H. Gin Chong

Auditors and Materiality

There are many definitions of materiality and such differences in definition show that there is great concern about the applicability of materiality in the auditing profession. Various materiality guidelines have been recommended by both academic researchers and accounting bodies, but the Auditing Practices Board in the UK has yet to recommend a guideline of its own. Looks at the recommendations put forward by those researchers and accounting bodies and the implications and possible pros and cons of having structured guidelines by the auditing profession in the UK. Concludes with a recommended materiality guideline which the Auditing Practices Board should seriously consider and the possibility of applying computer‐based decision aids as a tool to improve efficiency and effectiveness of decision making by the auditors.

Harmonisation of government audits in the People’s Republic of China

The National Audit Office of the People’s Republic of China issued 38 auditing standards and guidelines on 1 January 1997. This was the culmination of a variable historical development during which audit activity was either emphasised or downplayed altogether. With the open door policy and the socialist market economy, audit is again very much back on the agenda. Audit independence is a cornerstone of this great auditing leap forward, with CPA firms in a supporting role. There is a need to train up auditors to assume their role of responsibility in an economy which has huge growth potential, and which excites world‐wide interest.

Audit and legal implications of PCAOB’s inspections among BRIC

Purpose – This paper aims to analyze Public Companies Accounting Oversight Board (PCAOB) inspection reports on audit reports of those inspected accounting firms in Brazil, Russia, India and China (BRIC). In meeting the requirements of the Sarbanes-Oxley Act, the PCAOB conducts inspections on audit reports of firms listed on the New York Stock Exchange. Design/methodology/approach – The reports include those submitted by both the US audit parent firms and their secondary firms located outside the USA. In each PCAOB report, it unravels the nature of audit deficiencies. The focus is on Big Four because they play a dominant role in the marketplace and issuers’ market capitalization. All the seven-year deficiencies are documented since publications of the reports from 2004 to 2012. Findings – Of the 37 reports, 19 (51 per cent) were issued relating to audits conducted by the Big Four. Out of these 19 reports, 10 (53 per cent) contain inspection criticism. These include audit quality and common recurring audit ...

The use of performance measurements in the biotechnology sector

Despite its substantial contributions to a country’s Gross Domestic Product (GDP), there is no known systematic study on the governance of the biotechnology sector and how its performance is measured. A questionnaire survey was conducted with the firms registered in the UK Biotechnology Handbook . With a response rate of 38% and rigorous analysis, the results show that, when measuring performance, managers use both the financial and nonfinancial indicators, but emphasise the financial indicators more. The financial indicators include turnover, profit margins, cash reserve and liquidity, while the nonfinancial indicators are about meeting the customers’ needs and expectations. More specifically, the managers place attention to the reporting of the environmental issues of their firms, reflecting their readiness to excel in social corporate responsibilities. The results have implications for the biotechnology sector and regulators for public policy.