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Perceived Internal Audit Quality and External Auditors’ Attributes in Iranian and Iraqi Banks

Author

Listed:
  • Bita Mashayekhi

    (Department of Accounting and Auditing, Faculty of Accounting and Financial Sciences, College of Management, University of Tehran, Tehran 1411713114, Iran)

  • Yousif Mohammed

    (Department of Accounting and Auditing, Faculty of Accounting and Financial Sciences, College of Management, University of Tehran, Tehran 1411713114, Iran
    Department of Accounting, Faculty of Law, Political Science and Management, Soran University, Soran 44008, Iraq)

Abstract

The significance of internal auditing and its quality cannot be overstated, making it essential to investigate the factors influencing this quality. This study, employing a cross-sectional analysis, aims to assess how the characteristics of external auditors affect the perceived quality of internal audits in Iranian and Iraqi banks. In 2024, data regarding the attributes of external auditors and the perceived quality of internal audits were collected through a questionnaire distributed to external auditors from various banks in Iran and Iraq. The data analysis was conducted using Partial Least Squares Structural Equation Modeling (PLS-SEM). The study reveals a positive relationship between external auditors’ competence and independence and the perceived quality of internal audits, while it shows a negative impact of external audit methodologies on this perceived quality. These findings highlight the importance of external auditors’ independence as a key determinant of perceived internal audit quality.

Suggested Citation

  • Bita Mashayekhi & Yousif Mohammed, 2024. "Perceived Internal Audit Quality and External Auditors’ Attributes in Iranian and Iraqi Banks," JRFM, MDPI, vol. 18(1), pages 1-17, December.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2024:i:1:p:3-:d:1552903
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    References listed on IDEAS

    as
    1. Deniz A. Appelbaum & Alex Kogan & Miklos A. Vasarhelyi, 2018. "Analytical procedures in external auditing: A comprehensive literature survey and framework for external audit analytics," Journal of Accounting Literature, Emerald Group Publishing Limited, vol. 40(1), pages 83-101, January.
    2. António Samagaio & Teresa Felício, 2023. "The determinants of internal audit quality," European Journal of Management and Business Economics, Emerald Group Publishing Limited, vol. 32(4), pages 417-435, April.
    3. repec:eme:maj000:maj-01-2018-1785 is not listed on IDEAS
    4. Rainer Lenz & Ulrich Hahn, 2015. "A synthesis of empirical internal audit effectiveness literature pointing to new research opportunities," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 30(1), pages 5-33, January.
    5. Rudy Usman & Abdul Rohman & Dwi Ratmono, 2023. "The relationship of internal auditors’ characteristics with external auditors’ reliance and its impact on audit efficiency: Empirical evidence from Indonesian government institutions," Cogent Business & Management, Taylor & Francis Journals, vol. 10(1), pages 2191781-219, December.
    6. Abdulkarim Hamdan J. Alhazmi & Sardar Islam & Maria Prokofieva, 2024. "The Impact of Changing External Auditors, Auditor Tenure, and Audit Firm Type on the Quality of Financial Reports on the Saudi Stock Exchange," JRFM, MDPI, vol. 17(9), pages 1-26, September.
    7. Lawrence J. Abbott & Susan Parker & Gary F. Peters, 2012. "Audit Fee Reductions from Internal Audit†Provided Assistance: The Incremental Impact of Internal Audit Characteristics," Contemporary Accounting Research, John Wiley & Sons, vol. 29(1), pages 94-118, March.
    8. Georgia Boskou & Efstathios Kirkos & Charalambos Spathis, 2019. "Classifying internal audit quality using textual analysis: the case of auditor selection," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 34(8), pages 924-950, May.
    9. Nofan Hamed Al-Olimat & Mohannad Obeid Al Shbail, 2021. "The Mediating Effect of External Audit Quality on the Relationship Between Corporate Governance and Creative Accounting," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(1), pages 149-157, January.
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