materiality allocation to plan the assignment of audit effort to various phases of the audit. The ultimate goal of the proposed approach is to make possible more efficient audits, that is, audits which achieve greater levels of assurance at reduced audit costs. Increasing pressures faced by the auditor with respect to audit quality control, monitoring of questionable payments, reporting on internal control, detection of management fraud, and so forth, could lead to an escalation of audit costs. However, a countervailing force operating to inhibit such escalation is the increasingly competitive nature of the auditing industry (Bernstein [1978]). Thus, the auditor is under pressure to provide more services, perform better audits, and charge his clients less. Clearly these factors point to the need for more efficient auditing methods. As stated by Albrecht [1977, p. 50]: " ... it is clear that resistance to increased audit fees and a changed audit environment require that we carefully consider ways to improve the audit." More than ever before, the auditing profession needs to develop techniques which enable the auditor to attain maximum levels of assurance at minimum audit costs. As the professional accountant well knows, planning is the key to success in this type of environment.
TL;DR: The use of a clinical algorithm to help overcome problems which have hampered development of effective medical audit programs, including inadequate patient data, unreasonable evaluative criteria and insensitive audit procedures is demonstrated.
Abstract: Assuring high quality medical care has remained an elusive goal because of several problems which have hampered development of effective medical audit programs: inadequate patient data, unreasonable evaluative criteria and insensitive audit procedures. The present study demonstrates the use of a clinical algorithm to help overcome these problems. An examination of medical record data from a series of 703 laceration patients treated in an emergency service yielded only 27 cases (4 per cent) with medical records sufficiently complete to use for auditing physician compliance with algorithmic criteria. Substituting a structured checklist for the handwritten note increased this rate to 86 per cent. A computer-assisted branching audit of 1,400 laceration cases demonstrated that 1) physician compliance with an algorithmic instruction varied significantly (p less than .001) according to the specific instruction, and 2) compliance with a given instruction varied significantly (p less than .001) across different providers. These results underscore the need for medical audit with educational feedback which is provider specific.
TL;DR: An attempt to audit the nature and quality of the care provided for the known epileptics in a general practice of 8500 patients is reported on.
Abstract: The care provided for epileptic patients has been criticised in the Reid report,' by Hopkins and Scambler,2 and by Reynolds.3 Criticisms have included poor communication between specialists and general practitioners, lack of continuity in care, and inappropriate drug treatment. We report on an attempt to audit the nature and quality of the care provided for the known epileptics in a general practice of 8500 patients.
TL;DR: In this article, the authors examine the workings of a corporate audit committee that operated in the mid-nineteenth century, which functioned as "auditor" for the company since there was no established public accounting profession in the U.S. at that time.
Abstract: Board of directors' audit committees are becoming an increasingly popular vehicle for enhancing the objectivity and independence of auditors and overseeing the financial information generating process. This is occurring at a time when directors and auditors are facing criticism and increased litigation due to corporate failures and disclosures of illegal or questionable payments. This article examines the workings of a corporate audit committee that operated in the mid-nineteenth century. The committee functioned as “auditor” for the company since there was no established public accounting profession in the U.S. at that time. They disentangled the financial affairs of the company and probably directly contributed to the replacement of the President of the company. Although the activities of corporate audit committees have changed or evolved considerably through the years, both the 1870 corporate audit committee and modern corporate audit committees have pursued a common goal of achieving accuracy and comp...
TL;DR: A survey of prophylactic antibiotic-prescribing habits among chiefs of surgical services of the Veterans Administration yielded a 99% response, compared with guidelines set by an expert committee on antimicrobial use for the VA central office.
Abstract: A survey of prophylactic antibiotic-prescribing habits among chiefs of surgical services of the Veterans Administration yielded a 99% response. These responses have been compared with guidelines set by an expert committee on antimicrobial use for the VA central office. Assuming that 100% concordance with the standards of the committee is a desired state, the average hospital is approximately one third away from this goal (average score, 62.4%). The majority of errors were those of overuse rather than underuse. The size of the service and the existence of a university affiliation had no influence on the results. Feedback to the chiefs of service regarding the use of antibiotics was informal and tended to be carried out on rounds rather than as a result of formal audits. Most senior surgeons indicated that they would be willing to be influenced by audit guidelines. ( JAMA 241:717-718, 1979)
TL;DR: This paper reviews the purposes and methodologic requirements of conclusion-oriented research for evaluating outcomes of consultation-liaison (C-L) teaching in psychiatry, and useful guidelines are provided for the educator wishing to conduct conclusion- oriented C-L research to determine teaching effectiveness.
AARP1
TL;DR: In this paper, policies of higher education institutions and state governments regarding adoption of free or reduced tuition for older learners were analyzed regarding the adoption of such a policy, and the results indicated that two-year and public institutions were more likely to have adopted such policies, as well as special learning activities.
Abstract: Under the sponsorship of the National Retired Teachers Association and the American Association of Retired Persons, policies of higher education institutions and state governments were analyzed regarding adoption of free or reduced tuition for older learners. Results indicate that two‐year and public institutions were more likely to have adopted tuition policies, as well as special learning activities; two‐year institutions were more likely to offer courses for audit, while four‐year institutions were more likely to offer courses for credit; support services were generally lacking; and 25 states had adopted no tuition policy regarding older learners, while 22 states had adopted such legislation and it was pending in 4 states.
TL;DR: The sensitivity of the DT approach to parameter misestimation was examined by comparing the model's expected costs with the expected costs of traditional approaches over a range of arbitrarily chosen parameter levels and the approach was found to be relatively sensitive to the variable cost of sampling.
Abstract: A decision theory (DT) approach to audit sampling in substantive testing was recently proposed by Kinney [1975]. The DT approach differs from traditional approaches in that the sample size chosen is that which minimizes the expected cost of the sum of audit decision errors and audit (sampling) evidence. The posterior probabilities of audit errors are thus conditioned by the cost of the errors and by the cost of error protection (i.e., audit evidence). Traditional approaches ignore explicit considerations of the cost of audit decision errors and implicitly capture such considerations in the ex-ante specification of appropriate or acceptable Type-I and Type-II error risks (alpha and beta). Thus, for fully specified costs, the traditional approach at best will equal the expected cost of a DT solution and will often have a much higher expected cost. Kinney examined the sensitivity of the DT approach to parameter misestimation by comparing the model's expected costs with the expected costs of traditional approaches over a range of arbitrarily chosen parameter levels. For the parameter levels chosen, the DT approach was found to be relatively sensitive to the variable cost of sampling and the ratio of a material error to the population standard deviation. Since the variable cost of sampling seems relatively easy to estimate in practice and since the material error/standard deviation ratio is required under traditional sampling plans, the approach was deemed to be at least worth additional consideration and experimentation. However, this conclusion was based
Journal Article•
TL;DR: The imposition of a rigid system of medical audit throughout the NHS would be inappropriate at this time; nevertheless, every hospital and general practice could usefully consider what informal methods of audit should be employed.
Abstract: The imposition of a rigid system of medical audit throughout the NHS would be inappropriate at this time; nevertheless, every hospital and general practice could usefully consider what informal methods of audit should be employed. Most hospitals should try weekly death and complication meetings in addition to their other postgraduate activities. Greater attention is required to ensure that the medical records are improved in both hospital and general practice. Metcalf's (1979) suggestion for auditing GP work seems feasible. As medicine becomes more complicated in terms of techniques and team activities there is a greater need for more systematic methods of defining and measuring standards of care and feeding back this information. Much more research is needed to determine whether process or outcome studies are preferable, and structure and patient risks must be taken into account. Whatever system is devised the medical profession will accept it provided it is fair, educational, and shown to benefit the patient.
TL;DR: The authors describe their experience with a routine Medicaid audit and discuss the damage such a procedure can do to the trust between psychiatrists and patients, confidentiality, doctors' reputations, transference reactions, and patients' own emotional states.
Abstract: The authors describe their experience with a routine Medicaid audit and discuss the damage such a procedure can do to the trust between psychiatrists and patients, confidentiality, doctors’ reputat...
01 Jan 1979
TL;DR: Methods for accurate record keeping should be developed to allow prescribing performance to be assessed but above all those responsible for medical training should foster the quality of self-criticism and the quest for high standards of prescribing practice in their students.
Abstract: Medical audit is defined, the place of medical audit is discussed and the particular need for therapeutic audit emphasized. Two major types of audit, self-audit and peer-group audit, are outlined and examples presented illustrating how the concept of audit may be applied to therapeutics with special reference to drug information centres, feedback of drug prescribing data, drug handling systems and drug formularies. When drug information on prescribing practice from these sources is disseminated to the prescribers without value judgements being made, the component of self-audit is predominant in contrast to drug information dealing with prescribing appropriateness, in which peer-group opinion is expressed. Methods for accurate record keeping should be developed to allow prescribing performance to be assessed but above all those responsible for medical training should foster the quality of self-criticism and the quest for high standards of prescribing practice in their students.
01 Sep 1979
TL;DR: In this paper, the results of detailed engineering audits performed at 41 institutions owned by the State of Minnesota are described and analyzed, including community colleges, state universities, office buildings, hospitals, and Dept of Transportation regional facilities.
Abstract: This report describes the contents and analyzes the results of detailed engineering audits performed at 41 institutions owned by the State of Minnesota. These institutions include community colleges, state universities, office buildings, hospitals, and Dept. of Transportation regional facilities. The audits covered 270 buildings and include 2010 individual energy conservation recommendations.