Audit committee characteristics and internal audit budget: Malaysian evidence

An audit committee is viewed as an essential self-regulatory internal governance instrument that is expected to provide an overseeing role over the entire process of financial reporting. An internal audit is also one of the corporate governance cornerstone that is essential for the effective monitor...

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Main Author:	Almagdoub, Almahdi Ali Mohamed Saleh
Format:	Thesis
Language:	eng eng
Published:	2016
Subjects:	HF5667 Professional Ethics Auditors.
Online Access:	https://etd.uum.edu.my/6274/1/s816235_01.pdf https://etd.uum.edu.my/6274/2/s816235_02.pdf
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id	my-uum-etd.6274
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Al-dhamari, Redhwan Ahamed Ali
topic	HF5667 Professional Ethics Auditors.
spellingShingle	HF5667 Professional Ethics Auditors. Almagdoub, Almahdi Ali Mohamed Saleh Audit committee characteristics and internal audit budget: Malaysian evidence
description	An audit committee is viewed as an essential self-regulatory internal governance instrument that is expected to provide an overseeing role over the entire process of financial reporting. An internal audit is also one of the corporate governance cornerstone that is essential for the effective monitoring of the operating performance of internal control. To ensure its effectiveness, the audit committee monitors the resources available to the internal audit, and internal control functions should be directly reported to the audit committee. This study is set out to explore the effect of audit committee characteristics (i.e independence, expertise, meeting and tenure) on internal audit budget in Malaysia, where governance mechanisms are suboptimal. The study also opens the door to an unanswered question, that is, whether an audit committee index is related to internal audit budget. Data of 96 companies listed on Bursa Malaysia for a three-year period, 2012-2014, was utilized to achieve this end. The regression result shows that there is audit committee meeting and index are significantly and positively associated with internal audit budget. They also indicate that audit committee tenure has a significant and negative impact on internal audit budget. The theoretical, practical, academic and regulatory implications of these findings were discussed in details. On one extreme, the findings of the study supports the recent policy initiatives in relation to audit committee and internal audit. On the other extreme, the result serves as a wake-up call to policy makers in requiring more committed, competent and skilled members on the audit committee.
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Almagdoub, Almahdi Ali Mohamed Saleh
author_facet	Almagdoub, Almahdi Ali Mohamed Saleh
author_sort	Almagdoub, Almahdi Ali Mohamed Saleh
title	Audit committee characteristics and internal audit budget: Malaysian evidence
title_short	Audit committee characteristics and internal audit budget: Malaysian evidence
title_full	Audit committee characteristics and internal audit budget: Malaysian evidence
title_fullStr	Audit committee characteristics and internal audit budget: Malaysian evidence
title_full_unstemmed	Audit committee characteristics and internal audit budget: Malaysian evidence
title_sort	audit committee characteristics and internal audit budget: malaysian evidence
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2016
url	https://etd.uum.edu.my/6274/1/s816235_01.pdf https://etd.uum.edu.my/6274/2/s816235_02.pdf
_version_	1747828049341054976
spelling	my-uum-etd.62742021-04-05T01:54:45Z Audit committee characteristics and internal audit budget: Malaysian evidence 2016 Almagdoub, Almahdi Ali Mohamed Saleh Al-dhamari, Redhwan Ahamed Ali Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HF5667 Professional Ethics. Auditors. An audit committee is viewed as an essential self-regulatory internal governance instrument that is expected to provide an overseeing role over the entire process of financial reporting. An internal audit is also one of the corporate governance cornerstone that is essential for the effective monitoring of the operating performance of internal control. To ensure its effectiveness, the audit committee monitors the resources available to the internal audit, and internal control functions should be directly reported to the audit committee. This study is set out to explore the effect of audit committee characteristics (i.e independence, expertise, meeting and tenure) on internal audit budget in Malaysia, where governance mechanisms are suboptimal. The study also opens the door to an unanswered question, that is, whether an audit committee index is related to internal audit budget. Data of 96 companies listed on Bursa Malaysia for a three-year period, 2012-2014, was utilized to achieve this end. The regression result shows that there is audit committee meeting and index are significantly and positively associated with internal audit budget. They also indicate that audit committee tenure has a significant and negative impact on internal audit budget. The theoretical, practical, academic and regulatory implications of these findings were discussed in details. On one extreme, the findings of the study supports the recent policy initiatives in relation to audit committee and internal audit. 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