ISSUE
14 Apr 2022
Impactful Research Insights for Business
Research INSIGHT
Internal audit : from ticking boxes to driving managerial excellence
HKBU School of Business x Meltwater
Why a Financial, Analytical Mindset Could Be Key to the World’s Economic Reboot
on social data and consumer needs, values and motivation
Read More at: partners.wsj.com/hkbu/economy-reboot/
The School of Business joined Meltwater, a global media monitoring and social listening
platform, on 27 April 2022 for a webinar titled "Using social data to understand the needs, values and motivation of your audience". Dr. Su Lei, Associate Professor of the Department of Marketing, presented insights from an academic perspective on consumer judgment and decision-making, examining how social or visual marketing factors influence product evaluations and purchase intentions, and providing practical managerial implications for practitioners. Mr. Melvin Chng, Area Director of Hong Kong at Meltwater, also shared how Social Media data teamed up with AI allows marketers to create a marketing strategy based on audience insights far beyond demographic and socioeconomic factors. The enthusiastic discussion attracted over 140 marketers to attend, followed by a keen Q&A session. Click on the video below to view a replay of the webinar.
04 Research INSIGHT
Internal audit: From ticking boxes to driving managerial excellence
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Research
EXCELLENCE
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Upcoming
EVENTS
Research Espresso / Apr 2022
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Research INSIGHT
Internal Audit:
From ticking boxes todriving driving mana to manag manag Chen, Y., Lin, B., Lu, L., & Zhou, G. (2020). Can Internal Audit Function Improve Firm Operational Efficiency? Evidence from China. Managerial Auditing Journal, 35(8), 1167-1188.
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agerial excellence agerial gerial gerialexcellence excellence
Research Insight
RESEARCH INSIGHT
Research Espresso / Apr 2022
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I
f not as glamorous as the police’s Internal Affairs division tasked with chasing dirty cops, the profile of internal auditors – the people hired to look into what’s happening in their own company before it’s too late – has been on the upswing. Fed by the greed exposed by accounting scandals like Enron and Parmalat and the malfeasance of the financial industry that triggered the 2008 financial crisis, internal audit has become a key corporate function.
Recognised for contributing to good corporate governance in western jurisdictions like the UK and the US, internal audit has been credited with everything from constraining earnings management to deterring management misconduct and reducing fraud. The situation is different in China. Developed in the 80s as a tool for supplementing state audit, the internal audit function in the PRC has evolved beyond promoting good corporate governance. Acting as corporate sleuths like their western counterparts, internal auditors in China were also initially perceived as governmentempowered management consultants. However, from 2000s onwards, the function has evolved into an important corporate governance mechanism for strengthening internal control and risk management in listed companies. In “Can internal audit functions improve firm operational efficiency? Evidence from China” , a team of researchers investigated whether internal auditors in China can actually help improve firms’ operational efficiency. It turns out they do.
Combining internal audit and financial data from a sample of Chinese listed firms over the 2011–2013 period, the research shows that a quality independent financial audit – defined using factors such as reporting lines as well as the educational background, compensation and professional certification of the audit team – was positively associated with firm’s operational efficiency as measured by a number of financial indicators. Moving away from merely verifying compliance with regulations, internal audit teams actually helped management deliver better results.
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Interestingly, findings show that if the competence of the internal audit staff appeared instrumental in improving firm’s operational efficiency, its independence seemed irrelevant. This makes sense since an internal audit team composed of qualified staff would be better able to identify important information and work with management to improve processes. Meanwhile, the independence of an audit team makes it more difficult to gain the confidence of managers, effectively precluding it to go beyond verifying compliance.
Perhaps less surprisingly, the positive impact of a quality internal audit on efficiency only shows up in firms that already have effective corporate governance to begin with, or in companies operating in Chinese provinces known for having high-level market-based institutions. Both these elements help entrench the credibility and authority of internal audit teams. Validated by the board and regulators, internal audit teams are thus accepted as partners by management instead of being viewed as troublemakers. Finally, the impact of the internal audit function is both direct and indirect, as its mere existence has ripple effects extending throughout the organisation.
Research Insight
In this respect, appointing internal auditors might be an cost-effective way to improve governance while sending a signal that things are set to change.
Dr. Gaoguang Zhou Associate Professor Department of Accountancy and Law
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Research Espresso / Apr 2022
Research EXCELLENCE
Prof. Xu Huang
Dr. Jays Kim
Dr. Sibo Liu
Chair Professor Department of Management
Assistant Professor Department of Management
Assistant Professor Department of Management
Comparisons draw us close: The influence of leader-member exchange dyadic comparison on coworker exchange
Unpacking the "O" in VRIO : The role of workflow interdependence in the loss and replacement of strategic human capital
Personnel Psychology
Strategic Management Journal
https://doi.org/10.1111/peps.12465
http://doi.org/10.1002/smj.3358
Minimum Wage and Corporate Investment: Evidence from Manufacturing Firms in China Journal of Financial and Quantitative Analysis
https://doi.org/10.1017/S0022109021000053
Research Excellence
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Dr. Wookje Sung
Dr. Chris (Xiaodong) Zhao
Assistant Professor Department of Management
Assistant Professor Department of Accountancy and Law
Turnover During a Corporate Merger: How Workplace Network Change Influences Staying
Do Managers Issue More Voluntary Disclosure When GAAP Limits Their Reporting Discretion in Financial Statements?
Journal of Applied Psychology
https://doi.org/10.1037/apl0000864
Journal of Accounting Research
https://doi.org/10.1111/1475-679X.12401
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Research Espresso / Apr 2022
Upcoming EVENTS Research Seminars Date
Speaker
Topic
Economics
1 June 2022 16:00-17:30
8 June 2022 9:00-10:30
10 June 2022
Prof. Tai-Wei HU University of Bristol
Prof. Øivind SCHØYEN
Stanford University and UiT The Arc�c University of Norway
A Theory of Moral Authority
Prof. Ma�eo CROSIGNANI
Exorbitant Privilege? Quan�ta�ve Easing and the Bond Market Subsidy of Prospec�ve Fallen Angels
9:00-10:30
Federal Reserve Bank of New York
29 June 2022
Prof. Cesar MARTINELLI
9:00-10:30
Voter Polariza�on and Extremism
George Mason University
Razor-Thin Elec�ons
Centre for Business Analytics and the Digital Economy
2 June 2022
Prof. Aleksander BERENTSEN
23 June 2022
Dr. Katrin ASSENMACHER
CBDC and Business Cycle Dynamics in a New Monetarist New Keynesian Mode
30 June 2022
Prof. Hans GERSBACH
Monetary Policy with a Central Bank Digital Currency: The Short and the Long Term
14 July 2022
Dr. Katrin ASSENMACHER
Monetary Policy and the Digital Euro
16:00-17:30 16:00-17:30
16:00-17:30
16:00-17:30
University of Basel
European Central Bank
ETH Zurich
European Central Bank
Decentralized Finance: The Future of Money and Finance
HKBU
Reward Management and Innovation Symposium
2022
2 June 2022
Zoom Webinar
Time
Session
Speaker
2:00 - 2:10 pm
Welcome and Opening
Prof. Snape – HKBU School of Business
2:10 - 2:50 pm
Keynote
Prof. Randy Chiu – HKBU School of Business
2:50 – 3:50 pm Research Insights
Discussant 3:50 - 4:00 pm
Dr. Man Nok Wong – Sun Yat-sen University Dr. Rongjun Yu – HKBU School of Business Prof. Huang Xu – HKBU School of Business Break
4:00 - 5:00 pm
Dialogue: Reinven�ng Reward Management in the New Normal
Mr. Gabriel Kung – Bow�e Mr. John Lee – Standard Chartered Bank Ms. Felicity Ting – China Interna�onal Capital Corpora�on (CICC) Ms. Sarah Cheuk – Fano Lab
5:00 - 5:20 pm
Centre for Human Resources Strategy and Development (CHRSD) showcase
Prof. Huang Xu – HKBU School of Business
5:20 - 5:30 pm
Closing
Dr. Song Chang – HKBU School of Business
Registration
bit.ly/3EW2OXV
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