Journal of accounting, finance and auditing studies, Jun 21, 2024
This study critically evaluates Board Effectiveness (BE) within Maltese Public Sector Entities (M... more This study critically evaluates Board Effectiveness (BE) within Maltese Public Sector Entities (MPSEs), with a focus on five key aspects: board selection and appointment, board role, board composition, board remuneration, and board performance evaluation. Semi-structured interviews were conducted with twenty-two participants, including eighteen MPSE board members (BMs), a representative from the Malta Institute of Directors, two corporate lawyers, and one corporate advisor. The findings indicate significant deficiencies in BE, particularly due to a lack of transparency in the selection and appointment process. This process is often influenced by political loyalties, which exclude new talent and discourage competent individuals. The identification of BMs as Politically Exposed Persons (PEPs) further restricts the inclusion of diverse talent, particularly among entrepreneurs. Additionally, insufficient training for BMs and persistent political pressures have been found to hinder the fulfilment of fiduciary duties. Female representation on MPSE boards is notably low, and foreign appointments are rare, thereby weakening the overall board composition. Moreover, the remuneration for MPSE BMs is significantly lower than that in the private sector, adversely impacting the quality of BMs. Resistance to implementing performance evaluations, which could potentially reduce political protection, has also been observed to impede BE. This study underscores the necessity of strengthening corporate governance (CG) practices to enhance BE in MPSEs, which is crucial for fostering a thriving economy and creating a positive legacy for future generations.
Journal of corporate governance, insurance and risk management, Mar 31, 2024
This investigation addresses the issuance of preference shares by companies listed on the Malta S... more This investigation addresses the issuance of preference shares by companies listed on the Malta Stock Exchange (MSE), identifying key determinants and obstacles associated with these initiatives. Semi-structured interviews were conducted with 27 stakeholders, including representatives from 23 MSE-listed companies (MLCs), one MSE official, two stockbrokers, and an advisor from a leading global accounting firm. An evaluation of the financial distress faced by issuers prior to the issuance of preference shares was also undertaken. Despite the establishment of the MSE in 1992, preference shares have been issued by only two listed companies, indicating their minimal utilization as financial instruments within the Maltese market. The findings reveal that preference shares are primarily issued to meet financing needs, support corporate expansion, prevent control dilution, capitalize on favorable market conditions, maintain balanced capital structures, and enhance debt capacity. However, several barriers hinder the issuance of preference shares, including limitations inherent to the Maltese capital market, low investor interest, perceived complexity, and a general lack of understanding regarding this hybrid financial instrument. The study underscores the necessity for improved educational efforts concerning preference shares and elucidates the distinctive characteristics of the local market.
Purpose: This article lays out an analysis of the relationship between inflation and Maltese mont... more Purpose: This article lays out an analysis of the relationship between inflation and Maltese monthly stock returns, comprising of 139 observations. Design/Methodology/Approach: A series of statistical tests were used so that the final multivariate time series modela Vector Error Correction Model, was fitted to the data. The model results were corroborated to the findings from the qualitative data and previous empirical evidence. Findings: Findings indicate that stock returns are positively influenced by the previous month's returns and negatively influenced by inflation, where the latter factor takes 3 to 4 months to impact stock returns. Additionally, short-term interest rates and money supply seem to contribute indirectly to the negative inflation-stock returns relationship since both variables are statistically significant in explaining inflation. Long-term interest rates and industrial production variables are statistically insignificant in explaining both inflation and stock returns. Findings show that Maltese investors' focus is on high dividend pay-out and capital preservation.
Purpose: In this study, we examined the incidence and predictors of Reduced Audit Quality Practic... more Purpose: In this study, we examined the incidence and predictors of Reduced Audit Quality Practices (RAQP) as well as the consequences of burnout on job satisfaction, turnover intentions, and the work environment in Maltese Big Four audit firms. Methodology: A two-phase sequential mixed-methods approach was employed to achieve the objectives of the study. In the first phase of data collection, questionnaires were distributed to auditors in the Big Four firms in Malta and concurrent semi-structured interviews were conducted with thirteen audit staff members. After this data was analysed, the results were discussed with four audit partners from these Big Four firms, as part of the second phase of data collection. Findings: We found that role stressors lead to increased burnout levels, while resilience mitigates burnout. Consequently, burnout leads to lower job satisfaction, higher turnover intentions, higher RAQP, and strained relationships with colleagues. Moreover, this study found that less experienced auditors commit RAQP more often, although mostly in low-risk areas and when facing time pressure. Originality/Value: This study contributes to the understanding of factors influencing the incidence of RAQP, and the antecedents and consequences of burnout amongst Maltese auditors.
Purpose: The objectives of this study are twofold.: (i) to establish the extent of Board diversit... more Purpose: The objectives of this study are twofold.: (i) to establish the extent of Board diversity in both its major surface-level (i.e. age, gender, nationality and tenure diversity) and deep-level aspects (i.e. industry-specific, financial, legal and IT expertise) in selected Maltese Large Family Businesses (LFBs), and to establish whether any inherent characteristics of such entities are perceived as influencing the extent of such diversity and (ii) to assess the influences of such diversity aspects on the major Corporate Governance (CG) factors. This also involves ascertaining the extent to which such influences, if existent, are perceived as advantageous or disadvantageous. Design/Methodology/Approach: Semi-structured interviews were carried out with twenty-six interviewees, consisting of eleven directors, three company secretaries, a CEO, four CFOs, an Institute of Directors representative, four advisory partners, an audit manager and an audit director. Findings: LFB Boards are mostly composed of family members, mostly long-tenured and having a lack of diversity of expertise. Moreover, LFB inherent characteristics, particularly strong emotional ties, may reduce the likelihood of a LFB Board being diverse. Furthermore, tenure and age diversity are the diversity aspects most influential on CG, particularly on attaining effective succession planning. In addition, although the eight major diversity aspects do not influence the CG factors pari passu, they generally influence various CG factors advantageously. Practical Implications: LFBs should consider Board participation rather than Board membership for most family members in order to allow enough space for the involvement of
Purpose: The objectives of this study were (i) to ascertain the Board mix of selected Maltese Lis... more Purpose: The objectives of this study were (i) to ascertain the Board mix of selected Maltese Listed Entities (MLEs) and how this has changed, if in any way, in the years 2018-2022, (ii) to extract the impact of the main factors affecting the Board mix, and (iii) to assess the extent to which the Board mix is perceived as contributing to good Corporate Governance (CG). Methodology: A mixed methodology was adopted. Thirty-one semi-structured interviews were conducted with eleven directors, nine company secretaries, four CFOs and two CEOs of MLEs, together with three corporate advisors, one corporate lawyer and one MLE expert. Findings: Independent Non-executive Directors (INEDs) are appreciated in the Boards of MLE, but the Board mix varies significantly among MLEs. The main factors affecting the Board mix of MLEs are the scope and complexity of the entity's operations, CEO entrenchment, the directors' knowledge on the entity's key functions and the directors' nationality. NEDs (Non-executive Directors) and INEDs contribute towards strategy formulation, the prevention and detection of corporate irregularities, and enhanced transparency in financial reporting. Meanwhile, EDs (Executive Directors) contribute towards strategy execution and may even aid in preventing and detecting corporate irregularities. Originality/Value: Although much ink has been spilled on Board of Director issues, too few studies have as yet delved into the different types of directors. This paper sheds light on the
Journal of accounting, finance and auditing studies, Feb 4, 2024
The exploration of stakeholder perceptions concerning the elements and values underpinning the co... more The exploration of stakeholder perceptions concerning the elements and values underpinning the cooperative concept in Malta forms the core objective of this investigation. Employing semi-structured interviews, primary data was gathered from a diverse group of participants, including thirteen representatives from cooperatives, four from cooperative institutional bodies, and five experts within the cooperative field. The analysis reveals a notable deficiency among Maltese cooperative stakeholders in comprehending the foundational elements and values of the cooperative model. This lack of understanding is attributed to ongoing challenges such as persistent misconceptions regarding the adaptability of cooperatives to social objectives, gaps in pertinent education and training, and inadequate promotion of the cooperative paradigm. The findings suggest a critical need for stakeholders to accord greater priority to the socially relevant components of cooperatives-those designed to be integral to the concept-beyond the mere generation of annual financial surpluses. Such a shift in focus is posited as essential for fostering a deeper appreciation and application of cooperative values, benefiting not only individual entities but the broader cooperative movement. Moreover, the insights gleaned from the Maltese context offer valuable lessons for cooperative movements in other small European states, highlighting the universal applicability and potential of cooperative principles for economic development and social cohesion. This study contributes to the dialogue on cooperative development by elucidating the gaps in understanding and application of cooperative values among stakeholders, thereby offering a foundation for targeted educational and promotional strategies to enhance the cooperative model's implementation and perception.
Journal of corporate governance, insurance and risk management, Dec 31, 2023
Through a mixed-methods research approach, this study investigates the factors influencing the et... more Through a mixed-methods research approach, this study investigates the factors influencing the ethical conduct of Internal Auditors (IAors) in Malta, assesses their awareness of ethical dilemmas and threats alongside their obligations under the Institute of Internal Auditors' Code of Ethics (the Code), and evaluates how frequently and under what circumstances IAors refer to the Code. Interviews were conducted with twenty-two participants, including nine internal auditors from Maltese listed organizations (MLEreps), five from government entities (Govtreps), and eight outsourced auditors (Outreps). The analysis reveals that IAors' commitment to ethical principles is primarily driven by personal integrity rather than mere obligation to the Code, with personality and character standing out as the foremost predictors of ethical behavior. Nonetheless, the significance of a wellarticulated Code of Ethics, organizational culture, the efficacy of the audit committee, and auditors' experience in shaping ethical conduct was also noted. It was found that internal auditors, especially those within government organizations, are more frequently confronted with ethical dilemmas than their external counterparts due to the nature of their work involving scrutiny of colleagues' actions. Outsourced auditors (Outreps) face distinct challenges in maintaining confidentiality. Across all groups, the threat of over-familiarity was identified as a substantial risk to ethical integrity, with government auditors (Govtreps) additionally perceiving intimidation as a significant concern. Despite these challenges, the Code was viewed by many, particularly MLEreps, as insufficient in addressing the ethical issues and risks encountered. Although a majority of IAors exhibit a willingness to comply with the Code, only a small fraction actively consults and reference it in their reports. This has led to calls among Maltese IAors for an enhanced Code and clearer guidelines, highlighting a reliance on the Code of Ethics for Warrant Holders for further direction due to the lack of practical examples in the current framework.
International journal of Economics and Business Administration, Nov 30, 2023
Purpose: There is consensus in the accountancy profession that graduates of accounting programmes... more Purpose: There is consensus in the accountancy profession that graduates of accounting programmes must possess a broad skill set that goes beyond technical skills. Inherent in nontechnical skills, there is the recognition of emotional intelligence (EI) skills, which are deemed to be crucial for the success of the accounting profession. In light of this, the study (i) examines the gap or otherwise between graduates' and employers' perceptions of the value placed on EI and non-EI skills for a career in accounting with the Big-four or mid-tier accounting firms; (ii) examines the extent of development of such skills during the accounting programme at the University of Malta; and (iii) examines the extent to which graduates' perceptions converge with those of the employers in relation to the specific EI and non-EI skills that should be developed during the university's accounting programme. Design/MethodologyApproach: A mainly quantitative approach was adopted, where online questionnaires were distributed to big-four and mid-tier accounting firm warrant holders (WH) (n=222), together with recent University of Malta accountancy graduates (n=96), to gain insight into their perceptions on EI and graduates' skills. Findings: The findings show that both WH and graduates agree that a broad skill set, encompassing both EI and non-EI skills, is important for a career in accounting with accounting firms. Written and oral communication skills, integrative thinking skills and analytical skills are the most valued non-EI skills. It is also revealed that WH and graduates share similar views on which skills are relatively well developed in university. These include the non-EI skills of financial accounting, audit and assurance and the EI skills of teamwork and collaboration. WH and graduates also agree on which skills require further development at university, these being analytical skills, integrative thinking skills, oral communication and the EI skill of self-confidence.
Journal of corporate governance insurance and risk management, Nov 27, 2023
This investigation explores the transformative effect of the COVID-19 pandemic on the risk assess... more This investigation explores the transformative effect of the COVID-19 pandemic on the risk assessment processes employed by auditors. The primary focus is on how the pandemic has reshaped the identification and evaluation of risks, necessitating alterations in the timing, nature, and extent of risk assessment procedures (RAPs) in the audit risk assessment context. This study, through semi-structured interviews with audit partners and senior managers from Big Four and mid-tier firms in Malta, comprising a total of 15 interviews, delves into the evolving landscape of risk assessment. It has been observed that the pandemic demanded increased vigilance and effort from auditors in understanding clients' businesses and their operational environments. This heightened attention was crucial to identify emerging risks aptly. A shift in the RAPs was discerned, favoring inquiries and analytical procedures (APs) over traditional methods like observation and inspection. The incorporation of Information Technology (IT) tools has markedly transformed the approach to gathering sufficient and appropriate audit evidence, particularly in verifying inventories and property, plant, and equipment (PPE), along with third-party confirmations. Furthermore, the study identifies material risks such as going concern (GC), asset impairment (including plant, equipment, inventory, and receivables), and the impact of external events on companies. An important outcome of this shift is the increased reliance on Artificial Intelligence (AI) and blockchain-based applications, heralding a more efficient and effective risk assessment process. This evolution not only enhances audit quality but also serves the public interest more robustly. The findings imply a long-term impact on audit risk assessment, projecting a continued evolution in the post-COVID era. These insights contribute significantly to the discourse on audit practices in times of crisis, underscoring the need for adaptive methodologies and the integration of advanced technologies in audit procedures.
Purpose: This study aims to determine which barriers significantly hinder communication between t... more Purpose: This study aims to determine which barriers significantly hinder communication between the external auditor and management of Maltese equity listed entities, both from the auditors' and management's perspectives. It also explores what both parties believe could be carried out to eliminate or mitigate these barriers, and it compares and contrasts the perceptions of both parties in relation to the communication barriers and mitigation techniques. Design/Methodology/Approach: To attain these objectives, a qualitative research design was adopted. A total of twenty-three semi-structured interviews were carried out. The respondents consisted of eleven auditors and twelve finance representatives of Maltese equity listed entities. Findings: This research concluded that in Malta, the most frequent communication barriers encountered in the auditor-management relationship are the lack of understanding of accounting/auditing terminology, differences in perceptions, the failure to adhere to deadlines/timelines and language barriers. Consequently, to eliminate/reduce these barriers, the most effective mitigation techniques in the Maltese scenario were found to be the preliminary auditor-client meeting and the possession of an enhanced level of listening and communication skills. Originality/Value: This study raises awareness regarding the communication barriers between external auditors and management in the Maltese scenario and how these barriers can be mitigated. It therefore bridges a small state research gap about the communication
The aim with this paper is to show the differences in the performance of eight insurance companie... more The aim with this paper is to show the differences in the performance of eight insurance companies in the Mediterranean region and how each country deals with risks. Risk management is crucial in insurance companies because if risks are not mitigated, the company will suffer financial losses and poor performance within the company. With the introduction of the Solvency II Directive, consumer protection is improved by law at European Union. This paper shows the steps of risk management and comparison of these eight Mediterranean countries before the Solvency II directive and after it came into force. The eight Mediterranean countries are Spain, France, Greece, Cyprus, Italy, Slovenia, Malta and Croatia and the economy of each country and the economy of insurance is presented. The aim of this study is to examine the different risk management practices adopted by insurance companies and how risk management affects the performance of insurance companies in these countries, as well as th...
School in 2008 and 2012, respectively. Her PhD thesis was about investment preferences of institu... more School in 2008 and 2012, respectively. Her PhD thesis was about investment preferences of institutional investors. Besides institutional investment, her research interests include corporate finance, corporate governance and financial econometrics. She has taught Corporate Finance, Accounting, Capital Markets and Financial Institutions courses. She has published articles in many international journals such as International Business Review and the Journal of international Money and Finance.
Journal of accounting, finance and auditing studies, Jun 21, 2024
This study critically evaluates Board Effectiveness (BE) within Maltese Public Sector Entities (M... more This study critically evaluates Board Effectiveness (BE) within Maltese Public Sector Entities (MPSEs), with a focus on five key aspects: board selection and appointment, board role, board composition, board remuneration, and board performance evaluation. Semi-structured interviews were conducted with twenty-two participants, including eighteen MPSE board members (BMs), a representative from the Malta Institute of Directors, two corporate lawyers, and one corporate advisor. The findings indicate significant deficiencies in BE, particularly due to a lack of transparency in the selection and appointment process. This process is often influenced by political loyalties, which exclude new talent and discourage competent individuals. The identification of BMs as Politically Exposed Persons (PEPs) further restricts the inclusion of diverse talent, particularly among entrepreneurs. Additionally, insufficient training for BMs and persistent political pressures have been found to hinder the fulfilment of fiduciary duties. Female representation on MPSE boards is notably low, and foreign appointments are rare, thereby weakening the overall board composition. Moreover, the remuneration for MPSE BMs is significantly lower than that in the private sector, adversely impacting the quality of BMs. Resistance to implementing performance evaluations, which could potentially reduce political protection, has also been observed to impede BE. This study underscores the necessity of strengthening corporate governance (CG) practices to enhance BE in MPSEs, which is crucial for fostering a thriving economy and creating a positive legacy for future generations.
Journal of corporate governance, insurance and risk management, Mar 31, 2024
This investigation addresses the issuance of preference shares by companies listed on the Malta S... more This investigation addresses the issuance of preference shares by companies listed on the Malta Stock Exchange (MSE), identifying key determinants and obstacles associated with these initiatives. Semi-structured interviews were conducted with 27 stakeholders, including representatives from 23 MSE-listed companies (MLCs), one MSE official, two stockbrokers, and an advisor from a leading global accounting firm. An evaluation of the financial distress faced by issuers prior to the issuance of preference shares was also undertaken. Despite the establishment of the MSE in 1992, preference shares have been issued by only two listed companies, indicating their minimal utilization as financial instruments within the Maltese market. The findings reveal that preference shares are primarily issued to meet financing needs, support corporate expansion, prevent control dilution, capitalize on favorable market conditions, maintain balanced capital structures, and enhance debt capacity. However, several barriers hinder the issuance of preference shares, including limitations inherent to the Maltese capital market, low investor interest, perceived complexity, and a general lack of understanding regarding this hybrid financial instrument. The study underscores the necessity for improved educational efforts concerning preference shares and elucidates the distinctive characteristics of the local market.
Purpose: This article lays out an analysis of the relationship between inflation and Maltese mont... more Purpose: This article lays out an analysis of the relationship between inflation and Maltese monthly stock returns, comprising of 139 observations. Design/Methodology/Approach: A series of statistical tests were used so that the final multivariate time series modela Vector Error Correction Model, was fitted to the data. The model results were corroborated to the findings from the qualitative data and previous empirical evidence. Findings: Findings indicate that stock returns are positively influenced by the previous month's returns and negatively influenced by inflation, where the latter factor takes 3 to 4 months to impact stock returns. Additionally, short-term interest rates and money supply seem to contribute indirectly to the negative inflation-stock returns relationship since both variables are statistically significant in explaining inflation. Long-term interest rates and industrial production variables are statistically insignificant in explaining both inflation and stock returns. Findings show that Maltese investors' focus is on high dividend pay-out and capital preservation.
Purpose: In this study, we examined the incidence and predictors of Reduced Audit Quality Practic... more Purpose: In this study, we examined the incidence and predictors of Reduced Audit Quality Practices (RAQP) as well as the consequences of burnout on job satisfaction, turnover intentions, and the work environment in Maltese Big Four audit firms. Methodology: A two-phase sequential mixed-methods approach was employed to achieve the objectives of the study. In the first phase of data collection, questionnaires were distributed to auditors in the Big Four firms in Malta and concurrent semi-structured interviews were conducted with thirteen audit staff members. After this data was analysed, the results were discussed with four audit partners from these Big Four firms, as part of the second phase of data collection. Findings: We found that role stressors lead to increased burnout levels, while resilience mitigates burnout. Consequently, burnout leads to lower job satisfaction, higher turnover intentions, higher RAQP, and strained relationships with colleagues. Moreover, this study found that less experienced auditors commit RAQP more often, although mostly in low-risk areas and when facing time pressure. Originality/Value: This study contributes to the understanding of factors influencing the incidence of RAQP, and the antecedents and consequences of burnout amongst Maltese auditors.
Purpose: The objectives of this study are twofold.: (i) to establish the extent of Board diversit... more Purpose: The objectives of this study are twofold.: (i) to establish the extent of Board diversity in both its major surface-level (i.e. age, gender, nationality and tenure diversity) and deep-level aspects (i.e. industry-specific, financial, legal and IT expertise) in selected Maltese Large Family Businesses (LFBs), and to establish whether any inherent characteristics of such entities are perceived as influencing the extent of such diversity and (ii) to assess the influences of such diversity aspects on the major Corporate Governance (CG) factors. This also involves ascertaining the extent to which such influences, if existent, are perceived as advantageous or disadvantageous. Design/Methodology/Approach: Semi-structured interviews were carried out with twenty-six interviewees, consisting of eleven directors, three company secretaries, a CEO, four CFOs, an Institute of Directors representative, four advisory partners, an audit manager and an audit director. Findings: LFB Boards are mostly composed of family members, mostly long-tenured and having a lack of diversity of expertise. Moreover, LFB inherent characteristics, particularly strong emotional ties, may reduce the likelihood of a LFB Board being diverse. Furthermore, tenure and age diversity are the diversity aspects most influential on CG, particularly on attaining effective succession planning. In addition, although the eight major diversity aspects do not influence the CG factors pari passu, they generally influence various CG factors advantageously. Practical Implications: LFBs should consider Board participation rather than Board membership for most family members in order to allow enough space for the involvement of
Purpose: The objectives of this study were (i) to ascertain the Board mix of selected Maltese Lis... more Purpose: The objectives of this study were (i) to ascertain the Board mix of selected Maltese Listed Entities (MLEs) and how this has changed, if in any way, in the years 2018-2022, (ii) to extract the impact of the main factors affecting the Board mix, and (iii) to assess the extent to which the Board mix is perceived as contributing to good Corporate Governance (CG). Methodology: A mixed methodology was adopted. Thirty-one semi-structured interviews were conducted with eleven directors, nine company secretaries, four CFOs and two CEOs of MLEs, together with three corporate advisors, one corporate lawyer and one MLE expert. Findings: Independent Non-executive Directors (INEDs) are appreciated in the Boards of MLE, but the Board mix varies significantly among MLEs. The main factors affecting the Board mix of MLEs are the scope and complexity of the entity's operations, CEO entrenchment, the directors' knowledge on the entity's key functions and the directors' nationality. NEDs (Non-executive Directors) and INEDs contribute towards strategy formulation, the prevention and detection of corporate irregularities, and enhanced transparency in financial reporting. Meanwhile, EDs (Executive Directors) contribute towards strategy execution and may even aid in preventing and detecting corporate irregularities. Originality/Value: Although much ink has been spilled on Board of Director issues, too few studies have as yet delved into the different types of directors. This paper sheds light on the
Journal of accounting, finance and auditing studies, Feb 4, 2024
The exploration of stakeholder perceptions concerning the elements and values underpinning the co... more The exploration of stakeholder perceptions concerning the elements and values underpinning the cooperative concept in Malta forms the core objective of this investigation. Employing semi-structured interviews, primary data was gathered from a diverse group of participants, including thirteen representatives from cooperatives, four from cooperative institutional bodies, and five experts within the cooperative field. The analysis reveals a notable deficiency among Maltese cooperative stakeholders in comprehending the foundational elements and values of the cooperative model. This lack of understanding is attributed to ongoing challenges such as persistent misconceptions regarding the adaptability of cooperatives to social objectives, gaps in pertinent education and training, and inadequate promotion of the cooperative paradigm. The findings suggest a critical need for stakeholders to accord greater priority to the socially relevant components of cooperatives-those designed to be integral to the concept-beyond the mere generation of annual financial surpluses. Such a shift in focus is posited as essential for fostering a deeper appreciation and application of cooperative values, benefiting not only individual entities but the broader cooperative movement. Moreover, the insights gleaned from the Maltese context offer valuable lessons for cooperative movements in other small European states, highlighting the universal applicability and potential of cooperative principles for economic development and social cohesion. This study contributes to the dialogue on cooperative development by elucidating the gaps in understanding and application of cooperative values among stakeholders, thereby offering a foundation for targeted educational and promotional strategies to enhance the cooperative model's implementation and perception.
Journal of corporate governance, insurance and risk management, Dec 31, 2023
Through a mixed-methods research approach, this study investigates the factors influencing the et... more Through a mixed-methods research approach, this study investigates the factors influencing the ethical conduct of Internal Auditors (IAors) in Malta, assesses their awareness of ethical dilemmas and threats alongside their obligations under the Institute of Internal Auditors' Code of Ethics (the Code), and evaluates how frequently and under what circumstances IAors refer to the Code. Interviews were conducted with twenty-two participants, including nine internal auditors from Maltese listed organizations (MLEreps), five from government entities (Govtreps), and eight outsourced auditors (Outreps). The analysis reveals that IAors' commitment to ethical principles is primarily driven by personal integrity rather than mere obligation to the Code, with personality and character standing out as the foremost predictors of ethical behavior. Nonetheless, the significance of a wellarticulated Code of Ethics, organizational culture, the efficacy of the audit committee, and auditors' experience in shaping ethical conduct was also noted. It was found that internal auditors, especially those within government organizations, are more frequently confronted with ethical dilemmas than their external counterparts due to the nature of their work involving scrutiny of colleagues' actions. Outsourced auditors (Outreps) face distinct challenges in maintaining confidentiality. Across all groups, the threat of over-familiarity was identified as a substantial risk to ethical integrity, with government auditors (Govtreps) additionally perceiving intimidation as a significant concern. Despite these challenges, the Code was viewed by many, particularly MLEreps, as insufficient in addressing the ethical issues and risks encountered. Although a majority of IAors exhibit a willingness to comply with the Code, only a small fraction actively consults and reference it in their reports. This has led to calls among Maltese IAors for an enhanced Code and clearer guidelines, highlighting a reliance on the Code of Ethics for Warrant Holders for further direction due to the lack of practical examples in the current framework.
International journal of Economics and Business Administration, Nov 30, 2023
Purpose: There is consensus in the accountancy profession that graduates of accounting programmes... more Purpose: There is consensus in the accountancy profession that graduates of accounting programmes must possess a broad skill set that goes beyond technical skills. Inherent in nontechnical skills, there is the recognition of emotional intelligence (EI) skills, which are deemed to be crucial for the success of the accounting profession. In light of this, the study (i) examines the gap or otherwise between graduates' and employers' perceptions of the value placed on EI and non-EI skills for a career in accounting with the Big-four or mid-tier accounting firms; (ii) examines the extent of development of such skills during the accounting programme at the University of Malta; and (iii) examines the extent to which graduates' perceptions converge with those of the employers in relation to the specific EI and non-EI skills that should be developed during the university's accounting programme. Design/MethodologyApproach: A mainly quantitative approach was adopted, where online questionnaires were distributed to big-four and mid-tier accounting firm warrant holders (WH) (n=222), together with recent University of Malta accountancy graduates (n=96), to gain insight into their perceptions on EI and graduates' skills. Findings: The findings show that both WH and graduates agree that a broad skill set, encompassing both EI and non-EI skills, is important for a career in accounting with accounting firms. Written and oral communication skills, integrative thinking skills and analytical skills are the most valued non-EI skills. It is also revealed that WH and graduates share similar views on which skills are relatively well developed in university. These include the non-EI skills of financial accounting, audit and assurance and the EI skills of teamwork and collaboration. WH and graduates also agree on which skills require further development at university, these being analytical skills, integrative thinking skills, oral communication and the EI skill of self-confidence.
Journal of corporate governance insurance and risk management, Nov 27, 2023
This investigation explores the transformative effect of the COVID-19 pandemic on the risk assess... more This investigation explores the transformative effect of the COVID-19 pandemic on the risk assessment processes employed by auditors. The primary focus is on how the pandemic has reshaped the identification and evaluation of risks, necessitating alterations in the timing, nature, and extent of risk assessment procedures (RAPs) in the audit risk assessment context. This study, through semi-structured interviews with audit partners and senior managers from Big Four and mid-tier firms in Malta, comprising a total of 15 interviews, delves into the evolving landscape of risk assessment. It has been observed that the pandemic demanded increased vigilance and effort from auditors in understanding clients' businesses and their operational environments. This heightened attention was crucial to identify emerging risks aptly. A shift in the RAPs was discerned, favoring inquiries and analytical procedures (APs) over traditional methods like observation and inspection. The incorporation of Information Technology (IT) tools has markedly transformed the approach to gathering sufficient and appropriate audit evidence, particularly in verifying inventories and property, plant, and equipment (PPE), along with third-party confirmations. Furthermore, the study identifies material risks such as going concern (GC), asset impairment (including plant, equipment, inventory, and receivables), and the impact of external events on companies. An important outcome of this shift is the increased reliance on Artificial Intelligence (AI) and blockchain-based applications, heralding a more efficient and effective risk assessment process. This evolution not only enhances audit quality but also serves the public interest more robustly. The findings imply a long-term impact on audit risk assessment, projecting a continued evolution in the post-COVID era. These insights contribute significantly to the discourse on audit practices in times of crisis, underscoring the need for adaptive methodologies and the integration of advanced technologies in audit procedures.
Purpose: This study aims to determine which barriers significantly hinder communication between t... more Purpose: This study aims to determine which barriers significantly hinder communication between the external auditor and management of Maltese equity listed entities, both from the auditors' and management's perspectives. It also explores what both parties believe could be carried out to eliminate or mitigate these barriers, and it compares and contrasts the perceptions of both parties in relation to the communication barriers and mitigation techniques. Design/Methodology/Approach: To attain these objectives, a qualitative research design was adopted. A total of twenty-three semi-structured interviews were carried out. The respondents consisted of eleven auditors and twelve finance representatives of Maltese equity listed entities. Findings: This research concluded that in Malta, the most frequent communication barriers encountered in the auditor-management relationship are the lack of understanding of accounting/auditing terminology, differences in perceptions, the failure to adhere to deadlines/timelines and language barriers. Consequently, to eliminate/reduce these barriers, the most effective mitigation techniques in the Maltese scenario were found to be the preliminary auditor-client meeting and the possession of an enhanced level of listening and communication skills. Originality/Value: This study raises awareness regarding the communication barriers between external auditors and management in the Maltese scenario and how these barriers can be mitigated. It therefore bridges a small state research gap about the communication
The aim with this paper is to show the differences in the performance of eight insurance companie... more The aim with this paper is to show the differences in the performance of eight insurance companies in the Mediterranean region and how each country deals with risks. Risk management is crucial in insurance companies because if risks are not mitigated, the company will suffer financial losses and poor performance within the company. With the introduction of the Solvency II Directive, consumer protection is improved by law at European Union. This paper shows the steps of risk management and comparison of these eight Mediterranean countries before the Solvency II directive and after it came into force. The eight Mediterranean countries are Spain, France, Greece, Cyprus, Italy, Slovenia, Malta and Croatia and the economy of each country and the economy of insurance is presented. The aim of this study is to examine the different risk management practices adopted by insurance companies and how risk management affects the performance of insurance companies in these countries, as well as th...
School in 2008 and 2012, respectively. Her PhD thesis was about investment preferences of institu... more School in 2008 and 2012, respectively. Her PhD thesis was about investment preferences of institutional investors. Besides institutional investment, her research interests include corporate finance, corporate governance and financial econometrics. She has taught Corporate Finance, Accounting, Capital Markets and Financial Institutions courses. She has published articles in many international journals such as International Business Review and the Journal of international Money and Finance.
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Papers by Simon Grima