Special Issue “Audit and Financial Control Tools Aimed at Ensuring the Sustainable Performance of Organizations”

1. Introduction

Through this editorial, the author aims to present the main landmarks related to the scientific contributions that can be found in the special issue dedicated to the topic “Audit and Financial Control Tools Aimed at Ensuring the Sustainable Performance of Organizations”. By going through our editorial, the reader will have the opportunity to understand the role and importance of audits and financial control in the context of the general desideratum to reach the parameters of a sustainable economy and maximum performance. Obviously, the same desideratum is valid in the case of public finances/budgets with the audit/financial control systems being over-regulated and mandatory.

But here is how this project started and evolved. For about a year and a half, in the midst of the COVID-19 pandemic, we launched a call to the academic world for researchers to contribute scientific papers to the Special Issue “Audit and Financial Control Tools Aimed at Ensuring the Sustainable Performance of Organizations” (Sustainability Journal). I considered it welcome to send original contributions to this publication, which focuses on topics considered to be of special interest to a large number of readers, especially since the approaches must take into account the major constraint that is the obligation to respect a strict/severe normative framework.

They showed interest in publishing a significant number of authors, but after the editorial process of analysis and in-depth verification by reviewers, contributions were accepted from 41 researchers working in different universities located in 7 countries.

I had in mind from the beginning that the managers of organizations of different sizes and with different activity objects obtain important advice after carrying out audits or financial control actions. Obviously, as has been demonstrated over time, once the measures required are implemented, they are usually followed by a significant increase in the organization’s performance regardless of whether it is a company (private or belonging to a state authority) or a public institution. In this context, we consider, in particular, economic performance, which is quantifiable.

2. The Contribution of This Special Issue

The articles included in this Special Issue (SI) focus on the role and importance of audit/financial control in the context of the general desideratum to reach the parameters of sustainable economy and maximum performance. Adequately, the approaches also targeted the case of public finances/budgets with the audit/financial control systems being over-regulated and mandatory here.

The reader of this volume will be able to see that all of the works took into account the general topics announced in advance: (i) investigating the issues related to the implementation of managerial control at the level of organizations; (ii) performing internal audits; (iii) exerting external audits and putting into practice the measures proposed by them; (iv) practical problems related to the application of specific procedures/standards/norms; (v) the study of the availability of managers/workers to comply with economic–financial legislation; and (vi) researching problems deriving from the control of various public bodies, explaining the possible consequences (https://www.mdpi.com/journal/sustainability/special_issues/AFCTAESPO) (accessed on 9 September 2021).

We have not been very restrictive in setting themes by the authors, especially since current audit/control issues can be approached from a multitude of angles [1,2,3,4,5,6,7,8,9] due to the manifestation of transformations and trends at the international level, especially after the global crisis that erupted in 2008 which has currently been exacerbated during the COVID-19 pandemic crisis [10].

That is why works have been included that treat as closely as possible the correlation between the activity supreme audit institutions (SAI) and sustainability of public finance [11] or comparing internal audit with internal control in the marketing environment [12]. The results of analyses (regarding the activity of the SAI) for the sub-periods show that these institutions played a more important role in reducing government deficit during crisis and post-crisis periods. In the case of the study, “Conceptual Comparison of Internal audit and Internal Control in the marketing environment,” the conclusions show a strong correlation of the theoretical perception of the terms of internal audit and internal control. At the same time, they show a weak correlation with the audit and control tools used in practice. They also define an audit as planned independent assurance (soft consultation) and control as an operational managerial assurance (hard comparison). This defines and clarifies scientific theories for managerial practice, thus enhancing and increasing the efficiency of internal audits and internal control in the business environment [12].

In the context of the analysis of the role power CEO and ownership concentration in the relationship between audit committee and firm performance (processing data and information from the environment of Pakistani companies), the authors demonstrate that “Audit Committee and firm performance have a positive association with each other. Moreover, the findings revealed that CEO power positively influenced firm performance. Furthermore, lower ownership concentration is a valuable approach to maximize a firm’s performance” [13]. Other researchers, seeking to answer the question “Does mandatory audit partner rotation influence auditor selection strategies?” (Listed companies in Taiwan), manage to prove that: “For the audit partner rotations (…), compared to voluntarily rotated companies, a higher percentage of companies choose industry specialist auditors to be their successor audit partners under mandatory rotation” [14]. Romanian researchers who have studied the problem also obtain interesting results rethinking the role of M and As (mergers and acquisitions) in promoting sustainable development. Given the environmental issues, a sample of 1491 target companies listed on the Bucharest Stock Exchange was analyzed, clustered into three categories: polluters, medium polluters, and low polluters. The conclusion “reveals that the investors’ decision to purchase a certain amount of stake in target companies is influenced by the audit opinion and the sector in which they operate, depending on their pollution status” [15].

On the other hand, the work “An Informal Ethics Auditing in Authorized Valuation for Business Sustainability in Romania” brings us some findings (well-founded) which have a negative connotation: “… that authorized valuers in Romania suffer from external pressures, which may affect the compliance with the ethical standards”, and “… that certain practices—such as, for example—the pressure from the clients’ side, negatively influence the compliance with the ethical principles and norms in valuation activity in Romania” [16]. Then, relatively worrying situation, it is also shown that “this practice is present as a general ethical challenge in the activity of professionals in the field, regardless of the geographical area in which they carry out their profession” [16].

The study “The Link between Board Structure, Audit, and Performance for Corporate Sustainability” fully justifies that effective governance leads to increased performance, which is necessary for sustainable development [17]. The authors point out that “The empirical findings revealed that CEO duality, the number of non-executive directors and women on board, audit committee, and audit opinion influenced performance measured by the return on assets (ROA) and return on equity (ROE) indicators” [17].

In the case of the paper “Econometric Model for Readjusting Significance Threshold Levels through Quick Audit Tests Used on Sustainable Companies”, the reader will notice that “it is demonstrated the need to re-evaluate the significance of accounting information both from the point of view of the desynchronization of the global economy during a crisis period and from the point of view of experiencing viable, sustainable growth in the long run. The suggested QATRMT model based on correlated economic indicators (…), brings a new perspective on the audit opinion in its relationship with the macro- and microeconomic disruptive factors that indicate the sustainability level both for a particular industry and for the company itself” [18]. It is noteworthy that the authors based their conclusion based on the entire sample of companies listed on the Bucharest Stock Exchange (BVB) and Bucharest Trading Plus (BET Plus) category, estimating a number of financial indicators between 2009 and 2018, in order to determine the importance of identified accounting errors by auditors to express an opinion on the reliability and accuracy of financial reporting.

Finally, we will find in this volume the approach of the audit in a very important context for any member country of the European Union - that of the need to absorb as much as possible of the funds distributed by the European Commission. That work (Attracting European Funds in the Romanian Economy and Leverage Points for Securing their Sustainable Management: A Critical Auditing Analysis) “develop a new audit performance analysis model (NOP), described as a dynamic and flexible model, based on reducing the fraud and error risk in the structural fund management of European-funded projects” [19].

After testing and statistical validation of the hypotheses (together with the respective model), by consolidating a database covering 12 years and over 1000 projects funded by the European Union (for the benefit of Romania), one basic idea is revealed: “… the critical necessity of integrity improvement in the context of managing the non-reimbursable funds through audit activities based on ISA805, the international standard on auditing European-funded projects” [19].

3. Conclusions

In our opinion, we state that the purpose of this approach has been well achieved. It is especially remarkable that I scored quality, not quantity.

The reader will be able to convince himself of these by going through the nine papers grouped in the Special Issue “Audit and Financial Control Tools Aimed at Ensuring the Sustainable Performance of Organizations”. I appreciate that in future developments, researchers on topics related to the topic of this volume will be able to have a significant basis for bibliographic documentation, the authors of these works making increased efforts to achieve them at a high academic level.

As a future goal, we intend to initiate a similar approach, focusing more on how to form, allocate and use financial resources to best meet social needs. But we estimate that the start of such a project will take place after the end of the current economic crisis due to pandemics.