The association between internal governance mechanisms and internal audit function quality: evidence from Malaysia

The internal audit function (IAF) quality has been recognized as an importance corporate governance mechanisms in ensuring the credibility of financial reporting, preventing fraud, and accounting scandals. This study examines the relationship between internal corporate governance mechanisms; namely...

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Main Author:	Hadiati, Fitri
Format:	Thesis
Language:	eng eng eng eng
Published:	2020
Subjects:	HF5667 Professional Ethics Auditors.
Online Access:	https://etd.uum.edu.my/8377/1/Deposit%20Permission_s93213.pdf https://etd.uum.edu.my/8377/2/s93213_01.pdf https://etd.uum.edu.my/8377/3/s93213_02.pdf https://etd.uum.edu.my/8377/4/s93213%20references.docx
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id	my-uum-etd.8377
record_format	uketd_dc
spelling	my-uum-etd.83772021-06-23T00:50:25Z The association between internal governance mechanisms and internal audit function quality: evidence from Malaysia 2020 Hadiati, Fitri Wan Hussin, Wan Nordin Salim, Basariah Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HF5667 Professional Ethics. Auditors. The internal audit function (IAF) quality has been recognized as an importance corporate governance mechanisms in ensuring the credibility of financial reporting, preventing fraud, and accounting scandals. This study examines the relationship between internal corporate governance mechanisms; namely audit committee attributes, board attributes, and internal audit attributes; and lAF quality. Audit committee attributes are represented by audit committee chair financial expertise, audit committee chair overlap (workload in multiple committees), audit committee size and audit committee meetings frequency; board attributes are represented by board size and board independent while internal audit attributes are represented by internal audit sourcing arrangement and internal audit investment. Ordinary least squares and logistic regressions are used to test the relationship between the variables. This study employs Malaysian Top I 00 non-financial public listed companies, based on market capitalisation in 2014. This study uses three criteria such as compliance with internal audit standards, existence of internal audit charter and adoption of risk-based internal audit plan as proxies for IAF quality. The findings reveal that audit committee chair financial expertise, audit committee chair overlap and board size have a significant influence on the overall lAF quality. In addition, audit committee chair financial expertise has a significantly positive influence on the adoption of risk-based Internal Audit plan, whereas audit committee chair overlap has a significantly negative influence on the existence of internal audit charter and compliance with internal audit standards. This study contributes to a better understanding of internal audit practices by Malaysian listed companies. The results of the study suggest that companies should improve IAF quality through internal corporate mechanisms in safeguarding their companies. This study allows policymaker to re-evaluate and reconsider adopting the original recommendation proposed in Malaysian Code on Corporate Governance 2016 pertaining to audit committee chair financial expertise 2020 Thesis https://etd.uum.edu.my/8377/ https://etd.uum.edu.my/8377/1/Deposit%20Permission_s93213.pdf text eng staffonly https://etd.uum.edu.my/8377/2/s93213_01.pdf text eng 2023-12-31 staffonly https://etd.uum.edu.my/8377/3/s93213_02.pdf text eng public https://etd.uum.edu.my/8377/4/s93213%20references.docx text eng public other doctoral Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng eng eng
advisor	Wan Hussin, Wan Nordin Salim, Basariah
topic	HF5667 Professional Ethics Auditors.
spellingShingle	HF5667 Professional Ethics Auditors. Hadiati, Fitri The association between internal governance mechanisms and internal audit function quality: evidence from Malaysia
description	The internal audit function (IAF) quality has been recognized as an importance corporate governance mechanisms in ensuring the credibility of financial reporting, preventing fraud, and accounting scandals. This study examines the relationship between internal corporate governance mechanisms; namely audit committee attributes, board attributes, and internal audit attributes; and lAF quality. Audit committee attributes are represented by audit committee chair financial expertise, audit committee chair overlap (workload in multiple committees), audit committee size and audit committee meetings frequency; board attributes are represented by board size and board independent while internal audit attributes are represented by internal audit sourcing arrangement and internal audit investment. Ordinary least squares and logistic regressions are used to test the relationship between the variables. This study employs Malaysian Top I 00 non-financial public listed companies, based on market capitalisation in 2014. This study uses three criteria such as compliance with internal audit standards, existence of internal audit charter and adoption of risk-based internal audit plan as proxies for IAF quality. The findings reveal that audit committee chair financial expertise, audit committee chair overlap and board size have a significant influence on the overall lAF quality. In addition, audit committee chair financial expertise has a significantly positive influence on the adoption of risk-based Internal Audit plan, whereas audit committee chair overlap has a significantly negative influence on the existence of internal audit charter and compliance with internal audit standards. This study contributes to a better understanding of internal audit practices by Malaysian listed companies. The results of the study suggest that companies should improve IAF quality through internal corporate mechanisms in safeguarding their companies. This study allows policymaker to re-evaluate and reconsider adopting the original recommendation proposed in Malaysian Code on Corporate Governance 2016 pertaining to audit committee chair financial expertise
format	Thesis
qualification_name	other
qualification_level	Doctorate
author	Hadiati, Fitri
author_facet	Hadiati, Fitri
author_sort	Hadiati, Fitri
title	The association between internal governance mechanisms and internal audit function quality: evidence from Malaysia
title_short	The association between internal governance mechanisms and internal audit function quality: evidence from Malaysia
title_full	The association between internal governance mechanisms and internal audit function quality: evidence from Malaysia
title_fullStr	The association between internal governance mechanisms and internal audit function quality: evidence from Malaysia
title_full_unstemmed	The association between internal governance mechanisms and internal audit function quality: evidence from Malaysia
title_sort	association between internal governance mechanisms and internal audit function quality: evidence from malaysia
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2020
url	https://etd.uum.edu.my/8377/1/Deposit%20Permission_s93213.pdf https://etd.uum.edu.my/8377/2/s93213_01.pdf https://etd.uum.edu.my/8377/3/s93213_02.pdf https://etd.uum.edu.my/8377/4/s93213%20references.docx
_version_	1747828381433462784

The association between internal governance mechanisms and internal audit function quality: evidence from Malaysia

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