Yahya Hassas Yeganeh; E. Vahidi Elizeei
Volume 2, Issue 7 , October 2004, Pages 1-31
Abstract
In year 1377, the Auditing organization in Iran issued its Statement of Auditing Standards 40 (SAS 40): "Accounting and Internal Control System and Audit Risk Assessment". The standard identifies inherent risk as one of the three components of audit risk; inherent risk being defined as "the ...
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In year 1377, the Auditing organization in Iran issued its Statement of Auditing Standards 40 (SAS 40): "Accounting and Internal Control System and Audit Risk Assessment". The standard identifies inherent risk as one of the three components of audit risk; inherent risk being defined as "the susceptibility of an account balance or class of transactions to material misstatement". If the inherent risk is low, less substantive testing is required, with possible resultant savings in staff time and audit costs. It is thus beneficial for the audit firms and clients to assess adequately the inherent risk element of an audit assignment to ensure that audits are carried out as efficiently and effectively as possible.
This research project focuses on inherent risk and using a questionnaire survey investigates 143 auditors’ perception of the importance of certain factors which may determine inherent risk. The finding of the study suggests that variables identified in the literature as being closely associated with inherent risk factors are regarded in a similar fashion by auditors; variable such as bonus schemes tied to management earnings, a high turnover rate in top management personnel, a company reputation for taking unusual business risks and history of material errors are believed to be the major determinants of inherent risk. Finally, the evidence revealed that (1) misunderstanding the significance of the risk factor is due to the disregard of various meaning of the words.(2) Auditors had difficulty in distinguishing between inherent risk and control risk factors.
Hamid Khaleghi moghaddam; M. Azad
Volume 2, Issue 7 , October 2004, Pages 33-54
Abstract
Profit as the most important factor of measurement of an operation of an entity, is one of the topics of accounting which has secured its special place in the theoretical issue for a number of years. Accounting from the beginning of 20th century has started its activity in the scientific and classic ...
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Profit as the most important factor of measurement of an operation of an entity, is one of the topics of accounting which has secured its special place in the theoretical issue for a number of years. Accounting from the beginning of 20th century has started its activity in the scientific and classic form. In the last number of decades, especially from the year 1960 onward after efficient market hypothesis (EMH), with the start of experimental --evidential researches by Ball and Brown about the content of information pertaining accounting earning was able to stable its theoretic fundamentals on the basis of evidence. In this research, the content of information of predicted profit is studied. The results reported here indicate that Earning Forecast by companies possessing information and efficiency content and from this purpose the importance of prediction of accounting earning due to its role and effect in the decision takings of users especially investor's is considerable.
Mohsen Khoshtinat; Z. Namazi
Volume 2, Issue 7 , October 2004, Pages 55-76
Abstract
In time past many ratios such as current ratio and quick ratio had been used for evaluations of corporation liquidity authority and ability in debt repayment.
But in recent years because of some deficiency and defection of these two ratios some other ratios such as liquidity index, cash comprehensive ...
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In time past many ratios such as current ratio and quick ratio had been used for evaluations of corporation liquidity authority and ability in debt repayment.
But in recent years because of some deficiency and defection of these two ratios some other ratios such as liquidity index, cash comprehensive liquidity index, net liquidity index, cash conversion cycle, lambda and etc. have been presented.
In this essay in addition to presentation of these modern ratios via calculation of modern ratio correlation with traditional ratios, we will discuss to some extent the informational identify of them. For this reason all active corporation in food industry of negotiable papers exchange have been chosen and ratios for a period of 5 year (1377-1381) have been calculated and the correlation of them have been calculated by SPSS(a software).
The results of this research show that although the ratios have a near relationship with traditional ratios but they are some differences that can play an important role on our decision and they contain various and more information than traditional ratios and can help users to make their decision better than before.
S.M. Shariat Panahi; Y. Badavar Nahandi
Volume 2, Issue 7 , October 2004, Pages 77-96
Abstract
Financial experts in the response to critics of EVA, propose the refined form of EVA that focuses on relevance of information versus its reliability. In other words' this measure that we call it "REVA", computes the opportunity cost of used resources in the base of their market values. In ...
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Financial experts in the response to critics of EVA, propose the refined form of EVA that focuses on relevance of information versus its reliability. In other words' this measure that we call it "REVA", computes the opportunity cost of used resources in the base of their market values. In this research we studied information content and explanatory power of REVA for different measures of risk-adjusted stock return. The hypothesis of this study was tested for 50 active corporations introduced in the research period. We used the available statistical society of corporations accepted in Tehran stock exchange, and tested the Correlation degree between variables of the research and the explanatory power of REVA for the changes of different measures for risk-adjusted stock return. The results of this study indicate that, there is a weak positive correlation between REV A and measures of risk-adjusted stock return, and a (differential or abnormal return)' REV A (total risk-adjusted stock return), and RVOL (systematic risk-adjusted stock return) orderly have the greatest correlation coefficient with REV A. It means: rREVA,α > rREVA,RVAR > rREVA,RVOL
Gholamreza Islami; Hossein Zarei
Volume 2, Issue 7 , October 2004, Pages 97-122
Abstract
This empirical study has been done with the goal of developing auditing knowledge and the efficiency of its operations when using the statistical analytical procedures.
In this research, eight alternative models have been evaluated, including five regression models, one time - series model ( consus ...
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This empirical study has been done with the goal of developing auditing knowledge and the efficiency of its operations when using the statistical analytical procedures.
In this research, eight alternative models have been evaluated, including five regression models, one time - series model ( consus X-Ii) and two non-statistical models (Martingale and sub-Martingale). Both financial and non-financial data were collected from a sample of petrochemical companies for the period march, 1998 through March 2001. The information was used to predict sales revenue and production expense account balances.
According to the results, regression models have better performance for predicting account balances in performing auditing analytical procedures in comparison to Two other models.
Logarithmic regression has been evaluated as the best statistical analytical procedure. The foresaid procedure has a constant performance in sample companies of the industry. In performing statistical analytical procedures, monthly models perform better than seasonal ones. Pooled models have a better ability for prediction than single company models.
Furthermore, the results of this research show incremental benefits of using nonfinancial variable in performing statistical analytical procedures in auditing
