Browsing by Author "Singh-Sewpersadh, Navitha"

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    Open Access
    A Conceptualization of remote Auditing framework
    (2024) Dlamini, Zenani; Singh-Sewpersadh, Navitha
    Auditing was an activity that was typically performed from the audit client's premises or the auditor's offices. If the audit client had significant components in other countries, the lead auditor would appoint a component auditor within that country to perform the audit work to support the group engagement team's audit opinion. Globalization and the COVID-19 pandemic changed the audit environment leading to the environment becoming more digitized. The pandemic enforced a work-from-home strategy; thus, audit fieldwork had to be performed remotely. Studies around the remote auditing model suggested that it would lead to lower audit quality and professional skepticism due to the lack of physical presence. Furthermore, previous research on the remote auditing model was performed from the perspective of component auditors, internal auditors, or information technology (IT) auditors. This study aimed to explain the structure and positioning of the remote audit environment in the traditional audit framework. To date, no academic study has explored the structure of the remote audit environment and its position in the context of the traditional audit framework. Using the SCP paradigm and the Unified Services Theory, this study filled an important research gap in the auditing literature. It was used as a base to understand the remote audit environment. This qualitative study collected data using semi-structured interviews to answer the research questions. The findings from this study found that the remote auditing model was a preexisting model which could have been implemented before the COVID-19 pandemic; however, there was no demand for it. The pandemic's impact and technological changes exacerbated the need for a remote audit environment. The results also indicated that remote audit firms operated as a support structure to traditional audit firms. However, they offered a level of competition from a South African perspective. Furthermore, in assessing the audit quality measures in the remote audit environment, it was noted that they were no different from those of traditional audit firms. Finally, the results indicated the presence of some limitations to the remote audit environment. Keywords: remote audit, audit quality, technology, consequence management, global business services, COVID-19
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    Open Access
    An investigation into unifying early warning prediction models
    (2023) Grieve, Jason; Singh-Sewpersadh, Navitha
    Forecasting financial distress has been regarded as a serious and significant problem, and if not signalled in time, has catastrophic ramifications on worldwide economies. Financial distress models are in existence and have been tested with varying results of success. However, there are varying definitions of financial distress which have contributed to the in-cohesiveness of financial distress literature where users have a limited ability to know what condition of financial distress is being forecast. Following a comprehensive literature review, it was found that financial distress models (Altman, 1968; Beaver, 1966; Gupta, 1983; Ohlson, 1980; Taffler, 1983; Zmijewski, 1984) have not been unified into an early warning signal (EWS) framework according to the specific financial distress conditions they have abilities to predict. Findings also found that risk (Beneish, 1999; Schilit, 2003) and earnings management measures (Sloan, 1996) play a significant role in financial distress forecasting but have also yet to be unified into an EWS framework. This study aims to unify financial distress, risk prediction and earnings management measurements into an EWS framework developed by Tavlin et al. (1989) to enable users the ability to identify the type of EWSs predicted and contributing reasons reducing the fragmentation of the extant literature. The investigation period of the study was for six years (2016 to 2021) using paired sampling methodology with a final sample of 72 delisted and 72 listed companies from the Johannesburg Stock Exchange (JSE). The study employed descriptive analysis to interrogate the results. The results indicated that financial distress models (Altman, 1968; Beaver, 1966; Gupta, 1983; Taffler, 1983; Zmijewski, 1984) and risk and earnings management measures (Beneish, 1999; Schilit, 2003; Sloan, 1996) could be unified into an EWS framework. Key words: bankruptcy prediction; credit risk; probability of default (PD); early warning signals; financial distress, JSE; risk; earnings management
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    Open Access
    Automation investment appraisals
    (2022) Vorster, Rikus C; Singh-Sewpersadh, Navitha
    Intelligent automation software technology is key to remaining competitive in the current growing digital landscape. Appropriate techniques should be used to appraise such investments and make correct automation investment decisions. After a comprehensive literature review, three limitations on automation investment decisionmaking were found in the extant literature: (1) time value of money not considered, (2) interpretative and definitional issues related to the popular Return on Investment (ROI) technique, and (3) the widely recommended Net Present Value (NPV) technique appeared not to have been used. This study aims to identify which automation investment appraisal and valuation techniques are used in South Africa in practice and the relevant metrics applied, to assess these for potential gaps in their application and to ascertain the quality of automation investment decision-making. An online survey questionnaire was distributed to organisations that have invested in automation technology in South Africa to gather data from automation consumers and automation consultants. Payback period, ROI, and budget availability were the most common appraisal techniques used by respondents, followed by popular Discounted Cash Flow (DCF) capital budgeting techniques, NPV and Internal Rate of Return (IRR). The results further point toward deficiencies in the application of appraisal techniques compared to finance literature, which indicates suboptimal quality automation investment decision-making. Important unquantified qualitative factors influencing the decision-making process were also identified. These qualitative factors were considered by respondents more often in their decision-making process than quantitative factors. Future research in this area should include quantifying qualitative factors to improve the quality of automation investment decision-making.
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    Board attributes, financial distress and fruitless and wasteful expenditure in south african state-owned enterprises
    (2024) Thusini, Philani; Singh-Sewpersadh, Navitha
    Purpose: Poor financial viability, perpetual inefficiencies and wastage are some of the challenges facing South African state-owned enterprises (SOEs). SOE boards are often criticised for failing to protect the financial sustainability of these entities and prevent the incurrence of fruitless and wasteful expenditure. Therefore, this study seeks to investigate the relationship between board attributes and financial distress and the relationship between board attributes and fruitless and wasteful expenditure in South African SOEs. Methodology and research design: The study adopted a quantitative approach and used ordinary least squares regression on a sample of 27 South African SOEs over a five-year study period from 2016 to 2020. Five board attributes, being: board size, board activity, board tenure, board gender diversity, and board education, were selected as the independent variables of the study. SOE size and audit opinion were identified as the control variables. Findings: The study results indicate that board size and board gender diversity have a negative and significant relationship with financial distress. However, a direct and statistically significant relationship was found between board education and financial distress. No statistically significant relationship was found between the study board attributes and fruitless and wasteful expenditure. Research implications: The findings provide policymakers with insight on the board attributes that influence financial distress and fruitless and wasteful expenditure in SOEs. Originality/value: Whilst there is a plethora of studies on board governance, many of these prior studies have focused on private sector companies. This study is, therefore, useful in understanding board attributes that affect financial distress and fruitless and wasteful expenditure in the context of South African SOEs. Moreover, we are not aware of any prior study that has empirically tested the relationship between board attributes and fruitless and wasteful expenditure.
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    Understanding the societal resistance to the uptake of AI and other emerging technologies in auditing firms: A South African perspective
    (2024) Van Staden, Jayde; Singh-Sewpersadh, Navitha
    Digital transformation has seen the uptake of emerging technologies at a rapid rate, now more than ever after the COVID-19 pandemic. Audit firms are no exception to this, yet many auditors and audit trainees still show a reluctance towards integrating technology into their work processes. Considering that almost 80% of all Fortune 500 accounting functions will be automated within the next decade, it is imperative to analyse the areas that South African firms can improve in, to gain a seat at the global table, enhance their competitive advantage and leverage technology to improve socioeconomic issues like unemployment that plague the South African economy. Using Qualtrics as a method of enquiry and descriptive analytics to determine the average mean for each category of question, 100 usable questionnaire responses from varying age groups, roles and firm sizes demonstrate that social factors, such as, the lack of support from senior management, as well as limited training and guidance relating to technology integration, are still holding them back. The resource gap between small and large firms seems to be increasing with the onset of emerging technologies altering the audit landscape, as small firms are constrained by financial and nonfinancial constraints such as costs and lack of dedicated IT personnel. Luckily, these constraints are not deterring small firms from seeing the benefits of audit integration, while large firms are pursuing it at a rapid rate.