IDEAS home Printed from https://ideas.repec.org/a/gam/jijfss/v11y2023i4p129-d1273049.html
   My bibliography  Save this article

Evaluation of Factors Contributing to the Effectiveness of Internal Audit Quality in Pakistani Commercial Banks

Author

Listed:
  • Madiha Afzal

    (School of Accounting, Shanxi University of Finance and Economics, Taiyuan 030006, China)

Abstract

The Pakistani banking sectors facing numerous challenges because of poor internal audit quality. Internal audit quality has long been a source of contention. The current study examines the factors that affect internal audit quality in Pakistani commercial banks. Internal audit quality evaluated through potential factors such as competence, objectivity, performance, board audit committee support, and independence. Along with these factors, a questionnaire designed to determine the nature of the problems confronting Pakistani commercial banks. 102 questionnaires disseminated among the chief internal auditor, chief financial officer, board audit committee, and managers of 26 listed commercial banks. The impact of the factors on internal audit quality investigated using a binary logit regression model and multiple correspondence analyses. Findings show that performance, competence, and objectivity factors are statistically positively significant that influenced internal audit quality to improve it. This research helps improve the internal audit quality in Pakistani commercial banks.

Suggested Citation

  • Madiha Afzal, 2023. "Evaluation of Factors Contributing to the Effectiveness of Internal Audit Quality in Pakistani Commercial Banks," IJFS, MDPI, vol. 11(4), pages 1-15, November.
    • Handle: RePEc:gam:jijfss:v:11:y:2023:i:4:p:129-:d:1273049
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7072/11/4/129/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7072/11/4/129/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thu Trang Ta & Thanh Nga Doan, 2022. "Factors Affecting Internal Audit Effectiveness: Empirical Evidence from Vietnam," IJFS, MDPI, vol. 10(2), pages 1-14, May.
    2. Nora Muñoz-Izquierdo & María-del-Mar Camacho-Miñano & María-Jesús Segovia-Vargas & David Pascual-Ezama, 2019. "Is the External Audit Report Useful for Bankruptcy Prediction? Evidence Using Artificial Intelligence," IJFS, MDPI, vol. 7(2), pages 1-23, April.
    3. Nguyen, Quang Khai, 2022. "Audit committee structure, institutional quality, and bank stability: evidence from ASEAN countries," Finance Research Letters, Elsevier, vol. 46(PA).
    4. Ayman Abdelrahim & Husam-Aldin N. Al-Malkawi, 2022. "The Influential Factors of Internal Audit Effectiveness: A Conceptual Model," IJFS, MDPI, vol. 10(3), pages 1-23, August.
    5. Yusun Jung & Moon-Kyung Cho, 2022. "Impacts of reporting lines and joint reviews on internal audit effectiveness," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 37(4), pages 486-518, March.
    6. Marius Gros & Sebastian Koch & Christoph Wallek, 2017. "Internal audit function quality and financial reporting: results of a survey on German listed companies," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 21(2), pages 291-329, June.
    7. Alzeban, Abdulaziz & Gwilliam, David, 2014. "Factors affecting the internal audit effectiveness: A survey of the Saudi public sector," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 23(2), pages 74-86.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thu Trang Ta & Thanh Nga Doan, 2022. "Factors Affecting Internal Audit Effectiveness: Empirical Evidence from Vietnam," IJFS, MDPI, vol. 10(2), pages 1-14, May.
    2. Cláudia Silveira Thys Mutti & Clea Beatriz Macagnan, 2022. "Management legitimacy of public universities supported by the quality of their internal audits," SN Business & Economics, Springer, vol. 2(8), pages 1-20, August.
    3. Steven Grima & Peter J. Baldacchino & Simon Grima & Murat Kizilkaya & Norbert Tabone & Lauren Ellul, 2023. "Designing a Characteristics Effectiveness Model for Internal Audit," JRFM, MDPI, vol. 16(2), pages 1-44, January.
    4. Popoola, Oluwatoyin Muse Johnson & Ahmad, Ayoib B Che & Kehinde, Oyewumi Hassan, 2016. "Determinants of Internal Audit Task Performance in Nigerian Tertiary Institutions: A Conceptual Approach," MPRA Paper 75944, University Library of Munich, Germany.
    5. Amad Rashid & Basariah Salim & Halimah Nasibah Ahmad, 2021. "Internal Audit Effectiveness and Audit Committee Characteristics:Empirical Evidence from Pakistan," iRASD Journal of Management, International Research Alliance for Sustainable Development (iRASD), vol. 3(1), pages 1-13, june.
    6. Nurunnabi, Mohammad & Donker, Han & Jermakowicz, Eva K., 2022. "The impact of mandatory adoption of IFRS in Saudi Arabia," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 49(C).
    7. Basu Garg, 2021. "Brand awareness and preferences of rural youth for FMCG: An empirical study of district Bilaspur in Himachal Pradesh," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 12(2), pages 14-22, May.
    8. Victoria STANCIU, 2018. "Public internal audit – the awareness and necessity assumption. An investigation of the Romanian reality," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 16(152), pages 544-544.
    9. Prem Lal Joshi, 2021. "Which factors affect the internal audit effectiveness in India?," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 12(2), pages 01-13, May.
    10. Sutana Narkchai & Faudziah Hanim Binti Fadzil, 2017. "The Communication Skill on the Performance of Internal Auditors in Thailand Public Limited Company," International Review of Management and Marketing, Econjournals, vol. 7(4), pages 1-5.
    11. Cai, Lingnan, 2023. "Equity incentive, political connection and bank loan in private enterprises," Finance Research Letters, Elsevier, vol. 56(C).
    12. Happyson Bimha & Patronella Bimha & Sibusiso Makhanya, 2021. "Risk assessment of coronavirus disease lockdown on psychosocial support delivery:Eswatini caregivers’ perspective," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 12(2), pages 38-52, May.
    13. Samuel Kwaku Agyei & Nathaniel Kwapong Obuobi & Mohammed Zangina Isshaq & Mac Junior Abeka & John Gartchie Gatsi & Ebenezer Boateng & Emmanuel Kwakye Amoah, 2022. "Country-Level corporate governance and Foreign Portfolio Investments in Sub-Saharan Africa: The moderating role of institutional quality," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2106636-210, December.
    14. Abdulwahab Mujalli, 2024. "Factors Affecting the Implementation of Risk-Based Internal Auditing," JRFM, MDPI, vol. 17(5), pages 1-20, May.
    15. Nurunnabi, Mohammad, 2018. "Perceived costs and benefits of IFRS adoption in Saudi Arabia: An exploratory study," Research in Accounting Regulation, Elsevier, vol. 30(2), pages 166-175.
    16. Alzeban, Abdulaziz & Sawan, Nedal, 2015. "The impact of audit committee characteristics on the implementation of internal audit recommendations," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 24(C), pages 61-71.
    17. Tribhuwan Kumar Bhatt & Naveed Ahmed & Muhammad Babar Iqbal & Mehfooz Ullah, 2023. "Examining the Determinants of Credit Risk Management and Their Relationship with the Performance of Commercial Banks in Nepal," JRFM, MDPI, vol. 16(4), pages 1-23, April.
    18. Djebali Nesrine, 2023. "Does governance matter for bank stability? “MENA region case”," Journal of Asset Management, Palgrave Macmillan, vol. 24(4), pages 312-328, July.
    19. Simon Grima & Murat Kizilkaya & Kiran Sood & Mehmet ErdemDelice, 2021. "The Perceived Effectiveness of Blockchain for Digital Operational Risk Resilience in the European Union Insurance Market Sector," JRFM, MDPI, vol. 14(8), pages 1-15, August.
    20. Gianni Onesti & Riccardo Palumbo, 2023. "Tone at the Top for Sustainable Corporate Governance to Prevent Fraud," Sustainability, MDPI, vol. 15(3), pages 1-16, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijfss:v:11:y:2023:i:4:p:129-:d:1273049. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.