Internal Auditing Practices And Performance Of Internal Audit Department
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Date
2003
Authors
HJ. FADZIL, FAUDZIAH HANIM
Journal Title
Journal ISSN
Volume Title
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Abstract
The performance of an internal audit department must function in a manner that is in
accordance with applicable professional standards such as Standards for the Professional
Practice of Internal Auditing (SPPIA, 2000) and the quality of the internal control
systems. Given the current business scenario, this study looks at the internal auditing
practices and performance of internal audit departments. Using data from 250 auditing
practitioners in KLSE-listed companies, this study suggests that independence, scope of
audit work, audit reporting, audit programs, management of internal audit department,
performance of audit work, audit reviews, objectivity and professional proficiency are
important internal auditing practices from the perception of internal auditors. This study
also suggests that risk assessment, control activities, control environment, information
and communication and monitoring are important quality of internal control system from
the perception of audit committee. This study also examines the influence of internal
auditing practices on the quality of internal control system. Management of internal audit
department, professional proficiency, objectivity and audit review significantly influence
the monitoring of the quality of the internal control system. Scope of work and
performance of audit work significantly influences the information and communication
of the quality of the internal control system while performance of audit work,
professional proficiency and objectivity significantly influence the control environment
of the quality of the internal control systems. The study also shows that the management
of internal audit department, performance of audit work, audit program and audit
reporting significantly influences the risk assessment of the quality of the internal control
system. On the other hand, performance of audit work and audit reporting significantly
influences the control activities of the quality of the internal control system. Information
and communication and risk assessment of the quality of the internal control systems do
significantly influence the performance of the internal audit department. This study
further shows that scope of audit work, professional proficiency, independence and audit
reporting of the internal aUditing practices significantly influence the performance of the
internal audit department. Finally, the study shows that risk assessment of the quality of
the internal control system partially mediates the audit reporting of the internal auditing
practices and the performance of the internal au jit department.
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Keywords
Internal Auditing Practices And Performance , Of Internal Audit Department