دانلود رایگان مقاله انگلیسی رابطه میان محتویات افشاگری های حسابرسی داخلی و اجرت های حسابرسی خارجی - وایلی 2018

The aim of this study is to explore the content of internal audit (IA) disclosures in annual reports and explain the relationship between IA disclosures and external audit fees. A content analysis of the IA disclosures made it possible to generate inductive categories that were used as a basis for statistical analysis. The findings show a large variation in disclosure practices, and only a small portion of all disclosures contain firm‐specific information related to IA. Evidence is provided that the use of an IA function (IAF) is associated with higher external audit fees. However, companies that disclose firm‐specific information related to IA pay lower audit fees than those not providing this disclosure. Overall, the results of this study indicate that firm‐specific IA disclosures most likely represent actual investments in IA and can be used as a proxy for IAF quality.

DISCUSSION AND CONCLUSIONS

The aim of this study has been to explore the content of IA disclosures in annual reports, and to explain the relationship between IA disclosures and external audit fees. Content analysis enabled categorization of the IA disclosures and formed the basis for statistical analysis. Identified IA disclosures are either of a more substantial nature, containing firm‐specific and generic information connected to the IAF, or of a nonsubstantial nature, focusing on the task of the audit committee and governance structures. Only a small portion of all IA disclosures are verifiable and contain firm‐specific information relevant to shareholders and potential investors. In more detail, firm‐specific disclosures focus on actual investments in IA, either by including quantifiable information or by highlighting specific target areas and processes. It is possible that this small number of firm‐specific disclosures can be explained by the fact that verifiable and quantitative disclosures require a genuine commitment to IA and will be costly to achieve (Toms, 2002). The findings supporting H1 are consistent with those of previous studies (Anderson & Zéghal, 1994; Goodwin‐Stewart & Kent, 2006; Hay et al., 2008; Singh & Newby, 2010) and contribute additional evidence for a positive relationship between the use of an IAF and external audit fees. However, further analysis of the IA disclosures, H2, shows that companies which disclose firm‐specific information related to IA pay significantly lower audit fees than other companies in the sample. Given previous findings that more informative disclosures signal actual investments in disclosed activities (Toms, 2002) and increased governance quality (Beekes & Brown, 2006), it can be argued that more informative IA disclosures signal higher IAF quality. By improving risk‐management and control processes, higher IAF quality can reduce the time and effort of external auditors, and hence result in lower audit fees (Prawitt et al., 2011). The contradictory results in the different models may be explained by the fact that companies that use an IAF are heterogeneous and differ with regard to actual investments in IA. This study adds new evidence from a different context (Nordic corporate governance context) and time period (2013) compared with previous studies from common law countries (Anderson & Zéghal, 1994; Goodwin‐Stewart & Kent, 2006; Hay et al., 2008; Singh & Newby, 2010; Zain et al., 2015). The characteristics of Nordic corporate governance include concentrated ownership with controlling shareholders, high transparency towards shareholders, and annual general meetings with extensive governing power (Gabrielsson, 2012; Lekvall, 2014).