Influence of Internal Audit On the Quality of Financial Statements

Abstract

The quality of financial reports is one of the critical aspects for capital owners in assessing the company's success in its business. Previous research has shown a positive relationship between internal audits and the presentation of quality financial statements. Based on the critical role of the presentation of financial statements, the researchers researched the influence of internal audits on the quality of financial statements. The researcher uses a quantitative approach in answering the problem formulation that set. The sample in this study were 59 employees of the audit department in two manufacturing companies in the city of Bandung. Data analysis used simple linear regression with the results showing a positive influence of internal audit on the quality of financial reports by 50.5%. In contrast, the rest was influenced by other factors not examined. The study results indicate that the better the internal audit is carried out, the better the quality of financial reports.

Influence of Internal Audit, Information & Communication, and Monitoring of Internal Control Performance

“…Research conducted by (Astuti, 2022) regarding The Influence of Internal Audit on The Quality of Financial Statements. The research method used is a quantitative approach with non-probability sampling technique.…”

“…Internal audit has been extensively researched by previous researchers including (Siregar et al, 2022), (Edriansah et al, 2022) , (Astuti, 2022), and (Oktora & Marlina, 2022).…”

Effect of Internal Audit of Cash Disbursements on Internal Control of Cash Disbursements

“…(Septiani et al, 2020;Yassin et al, 2021) Internal auditing of cash transactions, policy and procedure adherence, and detecting potential fraud or irregularities are all aspects of cash expenditures. (Yusup & Juhara, 2020) The function of internal audit is paramount in aiding management in carrying out organizational processes with efficacy and efficiency, thereby accomplishing pre-established goals. (Carcello et al, 2018;Erasmus & Coetzee, 2018) Furthermore, it serves as a regulatory mechanism that can oversee organizational functions tasked with appraising and analyzing all corporate undertakings, particularly cash outflows.…”

Internal Audit Effect on Inventory Control

“…(Yassin et al, 2021) Internal audit is an independent activity that provides assurance designed to provide added value and improve the company's operations. (Yusup & Juhara, 2020) Internal audit assists companies in their efforts to achieve their goals by providing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and regulatory processes in organizational management. (Feng et al, 2015) Internal audit must be able to become an independent party by carrying out the supervisory function of running the company and examining whether the company's operations are running well.…”