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The Effect of Internal Audit Effectiveness, Auditor Responsibility and Training in Fraud Detection

Author

Listed:
  • George Drogalas

    (University of Macedonia, Greece)

  • Michail Pazarskis

    (T.E.I. of Central Macedonia, Greece)

  • Evgenia Anagnostopoulou

    (University of Macedonia, Greece)

  • Angeliki Papachristou

    (T.E.I. of Central Macedonia, Greece)

Abstract

The purpose of this study is to explore the relationship between internal audit effectiveness, internal auditor’s responsibility, training and fraud detection. During the last decade internal auditing has become an integral part of modern businesses since it is capable of detecting errors or offences which lead to fraud. In order to investigate the above relationship, we conducted a survey of companies listed in the Athens Stock Exchange. We used factor analysis to validate the survey instrument and to construct our variables measuring fraud detection, internal audit effectiveness, auditor responsibility and training. We used regression analysis to test for significance between the constructed variables. Our analysis shows that audit effectiveness, auditor responsibility and auditor training affect positively and significantly the detection of fraud. Our results highlight the importance of internal audit in detecting accounting fraud and the need of companies to invest on internal audit processes and training in order to achieve enhanced corporate performance. Finally, our research stresses the importance of internal audit and fraud detection for companies which operate in countries which are in a period of economic crisis.

Suggested Citation

  • George Drogalas & Michail Pazarskis & Evgenia Anagnostopoulou & Angeliki Papachristou, 2017. "The Effect of Internal Audit Effectiveness, Auditor Responsibility and Training in Fraud Detection," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 16(4), pages 434-454, December.
    • Handle: RePEc:ami:journl:v:16:y:2017:i:4:p:434-454
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    Citations

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    Cited by:

    1. Asaad Wahhab & Amna Ibrahim Obaid, 2023. "Adoption of the ISA 500 and its Impact on Audit Quality and Fraud Reduction: Evidence from Iraq," Technium Social Sciences Journal, Technium Science, vol. 45(1), pages 30-48, July.
    2. Anup Chowdhury & Nikhil Chandra Shil, 2019. "Influence of New Public Management Philosophy On Risk Management, Fraud and Corruption Control and Internal Audit: Evidence from an Australian Public Sector Organization," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 18(4), pages 486-508, December.
    3. Nabil Ahmed Mareai Senan, 2024. "The Moderating Role of Corporate Governance on the Associations of Internal Audit and Its Quality with the Financial Reporting Quality: The Case of Yemeni Banks," JRFM, MDPI, vol. 17(3), pages 1-16, March.
    4. Ari Fahimatussyam Putra Nusantara & Gugus Irianto & Yeney Widya Prihatiningtias, 2020. "Fraud prevention and detection practices in the perspective of Jember Regency internal auditor," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 9(4), pages 377-384, July.
    5. İsmail KABAN & Mustafa GÜL, 2019. "The Impact of Underground Economy on the Sustainability of Tax Policy in Turkey," Istanbul Business Research, Istanbul University Business School, vol. 48(1), pages 113-143, May.
    6. Mark E. Lokanan & Prerna Sharma, 2023. "Two Decades of Accounting Fraud Research: The Missing Meso-Level Analysis," SAGE Open, , vol. 13(3), pages 21582440231, September.

    More about this item

    Keywords

    Internal audit; auditor responsibility; auditor training; fraud detection; accounting fraud;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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