PlumX Metrics
SSRN
Embed PlumX Metrics

Internal Audit Quality and Financial Reporting Quality: The Joint Importance of Independence and Competence

Journal of Accounting Research, Vol. 54, No. 1, 2016
2016
  • 0
    Citations
  • 1,862
    Usage
  • 1
    Captures
  • 0
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Usage
    1,862
    • Abstract Views
      1,862
  • Captures
    1
    • Exports-Saves
      1
      • SSRN
        1

Paper Description

In light of the growing importance of internal audit functions (IAF) and the limited archival evidence on internal audit quality, we examine an interactive model of IAF quality (comprised of competence and independence) to better understand the determinants of IAF effectiveness as a financial reporting monitor. Our tests support the hypothesis that the joint presence of competence and independence is a necessary antecedent to effective IAF financial reporting monitoring. In sum, our results show that, the answer to “what is the effect of internal audit competence (independence) on financial reporting quality?” is “it depends on the independence (competence) of the internal auditor.” Our study extends the understanding of IAF quality determinants in the realm of financial reporting as it relates to ongoing discussions by researchers, standard setters, regulators, and practitioners.

Bibliographic Details

Lawrence Abbott; Brian Daugherty; Susan Parker; Gary F. Peters

internal audit; financial reporting quality; auditor independence; auditor competence

Provide Feedback

Have ideas for a new metric? Would you like to see something else here?Let us know