Deciding factors in cooperation and trust between internal and external auditors in organizations: An exploratory analysis

Morais, Georgina; Franco, Mário

doi:10.1111/ijau.12160

Cited by 8 publications

(13 citation statements)

References 40 publications

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“…On the other hand, some studies provide evidence that supports the positive association between IAF competence and firm operational efficiency (Chen et al , 2020), internal control quality (Oussii and Boulila Taktak, 2018) and financial reporting quality in financial institutions (Kaawaase et al , 2021), whilst they found no evidence that supports such association with IAF independence. In addition, Morais and Franco (2019) surveyed external auditors in Portugal and found that competence is most important for external auditors to trust and cooperate with internal auditors.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Internal audit quality and earnings management: evidence from the UK

Ismael

Kamel

2021

MAJ

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Purpose This study aims to examine the association between internal audit quality and the involvement of UK companies in earnings management practices. Design/methodology/approach To measure the internal audit quality, this study uses 115 responses for a postal questionnaire that was addressed to the heads of internal audit departments in a sample of non-financial listed companies in the UK context. The other financial and governance data for the respondent companies were collected from the Datastream and the companies’ annual reports. The present study uses the signed abnormal accruals as a proxy for earnings management and uses both logistic and ordinary least squares regression models to test the research hypothesis. Findings This study finds a negative relationship between the internal audit quality and the abnormal accruals, implying the prominent role of internal audit in reducing the upwards earnings management. The study also finds a significant impact of the internal audit competence on reducing the engagement of UK companies in income-increasing earnings management compared to the internal audit independence. This remarkable result suggests the companies need to focus more on enhancing the internal audit competence to reduce the opportunistic management’s behaviour. Practical implications This study has important implications for the internal audit’s practice, regulation and research. Originality/value This is the first study that investigates the relationship between internal audit quality and earnings management in the UK context. Furthermore, it uses a comprehensive measure for the internal audit function (IAF) quality covering different aspects of IAF quality based on the global Institute of Internal Auditor standards and prior internal audit literature.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Internal audit quality and earnings management: evidence from the UK

Ismael

Kamel

2021

MAJ

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“…Amplamente, a função da auditoria transmite aos seus profissionais dilemas contundentes para a execução das atividades (Morais & Franco, 2019). Por um lado, os auditores visam realizar seu trabalho com a maior cobertura possível, a fim de transmitir confiança.…”

Section: Introductionunclassified

“…Por um lado, os auditores visam realizar seu trabalho com a maior cobertura possível, a fim de transmitir confiança. Mas, por outro, desejam reduzir custos, serem mais eficientes e evitar ou reduzir excessos que geram insatisfação nas organizações, limitações à eficiência, além de buscar minimizar o risco de seu trabalho (Morais & Franco, 2019). Resoluções para tais impasses têm sido investigadas pela literatura a partir de fatores de confiança e de cooperação no relacionamento entre auditores internos e externos.…”

Section: Introductionunclassified

“…Estudos investigaram fatores isolados como influenciadores da decisão de confiar na auditoria interna a partir do ponto de vista dos auditores externos: critérios para avaliar o trabalho dos auditores internos (Haron et al, 2004), importância de fatores influenciadores da dependência do auditor externo na auditoria interna (Suwaidan & Qasim, 2010), confiança na auditoria interna (Mihret & Admassu, 2011), como a dependência dos auditores externos sobre o trabalho dos auditores internos (Brody, 2012;Paino et al, 2015). Por outro lado, estudos verificaram percepções dos auditores internos quanto à confiança no processo de auditoria externa (Endaya, 2014;Saidin, 2014;Morais & Franco, 2019).…”

Section: Introductionunclassified

“…A auditoria interna de qualidade, no que tange à competência, à objetividade e ao desempenho da equipe no trabalho, contribui para a eficácia da auditoria externa (Al-Twaijry et al, 2004). Neste sentido, a cooperação e a confiança entre estes profissionais, conjuntamente com uma boa comunicação e criação de redes, podem contribuir para um melhor compartilhamento de conhecimentos, ferramentas e metodologias que ajudem de modo apropriado, rápido e transparente a tomada de decisão oportuna no contexto dos trabalhos (Morais & Franco, 2019).…”

Section: Introductionunclassified

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Influência do comportamento dos auditores em conflitos organizacionais na confiança e na cooperação entre auditores internos e externos

Ferrari¹,

Cunha²,

Petri³

2022

REPeC

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Objetivo: Analisar a influência do comportamento dos auditores em situações de conflitos organizacionais na confiança e na cooperação entre auditores internos e externos.Método: pesquisa descritiva, survey e quantitativa, desenvolvida com uma amostra de 226 auditores internos e 267 auditores externos atuantes em empresas brasileiras. Com base nos fatores gerados pela análise fatorial dos elementos de confiança e de cooperação, operacionalizou-se regressões lineares múltiplas considerando como dimensões para a postura diante de conflitos organizacionais a não confrontação, orientação para solução e o controle. Resultados: suportam que os fatores que orientam a decisão de confiar e cooperar podem ser interpretados de modo distinto entre auditores internos e externos, além de serem influenciados por características como idade, sexo e cargo do auditor. No que tange ao comportamento diante de conflitos organizacionais, tanto auditores internos como externos apresentam, em sua maioria, atitudes direcionadas para a solução dos conflitos. Esse perfil dos auditores influencia positivamente a confiança e a cooperação entre a auditoria interna e externa. Contribuições: sinaliza-se a importância de identificar o perfil dos auditores e seu impacto no processo da auditoria, além de contribuir no processo de tomada de decisão da área de governança visando à otimização dos recursos investidos no processo de auditoria.

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Auditors’ Trust in Audit Committees and Audit Quality

Adelopo,

Cheung,

Zaman

2024

J Corp Accounting Finance

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In light of global advancements in corporate governance, it is imperative for external auditors and audit committees to engage in communication and interactions to ensure that external audits are conducted to a high standard and quality. While many studies report that audit committee expertise, diligence, and independence are associated with monitoring, often they do not provide explanation of the mechanisms through which these happen. There is limited research on how external auditors’ trust in audit committees affects their interactions and therefore audit quality. This paper examines external auditors’ trust and their interactions with audit committees. We find that external auditors’ perceptions of audit committee members’ competence, goodwill, and integrity shape their trust in audit committees. Overall, our findings suggest that auditors’ trust in audit committees enhances their perception of the quality of their interactions, affects information sharing and the conduct of the audit, and thus helps to improve the quality of auditing.

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Deciding factors in cooperation and trust between internal and external auditors in organizations: An exploratory analysis

Cited by 8 publications

References 40 publications

Internal audit quality and earnings management: evidence from the UK

Internal audit quality and earnings management: evidence from the UK

Influência do comportamento dos auditores em conflitos organizacionais na confiança e na cooperação entre auditores internos e externos

Auditors’ Trust in Audit Committees and Audit Quality

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