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8 Rev. Eur. Stud. 224 (2016)
Investigation Factors Affecting the Effectiveness of Internal Auditors in the Company: Case Study Iran

handle is hein.journals/rveurost8 and id is 506 raw text is: Review of European Studies; Vol. 8, No. 2; 2016 ISSN 1918-7173 E-ISSN 1918-7181 Published by Canadian Center of Science and Education Investigation Factors Affecting the Effectiveness of Internal Auditors in the Company: Case Study Iran Tabandeh Salehi1 Department of Accounting, Faculty of Management and Economics of Baft, Shahid Bahonar University of Kerman, Kerman, Iran Correspondence: Tabandeh Salehi, Department of Accounting, Faculty of Management and Economics of Baft, Shahid Bahonar University of Kerman, Kerman, Iran. E-mail: ta.salehi@uk.ac.ir Received: February 29, 2016 Accepted: May 3, 2016 Online Published: May 15, 2016 doi: 10.5539/res.v8n2p224 URL: http://dx.doi.org/10.5539/res.v8n2p224 Abstract There are relatively fewer number of studies focused on internal audit effectiveness, than the number of studies on the effectiveness of external audit. Our focus in this paper is mainly on determinants of internal audit effectiveness. For this purpose we developed and tested five hypotheses using an investigation approach. We gathered our data using a questionnaire, filled out by 355 internal audit manager and 272 other internal audit staff. Our multivariate regression model estimates the relationships between the effectiveness of internal audit department and its five main determinants: competency of internal audit staff, size of internal audit department, communications between internal auditors and external auditors, management's support for internal audit department, and independent (outsourced) internal audit. Our results show that internal audit effectiveness has stronger relationships with management's support for hiring and experienced educated staff, providing the internal audit department with sufficient resources, and the size of internal audit department. Keywords: efficiency, internal audit, management support 1. Introduction Internal audit provides assurance on organization's strategic procedures, risk management and control, and help organization in meeting its strategic, operational, financial, and regulatory objectives. Internal audit activities are performed in different legal and cultural environments, in organizations with different objectives, size, complexities and structures, and by different internal or external parties. Although these differences may affect internal audit methodology in every environment, as long as internal auditors are seeking to meet their responsibilities, they must apply International Standards for the Professional Practice of Internal Auditing. The traditional role of internal auditors was focused merely on financial estimations and monitoring internal controls. In recent years, however, the importance of internal audit has been significantly increased to consider a wider role of internal consultant for better risk management performance. In this respect, the important point is how internal audit department follows its determined objectives effectively. This paper, following a number of previous international studies (e.g., Ahmad et al., 2009; Mihret & Yiamaw, 2007; Dittenhofer, 2001) is focused on investigating and assessing internal audit effectiveness. In a study, Arrena and Azone (2009) found that the qualities of inner audit groups, audit systems and activities, and hierarchical connections can have effects of inside audit viability. Utilizing a meeting and survey methodology, Mirth and Yiisma (2007) recognized those authoritative attributes that can enhance or abatement inner audit adequacy. They found that the nature of inner auditors fundamentally influences inside audit adequacy. In any case, authoritative settings and audit properties demonstrated almost no effects. Likewise, past studies have used diverse measures for inward audit viability, including internal audit scores (Arwna & Azzone, 2009; Van Gansberght, 2005) or similarity with International Standards for the Professional Practice of Internal Auditing (ISPPIA) (Fadzil et al., 2005).

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