Internal Auditors Assessment of Their Contribution to Financial Statement Audits: The Relation With Audit Committee and Internal Audit Function Characteristics

18 Pages Posted: 28 Aug 2006

See all articles by Mazlina Mat Zain

Mazlina Mat Zain

Multimedia University (MMU) - Faculty of Management

Nava Subramaniam

Griffith University - School of Accounting and Finance - Gold Coast Campus

Jenny Stewart

Griffith University - Griffith Business School

Abstract

This paper examines the relation between audit committee characteristics, internal audit function characteristics and internal auditors' assessment of their contribution to financial statement audits. Using survey data from chief internal auditors of 76 Malaysian publicly-listed firms, we provide evidence of a positive relationship between internal auditors' assessment of their contribution to financial statement audits and three audit committee characteristics: the proportion of independent audit committee members, their knowledge and experience of accounting and auditing, and the extent of audit committee review of internal audit programmes, budget and coordination proposals. Further, a positive relationship is found between internal auditors' evaluation of their contribution to the financial statement audit and internal audit function characteristics including size, prior experience of staff in auditing, time availability and the closeness of the function's relationship with the external auditor. The results indicate that more effective audit committees and well-resourced internal audit units tend to be positively associated with the internal auditors' assessment of their contribution to the external audit.

JEL Classification: G34, M49, M47

Suggested Citation

Zain, Mazlina Mat and Subramaniam, Nava and Stewart, Jenny, Internal Auditors Assessment of Their Contribution to Financial Statement Audits: The Relation With Audit Committee and Internal Audit Function Characteristics. International Journal of Auditing, Vol. 10, No. 1, pp. 1-18, March 2006, Available at SSRN: https://ssrn.com/abstract=926764 or http://dx.doi.org/10.1111/j.1099-1123.2006.00306.x

Mazlina Mat Zain

Multimedia University (MMU) - Faculty of Management ( email )

Persiaran Multimedia
Cyberjaya, Selangor Darul Ehsan
Malaysia
+603 8312 5664 (Phone)
+603 8312 5590 (Fax)

Nava Subramaniam (Contact Author)

Griffith University - School of Accounting and Finance - Gold Coast Campus ( email )

PMB 50 Gold Coast Mail Centre
9726 Queensland
Australia
+61 7 5552 8769 (Phone)
+61 7 5552 8068 (Fax)

Jenny Stewart

Griffith University - Griffith Business School ( email )

Brisbane, Queensland 4111
Australia

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