Internal audit function is a global governance pursuit: What could be done in emerging markets?

Abstract

This paper investigates the internal and the external auditors’ perceptions of how compliance with the Institute of Internal Auditors (IIA) International Standards for the Professional Practices of Internal Auditing (Standards) enhances the implementation of internal audit function (IAF) as a corporate governance mechanism in the listed companies in an emerging economy. Based on the Common Body of Knowledge (CBOK) database questionnaires were sent to internal auditors (IAs) and external auditors (EAs) of listed firms, and interviews were made with individuals involved in the IAF. The results reveal that IAF in an emerging economy faces difficulties related to objectivity, qualifications, and the roles of the internal audit staff reducing its role in corporate governance (CG). Significant positive correlations between compliance with Attribute Standards of independence, objectivity, proficiency, and free of interference and performance standards enhanced the organizational status of the internal audit. But there is a weak correlation between audit documentation and the organizational status of the internal audit. Quality assurance and improvement program, ongoing monitoring, and self-assessment by other personnel inside the organization having enough knowledge of the internal audit practices are needed for IAF to fulfill its CG responsibilities. This study is considered among the first that surveyed the status of the use of the professional IIA Standards in the listed firms in one of the emerging economies characterized by having good corporate governance practices from the perspectives of both IAs and EAs of the same companies under study.

Effects of organizational climate, role clarity, turnover intention, and workplace burnout on audit quality and performance

“…However, local small auditing firms have low levels of organizational independence, limited financial resources and management support and unqualified audit staff. They are still focused on traditional financial audit and internal controls compliance and has not yet moved toward the value-added and risk-based audit (Hegazy and Farghaly, 2022). Thus, external audit practices may vary significantly among Egyptian auditing firms.…”