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The impact of assurance on compliance management systems on bank directors' decisions

Quick, Reiner ; Sayar, Sanjar (2024)
The impact of assurance on compliance management systems on bank directors' decisions.
In: International Journal of Auditing, 2021, 25 (1)
doi: 10.26083/tuprints-00017818
Article, Secondary publication, Publisher's Version

Copyright Information: CC BY 4.0 International - Creative Commons, Attribution.

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Item Type: Article
Type of entry: Secondary publication
Title: The impact of assurance on compliance management systems on bank directors' decisions
Language: English
Date: 5 January 2024
Place of Publication: Darmstadt
Year of primary publication: 2021
Place of primary publication: Oxford
Publisher: John Wiley & Sons
Journal or Publication Title: International Journal of Auditing
Volume of the journal: 25
Issue Number: 1
DOI: 10.26083/tuprints-00017818
Corresponding Links:
Origin: Secondary publication DeepGreen

Numerous corporate scandals, in conjunction with managerial misbehavior, demonstrate the need for compliance management systems (CMS) and the relevance of CMS assurance. This study investigates the impact of CMS assurance on German bank directors' perceptions and decisions, and analyzes whether the type of assurer and the level of provided assurance are relevant. For this purpose, we conducted an experiment with 105 bank directors and used ANOVA to analyze their reliance on the hypothetical company's CMS, and their decisions regarding credit granting, purchase, and recommendation of shares. We chose a 2 × 2 + 1 between‐subjects design, manipulating the assurance provider (audit firm vs. third party) and the level of assurance (limited vs. reasonable), and adding a control condition without any assurance. Our results suggest that assured CMS positively affect bank directors' perceptions and decisions, compared to CMS without assurance. Furthermore, we find that our perception measure and all three of our decision measures are strongly associated with the choice of assurance provider, but only two decision measures are associated with the assurance level. Bank directors prefer assurance provision by an audit firm, whereas the findings regarding the impact of the assurance level are inconclusive. The study's results, which confirm the decision‐usefulness of CMS assurance, are of interest for managers, in particular compliance officers, auditors, creditors, regulators, and academics.

Uncontrolled Keywords: Assurance level, assurance services, bank directors, Compliance Management System, compliance‐assurance
Status: Publisher's Version
URN: urn:nbn:de:tuda-tuprints-178188
Classification DDC: 300 Social sciences > 330 Economics
600 Technology, medicine, applied sciences > 650 Management
Divisions: 01 Department of Law and Economics > Betriebswirtschaftliche Fachgebiete > Fachgebiet Rechnungswesen, Controlling und Wirtschaftsprüfung
Date Deposited: 05 Jan 2024 13:41
Last Modified: 14 Mar 2024 09:05
SWORD Depositor: Deep Green
URI: https://tuprints.ulb.tu-darmstadt.de/id/eprint/17818
PPN: 516250809
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