Reliance of external auditors on internal audit work : a corporate governance perspective


Autoria(s): Mihret, Dessalegn Getie; Admassu, Mengistu Amare
Data(s)

01/01/2011

Resumo

The literature suggests an increasing need for interactions among board of directors, management, internal audit and external audit as the four components of corporate governance and presents internal audit as a resource for the other components. External auditing standards that originated in the Western world, which are also being applied in developing countries, recommend external auditor’s reliance on internal audit to achieve audit efficiency. Nevertheless, whether this efficiency motive explains such reliance in corporate governance settings that differ from the West has not been sufficiently explored as yet. This study examines external auditor reliance on internal audit work using questionnaire survey of 119 external auditors in Ethiopia. Mann-Whitney U test results suggest that external auditors’ reliance on internal audit work is not significantly associated with the competitiveness of external audit sub-markets in Ethiopia. Results of multiple discriminant analysis indicate internal audit work performance is the most important factor that determines the extent of external auditors’ reliance on internal audit work. Overall, findings suggest that organizations can enhance corporate governance effectiveness by strengthening internal audit and fostering internal-external auditor coordination.

Identificador

http://hdl.handle.net/10536/DRO/DU:30065225

Idioma(s)

eng

Publicador

Canadian Center of Science and Education

Relação

http://dro.deakin.edu.au/eserv/DU:30065225/mihret-reliance-2011.pdf

http://dro.deakin.edu.au/eserv/DU:30065225/mihret-reliance-proforma-2011.pdf

http://doi.org/10.5539/ibr.v4n2p67

Direitos

2011, Canadian Center of Science and Education

Palavras-Chave #external audit #internal audit #corporate governance #external audit market #Ethiopia
Tipo

Journal Article