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Impact of internal audit function (IAF) on financial reporting quality (FRQ): evidence from Saudi Arabia


Citation

Al-Shetwi, Mohammed and Ramadilli Mohd, Shamsher Mohamad and Chowdury, Taufiq Hassan Shah and Muhamad Sori, Zulkarnain (2011) Impact of internal audit function (IAF) on financial reporting quality (FRQ): evidence from Saudi Arabia. African Journal of Business Management, 5 (27). art. no. 282D10817825. pp. 11189-11198. ISSN 1993-8233

Abstract

This study examined the impact of the quality of the internal audit function (IAF), an integral part of corporate governance structure, on the financial reporting quality (FRQ) of all Saudi companies listed in the Saudi stock exchange (TADAWL) in 2009, excluding banks. Both secondary and primary information was collected through a matched survey and interview of internal and external auditors. The findings show weak association between IAF quality and FRQ. The findings imply that the listed firms merely use IAF to provide a symbolic conformity to capital market authority (CMA) regulations. For better internal control and global recognition, CMA needs to put in place more initiatives to increase the role of IAF on firms in Saudi Arabia. Considering the environmental factors of emerging institutions, this study added different insights on the issue of IAF and its role in FRQ in the oil-based economy of Saudi Arabia.


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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
DOI Number: https://doi.org/10.5897/AJBM11.1805
Publisher: Academic Journals
Keywords: Internal audit; Financial reporting quality; Corporate governance; Capital market authority; Audit committee; The board of directors; Saudi Arabia
Depositing User: Nabilah Mustapa
Date Deposited: 31 Jul 2015 12:19
Last Modified: 16 Nov 2017 02:27
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.5897/AJBM11.1805
URI: http://psasir.upm.edu.my/id/eprint/22848
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