The Effect of Continuous Auditing on the Relationship between Internal Audit Sourcing and the External Auditor's Reliance on the Internal Audit Function

2013 ◽  
Vol 27 (1) ◽  
pp. 41-59 ◽  
Author(s):  
Bruce I. Davidson ◽  
Naman K. Desai ◽  
Gregory J. Gerard
Keyword(s):  
Internal Audit ◽  
Continuous Auditing ◽  
Internal Audit Function ◽  
The Relationship

The Relationship Between CAE Leadership and the IAF’s Involvement in Corporate Governance

2019 ◽  
pp. 0148558X1986753
Author(s):  
Pierluigi Martino ◽  
Giuseppe D’Onza ◽  
Robert Melville
Keyword(s):  
South Africa ◽  
Corporate Governance ◽  
Quality Assurance ◽  
Leadership Training ◽  
Leadership Skills ◽  
Internal Audit ◽  
Activity Type ◽  
Improvement Program ◽  
Internal Audit Function ◽  
The Relationship

This article examines the importance of leadership in the context of the internal audit function (IAF). We investigate the influence of the Chief Audit Executive’s (CAE) leadership in enabling the IAF to become a strategic player in corporate governance (CG). Using the responses of 804 CAEs from the Anglosphere countries and South Africa, we find that strong CAE leadership skills and the existence of a leadership training program are significantly and positively associated with IAF involvement in CG processes. This provides support for the argument that CAEs with strong leadership skills help the IAF to move from a behind-the-scenes player to a key actor in the improvement of CG practices, increasing the IAF’s organizational relevance. We also find that the use of a risk-based audit plan, the existence of a quality assurance and improvement program (QAIP), activity type (consulting vs. assurance), and IAF size are also positively associated with IAF involvement in CG. These findings suggest that IAF activity characteristics also have significant implications for this function’s stronger involvement in the CG space.

scholarly journals The Effect of Audit Committee Characteristics on Audit Quality: The Moderating Role of Internal Audit Function

2020 ◽  
Vol 3 (2) ◽  
Author(s):  
Josephine Kuan Pei See ◽  
Anwar Allah Pitchay ◽  
Yuvaraj Ganesan ◽  
Hasnah Haron ◽  
Ratih Hendayani
Keyword(s):  
Structural Equation ◽  
Audit Committee ◽  
Audit Quality ◽  
Internal Audit ◽  
Secondary Data ◽  
Listed Companies ◽  
Internal Audit Function ◽  
The Relationship ◽  
Moderating Role

The purposes of study are to examine the effect of audit committee characteristics namely gender, frequency of meetings, independence member in audit committee and audit committee size on audit quality and the moderating role of internal audit function in the relationship between audit committee characteristics and audit quality. The objective is to contribute to the new evidence on the role of audit committee characteristics plays towards the audit quality with internal audit function as moderator. This research applied a quantitative approach and secondary data as the main source of information for analysis. Stratified random sampling techniques are being used in this study. Further, the structural equation modelling (SEM) approach via SmartPLS was utilized to achieve the research purpose by evaluating the data collected from 250 public listed companies in Malaysia. The results reveal that only three of the audit committee characteristics, namely presence of female members in the audit committee, frequency of meetings and independence of directors, are positively influencing the audit quality for listed companies in Malaysia. Surprisingly, this study also found that internal audit function did not play the moderating effect in the relationship between audit committee characteristics and audit quality. The findings will facilitate researchers and scholars to enhance the understanding of audit committee characteristics particularly the gender, frequency of AC meetings and independence members in the audit committee played in improving overall audit quality. The companies’ stakeholders like professional accountancy body and governments may use the outcomes from this research study to improve existing rules and government regulations and code of conducts of its members to improve the quality of their works. This study contributes to the relatively new discussion on the effect of audit committee characteristics on audit quality by adding internal audit function as a moderator in Malaysia. The outcome from this study may assist the companies’ stakeholders like professional accountancy body and governments in determining improved methods to enhance audit committee characteristics in improving audit quality.

Continuous Auditing and Risk-Based Audit Planning—An Empirical Analysis

2020 ◽  
Vol 17 (2) ◽  
pp. 141-155 ◽  
Author(s):  
Marc Eulerich ◽  
Christine Georgi ◽  
Alexander Schmidt
Keyword(s):  
Audit Committee ◽  
Research Question ◽  
Internal Audit ◽  
Positive Influence ◽  
Internal Auditing ◽  
Continuous Auditing ◽  
Audit Planning ◽  
Positive Effects ◽  
Internal Audit Function ◽  
External Auditor

ABSTRACT Due to rapidly changing risks in companies, a continuous alignment of internal audit activities with the relevant risks is required. Continuous auditing (CA) is one possible way to meet these requirements. Specifically, the internal audit function (IAF) could use CA as a methodology in order to add a continuous perspective to their risk assessment. This study examines factors associated with the use of CA information in the IAF's risk-based audit planning (RBAP). We use survey data from 264 chief audit executives to address our research question. We find several factors having a positive influence on the use of information from CA in RBAP. These factors include the importance of data analytics, the collaboration with the audit committee and external auditor, as well as the use of IAF's results for fraud prevention. Furthermore, our additional analysis presents various positive effects of CA on potential output measures of internal auditing. JEL Classifications: G30; G32; G34; M42.

scholarly journals Earnings quality and audit attributes in high concentrated ownership market

2016 ◽  
Vol 16 (2) ◽  
pp. 377-399 ◽  
Author(s):  
Ahmed Hussein Al-Rassas ◽  
Hasnah Kamardin
Keyword(s):  
Audit Quality ◽  
Earnings Quality ◽  
Internal Audit ◽  
Resource Dependence Theory ◽  
Ownership Concentration ◽  
Content Type ◽  
Internal Audit Function ◽  
Financial Expertise ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this study is to examine the effect of the audit committee (AC) independence, financial expertise, internal audit function, audit quality and ownership concentration on earnings quality (EQ) and, consequently, ascertain whether the AC’s independence and financial expertise has a moderating effect on the relationship between internal audit function and EQ. Design/methodology/approach The study sample is 508 firms listed on the Main Market of Bursa Malaysia (formerly known as Kuala Lumpur Stock Exchange) for the years 2009 to 2012. EQ was measured using two modified Jones models of discretionary accruals. Findings The findings reveal that the independence of AC and investment in internal audit function, as well as the Big4 audit firm, are related to greater EQ. Ownership concentration is found to be associated with lower EQ. The study provides evidence that AC’s independence moderates the relationship between internal audit function (investment in and sourcing arrangements of internal audit function) and EQ. It also shows that AC’s financial expertise moderates the relationship between sourcing arrangements of internal audit function and EQ. Practical implications This study extends the prior related literature by examining the AC’s independence and financial expertise as moderating variables on the relationship between internal audit function and EQ. Social implications Policymakers might use the findings regarding EQ in relation to governance practices, to recognize the important roles played by the AC’s independence and financial expertise on the effectiveness of internal audit function with EQ. Originality/value This study uses the agency theory and resource dependence theory to provide empirical evidence on the impact of internal audit function and AC on EQ in the ownership concentration environment.

scholarly journals Análisis de la Influencia de la Función de Auditoría Interna sobre las Cuotas de Auditoría

2019 ◽  
Vol 22 (1) ◽  
pp. 100-111 ◽  
Author(s):  
Laura Sierra García ◽  
Emiliano Ruiz Barbadillo ◽  
Manuel Orta Pérez
Keyword(s):  
Audit Committee ◽  
Internal Audit ◽  
Audit Fees ◽  
Regulatory Agencies ◽  
External Auditors ◽  
Empirical Results ◽  
Internal Audit Function ◽  
Auditor Fees ◽  
The Relationship ◽  
Practical Implications

The aim of this paper is to analyse the relationship between the internal audit function and auditor's fees using a sample of Spanish listed companies between 2003 and 2011. We use the audit fees model that was proposed by Simunic (1980). Our results indicate that fees are greater in those companies that have an internal audit function. In addition, if there are meetings between the audit committee and the internal audit function, this is statistically significant with audit fees. This paper contributes to literature in several ways. Firstly, there are no previous papers in Spain, unlike other contexts, on the relationship between internal audit and auditor fees. Secondly, the empirical results detected in previous studies are conflicting; therefore, there is a need to complement them. Finally, the findings have practical implications for companies, external auditors and regulatory agencies themselves. El objetivo de este trabajo es analizar la relación existente entre la función de auditoría interna y los honorarios del auditor sobre una muestra de empresas que cotizan en el mercado continuo español entre 2003 y 2011. Utilizando el modelo de honorarios de auditoría propuesto por Simunic (1980), los resultados indican que los honorarios de auditoría son mayores en aquellas compañías que cuentan con la existencia de un departamento de auditoría interna. Asimismo, la existencia de reuniones entre el comité de auditoría y la función de auditoría interna es estadísticamente significativa con los honorarios. Este estudio contribuye a la literatura de diversas formas. En primer lugar, no existen trabajos anteriores en España, a diferencia de otros contextos, sobre la relación entre auditoría interna y honorarios. En segundo lugar, los resultados empíricos detectados en estudios previos resultan contradictorios por lo tanto lleva a la necesidad de complementarlos. Finalmente, los resultados tiene implicaciones prácticas para la empresa, los auditores externos y los propios organismos reguladores.

scholarly journals The Effect of Audit Committee Characteristics on Audit Quality: The Moderating Role of Internal Audit Function

10.15282/5309 ◽  
2020 ◽  
Vol 3 (2) ◽  
Author(s):  
Josephine Kuan Pei See ◽  
Anwar Allah Pitchay ◽  
Yuvaraj Ganesan ◽  
Hasnah Haron ◽  
Ratih Hendayani
Keyword(s):  
Structural Equation ◽  
Audit Committee ◽  
Audit Quality ◽  
Internal Audit ◽  
Secondary Data ◽  
Listed Companies ◽  
Internal Audit Function ◽  
The Relationship ◽  
Moderating Role

The purposes of study are to examine the effect of audit committee characteristics namely gender, frequency of meetings, independence member in audit committee and audit committee size on audit quality and the moderating role of internal audit function in the relationship between audit committee characteristics and audit quality. The objective is to contribute to the new evidence on the role of audit committee characteristics plays towards the audit quality with internal audit function as moderator. This research applied a quantitative approach and secondary data as the main source of information for analysis. Stratified random sampling techniques are being used in this study. Further, the structural equation modelling (SEM) approach via SmartPLS was utilized to achieve the research purpose by evaluating the data collected from 250 public listed companies in Malaysia. The results reveal that only three of the audit committee characteristics, namely presence of female members in the audit committee, frequency of meetings and independence of directors, are positively influencing the audit quality for listed companies in Malaysia. Surprisingly, this study also found that internal audit function did not play the moderating effect in the relationship between audit committee characteristics and audit quality. The findings will facilitate researchers and scholars to enhance the understanding of audit committee characteristics particularly the gender, frequency of AC meetings and independence members in the audit committee played in improving overall audit quality. The companies’ stakeholders like professional accountancy body and governments may use the outcomes from this research study to improve existing rules and government regulations and code of conducts of its members to improve the quality of their works. This study contributes to the relatively new discussion on the effect of audit committee characteristics on audit quality by adding internal audit function as a moderator in Malaysia. The outcome from this study may assist the companies’ stakeholders like professional accountancy body and governments in determining improved methods to enhance audit committee characteristics in improving audit quality.

scholarly journals Internal Audit Function Quality and Audit Committees’ Practices: Survey Evidence from Jordan

2021 ◽  
Vol 11 (2) ◽  
pp. 20
Author(s):  
Fawzi Ata Al Sawalqa ◽  
Atala Qtish
Keyword(s):  
Corporate Governance ◽  
Significant Relationship ◽  
Audit Quality ◽  
Internal Audit ◽  
Audit Committees ◽  
Current Status ◽  
Internal Audit Function ◽  
Compliance Level ◽  
Significant Difference ◽  
The Relationship

The current study examines the extent to which audit committees comply with the requirements of corporate governance in Jordan and describes the current status of internal audit function. In addition, the study examines empirically the relationship between the internal audit quality and the compliance of audit committees with the governance requirements. The results from 49 respondents indicate that audit committees comply with the requirement of corporate governance and no significant difference is found in such compliance due to sector. In addition, the internal audit quality attributes are met among Jordanian companies to a considerable extent. Further, the independence and objectivity dimension of internal audit quality has a positive and significant relationship with the compliance of audit committees with governance requirements. Internal audit competence and due professional care have no significant relationship with audit committees compliance. One important implication of the current study is the development of a scale to measure the compliance level of audit committees with the governance requirements that can be used by both academics and decision-makers in firms.

scholarly journals Internal Audit Function and Audit Fees: Evidence from Nigeria

2021 ◽  
Vol 6 (1) ◽  
pp. 15
Author(s):  
Muqaddam Oyetunji Ali ◽  
Wan Amalina Wan Abdullah
Keyword(s):  
Significant Relationship ◽  
Random Effect ◽  
Internal Audit ◽  
Audit Fees ◽  
Listed Firms ◽  
External Auditors ◽  
Financial Firms ◽  
Internal Audit Function ◽  
Effect Regression ◽  
The Relationship

The purpose of this study is to analyse the relationship between audit fees and internal audit function in the Nigerian listed companies. This study observes 60 non-financial firms over four years (2012 to 2015) and uses random effect regression model to examine the hypothesis. The result of the study found internal audit to be significantly related with amount of audit fees paid by the listed firms. Specifically, this study found internal audit expertise and size of internal audit unit to have a positive and significant relationship with audit fees while no relationship was documented between internal audit certificate and the amount of audit fees. The study concludes that company with effective and adequate internal audit unit tend to pay higher audit fees to the external auditors.

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