دانلود رایگان مقاله انگلیسی عوامل مؤثر بر استفاده داوطلبانه از حسابرسی داخلی: شواهد از انگلستان - امرالد 2018

Abstract

Purpose – This study aims to identify the factors that lead non-financial companies listed in the UK to use an internal audit function (IAF) as a monitoring mechanism. Although the use of an IAF in the UK is voluntary, no prior research has examined the drivers for using one. Design/methodology/approach – Financial and non-financial data were collected from the annual reports of 332 UK non-financial companies listed on the London Stock Exchange (LSE) Main Market. Univariate tests and multivariate logistic regression tests were used to test the research hypotheses. A theoretical framework based on both agency theory and transaction cost economics (TCE) theory was used to explain the economic factors affecting the use of an IAF. Findings – The study provides evidence that firm size, level of internal risks, agency problem between owners and managers and existence of an effective audit committee are associated with the existence of an IAF. Thus, the need to have strong internal control and risk management systems and to reduce both internal and external agency costs drives companies to have an IAF. These results suggest the importance of IAF as an internal corporate governance tool and the effectiveness of UK governance regulations in monitoring the effectiveness of internal control systems. Practical implications – Given the importance of the IAF’s corporate governance role, the study provides some policy implications. Regulators should pay more attention to the issue of maintaining an IAF, especially by large companies, the relationship between the IAF and other governance parties, especially the audit committee, and the disclosure of more relevant information about the IAF’s characteristics and practices. Originality/value – This is the first study to examine the factors affecting the existence of the IAF within the UK’s distinctive regulatory approach of “comply or disclose reasons”. Furthermore, it provides a theoretical framework that explains how both the agency theory and TCE theory can interpret the adoption of internal audit.

8. Discussion and conclusion

This study provides strong evidence that a firm’s characteristics, namely, size, level of internal risks, agency problem between owners and managers and existence of an effective audit committee, are associated with the existence of an IAF in the UK companies listed on the LSE Main Market. It found a strong positive and significant association between firm size and the existence of an IAF. Large companies are more likely to demand monitoring to compensate for the loss of direct control and for the information asymmetry problem between the owners/board and the executive managers.

The study also found a positive and significant association between the existence of an IAF and all the proxies related to the level of internal risks (RECINV, OCF and RISKC). Companies with higher levels of internal risks are more likely to have material misstatements in their financial reports and are therefore more likely to use an IAF to insure that internal controls are in place to monitor financial and non-financial risks. In addition, the significant association between the existence of a risk management committee and the existence of an IAF may provide evidence that the need to have a strong risk management system is one of the key factors that lead companies to have an IAF, endorsing the importance of the IAF’s role in monitoring and improving the systems of internal control and risk management.