The Impact of Establishment of Audit Committee and Internal Audit Unit on Improvement of the Financial Accountability of the Universities and Research Institutions

Document Type : Research Paper

Authors

Abstract

Before 2005, financial accountability of using Iran universities' financial resources was held in the hands of treasury officers who were selected by the ministry of Finance and Economic affaires. From 2005, based on the fourth economic, culture and social program act, the financial control system changed and financial managers were selected by the heads of universities. This has made these universities presidents responsible for financial accountability of deploying and expending financial resources to board of directors and the supreme audit court since 2005.
Because of this financial control system change, it seems that the establishment of Internal Audit unit and Audit Committee is essential in order to improve the financial accountability of such organizations. In this research we have tested this matter by means of questionnaires filled by accounting and auditing experts (Including financial officers, financial managers, independent auditors and supervisors) of those universities. According to our findings, the establishment of Internal Audit unit and Audit Committee in universities will have a major impact on improving the financial accountability of the mentioned organizations.

Keywords


- باباجانی، جعفر (1384)، «استقلال اعطایی به دانشگاهها و موسسات آموزش عالی (فرصت یا تهدید)»، فصلنامه مطالعات حسابداری.
- باباجانی، جعفر (1382)، «تحلیلی نظری پیرامون سیستم نظارت مالی کشور از منظر پاسخگویی»، بررسیهای حسابداری و حسابرسی، صص 130-97
- کمیته تدوین استانداردهای حسابرسی، (1386)، «استانداردهای حسابرسی»، تهران: سازمان حسابرسی.
 
- Azad, A.,(1994),“Operational auditing in US colleges and universities”, Managerial Auditing journal, Vol. 9, No. 2, pp.12-19.
- Bavly, D., (1999), " Corporate governance and accountability: what role for the regulator director and auditor?" The Internal Auditor, pp. 65-72.
- Braiotta, L., (1994), "The Audit Committee handbook”, third edition, New York: John Wiley and sons Inc.
- Chamberlain, D., Gordon, G. and Plunkett, L., (1993), "Improving accountability in colleges and universities ", Internal Auditing, spring.
- Eckhart, K. S., Widener, S. K. and Johnson, L. E. (2001), "Governance and local government ", The Internal Auditor, Vol. 58, No. 3, pp. 51-55.
- Geiger  M.A., (2002), "Outsourced internal audit services and the perception of auditor independence ", The CPA Journal, Vol. 72, No. 4.
- Ian, P. and Bernard, C., (1995), “The role of audit committees in UK universities”, managerial auditing journal, Vol. 10, No. 6, pp.10-16
- IIA, (1999), "Definition of internal auditing,” Altamonte Springs, Florida: Institute of Internal Auditors.
- Irwin, T., (2009), "Characteristics of effective audit committees in federal, state and local governments ", The Journal of Government Financial Management, pp. 44-48
- Jackson, N., (1997), "Internal academic quality audit in UK higher education ", Quality Assurance Education, Vol. 5, No. 1.
- Kelvin, A.A., (2003), “Opening speech ", paper presented at the National Conference on Internal Auditing.
- Marlin, D., (2008), "Effective working relationships between audit committees and internal audit", J manage Gov DOI 10.1007/s
- Nashwa, G., (2005), "The role of audit committees in the public sector ", The CPA Journal, pp. 42-43.
- Nix, H. and Nix, D., (1996), “The audit oversight function in municipalities of greater than 100,000 population when an audit committee is not used," Arlington, Vol. 45.
- Raghunandan, K., (2001), "Audit Committee Composition, Gray Directors and Interaction with Internal Auditing," Accounting horizons, Vol. 15, No. 2.
- Scarbrough, D. P., Rama, D. V. and Raghunandan, K., (1998), "Audit Committee Composition and Interaction with Internal Auditing: Canadian evidence," Accounting horizon, Vol. 12, No. 2.
- Sterck, M., Scheers, B. and Bouckaret, G., (2005), "The Modernization of the Public Control Pyramid: International Trends ", bestuurlijke organisatie vlaanderen.
- Zabihollah R., Kingsley, O., Minmier, G., (2003) "Improving corporate governance: the role of audit committee disclosures", Managerial Auditing Journal, Vol. 18, Iss. 6/7, pp. 530 – 537.
- Zamzulaila, Z., Susela, D. S., and Zarina, Z.,  (2006), “Internal auditors: their role in the institutions of higher education in Malaysia”, managerial auditing journal, Vol. 21, No. 9, pp.892-904.