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.

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.

scholarly journals CORPORATE GOVERNANCE AND BUSINESS PERFORMANCE: THE MODERATING ROLE OF EXTERNAL AUDIT QUALITY

2020 ◽  
Vol 2 (2) ◽  
pp. 34-44
Author(s):  
Foong Seng Wong ◽  
Yuvaraj Ganesan ◽  
Anwar Allah Pitchay ◽  
Hasnah Haron ◽  
Ratih Hendayani
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Business Performance ◽  
Audit Quality ◽  
Internal Audit ◽  
External Audit ◽  
Management Committee ◽  
Age Diversity ◽  
The Relationship ◽  
Risk Management Committee

The purpose of this study is to investigate the relationship of corporate governance attributes, i.e. board size, age diversity, risk management committee and internal audit function with the business performance of the organisation. In addition, this study also examines the role of external audit quality as a moderating effect in the relationship between corporate governance and business performance. The study adopted a quantitative approach and cross-sectional design where it used a sample of 120 listed companies in Malaysia for the year 2016. Data is collected based on secondary data which is annual report year 2016. The result shows board size and the existence of risk management committee are negatively significant related to business performance while the other variables such as age diversity and internal audit function do not have an impact on business performance. Unexpectedly, external audit quality does not play a moderating role in related corporate governance and business performance. The study contributes to the understanding of the relationship between corporate governance and business performance in the developing country. The paper also provides related insight for regulators, policymakers and investors of emerging markets such as Malaysia. The study is the pioneer to understand the relationship of the risk management committee to business performance and moderating effect of external audit quality.

Attributes of the internal audit function and effectiveness of internal audit services: evidence from local government authorities in Tanzania

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Athuman Kalokola Mahyoro ◽  
Pendo Shukrani Kasoga
Keyword(s):  
Local Government ◽  
Audit Quality ◽  
Internal Audit ◽  
Principal Component ◽  
Positive Influence ◽  
Audit Committees ◽  
Future Research ◽  
Content Type ◽  
Internal Auditors ◽  
Internal Audit Function

Purpose The purpose of this study is to examine how the level of attributes of the internal audit function relates to the effectiveness of internal audit services in local government authorities (LGAs) in Tanzania. Design/methodology/approach Data have been collected through a survey whereby 510 respondents from LGAs in Tanzania through their Heads of Internal Audit Functions, Internal Auditors and Chairpersons of Audit Committees respond to the questionnaire. The data were subjected to principal component analysis and exploratory factor analysis to reduce the set of items and to provide continuous scores for use in multiple regression analyses. Findings The findings reveal that audit quality; organization setting and auditee attributes have a significant positive influence on the effectiveness of internal audit services in LGAs in Tanzania. Research limitations/implications The study covered only LGAs in Tanzania. Future research in this field should address the gaps identified in the study. Practical implications This paper highlights areas that need management attention on the improvement of the effectiveness of internal audit units. Originality/value This paper contributes to the literature of both internal auditing and management studies by linking the level of attributes of internal audit function which are audit quality, organization setting, auditee attributes and effectiveness of internal audit services in Tanzania.

scholarly journals The association between corporate governance and corporate disclosure: A critical review

2013 ◽  
Vol 3 (3) ◽  
pp. 94 ◽  
Author(s):  
Mohamed Aboelhamd Omran ◽  
Marwa Abdelrazik
Keyword(s):  
Corporate Governance ◽  
Critical Review ◽  
Audit Quality ◽  
Internal Audit ◽  
Future Research ◽  
Corporate Disclosure ◽  
Earning Forecast ◽  
Internal Governance ◽  
Audit Firm ◽  
The Relationship

This study provides a critical review of different techniques used in recent accounting literature to investigate the association between corporate governance and corporate disclosure. Therefore, the main purpose of this study is to help future researchers to identify examples and to select suitable practices or to develop their own ones. It also provides contest of current issues related to the relationship between corporate disclosure and corporate governance and identifies gaps in the current literature that future research may aim to cover. The study examines 34 articles published during the 2007-2013 period. The review of these articles concludes that most of these published studies examined the association between corporate disclosure and one or more of board of directors, ownership construction and audit firm. The current study suggests that researchers can also examine the association between internal audit quality as an internal governance and corporate disclosure. The study reveals that researchers used a disclosure index and content analysis to measure corporate disclosure. However, other techniques can be applied as management earning forecast and the number of analysts.

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 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.

The impact of internal audit function characteristics on internal control quality

2018 ◽  
Vol 33 (5) ◽  
pp. 450-469 ◽  
Author(s):  
Ahmed Atef Oussii ◽  
Neila Boulila Taktak
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Audit Quality ◽  
Internal Audit ◽  
Audit Committees ◽  
Content Type ◽  
Internal Auditors ◽  
Control Quality ◽  
Internal Audit Function ◽  
The Impact

Purpose This paper aims to investigate the association between internal audit function (IAF) characteristics and internal control quality. Design/methodology/approach Using data gathered from 59 chief audit executives from Tunisian listed companies, this paper uses a regression model to examine research hypothesis related to the association between IAF characteristics and internal control quality. Findings The findings of the current study reveal that internal control quality is significantly and positively associated with IAF competence, internal audit quality control assurance level, follow-up process and audit committee’s involvement in reviewing the internal audit program and results. Practical implications The findings have significant implications for IAF wishing to enhance their effectiveness, by recognizing the impact of the IAF’s characteristics on internal control quality. The findings of this study also have significant implications for regulatory bodies who are concerned with the internal control quality, managers and audit committees who determine IAF investment, oversight IAF activities and assess internal auditors’ performance. Originality/value This study helps fill a gap in the extant literature where existing empirical evidence of how the IAF characteristics influences the quality of the financial reporting process in emerging markets is scant.

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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